Title: Category Profile SPDPS002b Spend Analysis Template
1Category Profile (SPD-PS002b) Spend Analysis
Template
Issue Date 10/1/06
SPD-PS002b
2- Spend analysis
- Overall Opportunities
- Subcategory Opportunities
3Georgia Spend Cube Data
Example
Sources of Spend Cube Data
AP P-Card Data - 106 MM
PO Data - 19 MM
- No line item detail
- Contains the aggregate spend for a transaction
with an Agency/Vendor - Data sources include AP without PO visibility,
P-Card, GSFIC - 52,412,947 of the spend falls under No Agency
Listed - 104,098,316 of the spend fall under NO NIGP
code
- Contains Line Item Detail
- Item Description, Quantity, Unit Price, Buyer
Name/ID - Contains PO Type Description
- Open Market, Statewide Contract Release, Agency
Contract and Releases, Construction-PW-A and E,
Sole Source-Per GPM, Exempt-Per OCGA 50-5-58,
Sole Brand-Per GPM, Mandatory-CS, GCI, GEPS, GIB,
Intergovernmental Agreement
Combination of various sources indicates 125 MM
in unadjusted MRO spend
Source APP-Card data PO Data from State of
Georgia, 2005
4Spend by Entity
Example
- 106 entities are represented in data.
- University of Georgia, Georgia State, Georgia
Tech and the Medical College of Georgia are not
included in the spend current spend cube. - GSFIC represents 52 Million in spend cube and
has no identifiable entities.
Source SAO and Regents A/P and PO extracts, BoA
P-Card extracts, and SAO General Ledger for FY05
5Example
Georgia MRO Spend Data
20 Vendors account for 64 percent of MRO Spend
(1)
Notes (1) 20 vendors account for 54,797,460 of
85,916,611 of the total MRO spend -
64 Source SAO and Regents A/P and PO extracts,
BoA P-Card extracts, and SAO General Ledger for
FY05
6Example
MRO Spend Currently Sub Categorized
Top 15 MRO Sub-Categories(1) by Spend and Number
of Vendors (Spend in MMs)
- All sub categorized spend represents 63 Million
of the 85 Million is MRO spend - Industrial Gases is composed of a single vendor,
Linde Gas. Linde Gas current contract was
estimated at 53,000 (2) - 16 Million in Pipes, Valves and Fittings is 1
transaction with no detail to American Piping
Supply - Molded Plastic Parts does not contain
information regarding the agency, regent or item
(s) that were purchased - Industrial Supplies via distributor is largely
Grainger spend via the Western States Contract
Alliance - Major Retail spend is Home Depot, Lowes, Ace
Hardware, Wal-Mart, Target, etc. - Light Bulbs are currently under contract.
However, Bulb Direct, a non-contracted vendor,
has the most spend - The average spend per supplier of the top 15
categories is 105,141
Notes (1) 15 categories (408 vendors) in chart
account for 59,451,531 of 62,769,098 of the
total sub categorized spend (2) Monthly vendor
reporting to DOAS Source SAO and Regents A/P
and PO extracts, BoA P-Card extracts, and SAO
General Ledger for FY05
7Example
Miscellaneous MRO Spend
- 23 MM of the 85 MM is miscellaneous, local
(supplier) and rogue spend in industrial supplies - The average spend of the 3,184 suppliers is
7,270 - 21,761 of 27,621 items are without line item
detail - Likely that a majority of items could be
purchased on Grainger WSCA contract if mandated
(Grainger offers over 500,000 items via Western
States Contract Alliance) - Next steps are to continue sifting through
detailed portion of the data to subcategorize the
spend however, it is unlikely that any major
nuggets of spend or new categories will be found
Source SAO and Regents A/P and PO extracts, BoA
P-Card extracts, and SAO General Ledger for FY05
8Current State-Wide MRO Contracts
Example
Total spend on state-wide contracts
- 10,320,262 is not a significant amount of total
MRO spend, but presents a large opportunity for
contract compliance and the development of new
contracts - Linde Gas spend reports are grossly less than
the spend cube - 52,589 versus 17,007,312 in
spend cube - Seven of the nine contracts are expiring in next
six months - In the short term, A.T. Kearney recommended
extending the Liners, Paint and Dishwashing
Compounds - Other contracts will be evaluated for sourcing,
consolidation, renewal and extensions
Source Contract and spend information is from
vendor reporting to DOAS
9- Spend analysis
- Overall Opportunities
- Subcategory Opportunities
10There are a number of potential ways in which
additional value may be created for Georgia in
the MRO category
Example
- Key Questions Total Cost of Ownership can be
Reduced by...
Increase Leverage
- Creating contracts for large sub-categories
currently not available on contract - Re-biding long standing contracts and contracts
approaching expiration - Using contract mandate and volume to re-negotiate
deal with Grainger
Increase use of Existing Contracts
- Redirecting large amounts of spend from the open
market to current agreements when available
Practice Standardization
- Encouraging the use of P-Cards for purchasing MRO
items - Providing MRO buying guide with contract coverage
and supplier contacts
Consolidation
- Reducing 3,900, or 90 of vendors, by putting
contracts in place and mandating them
Specification Standardization
- Standardizing specifications and reducing the
number of SKUs/ suppliers of commodity items
Source A.T. Kearney Analysis
11- Spend analysis
- Overall Opportunities
- Subcategory Opportunities
12Sub Category Industrial Gases
Example
13Sub Category Pipes, Valves and Fittings
Example