Executive Summary

Advanced Manufacturing Solutions (AMS), a mid-sized precision manufacturing company specializing in automotive and aerospace components, faced significant challenges with their fragmented procurement processes. By implementing an end-to-end procurement platform, AMS achieved a 32% reduction in procurement costs, 40% faster production cycles, and strengthened relationships with strategic suppliers within 14 months, while maintaining their strict quality standards.

Company Background

Company: Advanced Manufacturing Solutions
Industry: Precision Manufacturing (Automotive and Aerospace)
Size: 850 employees
Annual Revenue: $120 million
Operations: 3 manufacturing facilities in the Midwest and 1 in Mexico

Pre-Implementation Challenges

Before implementing a specialized procurement solution, AMS struggled with numerous operational challenges:

1. Material Shortages: Frequent production delays due to just-in-time inventory failures and poor forecasting capabilities
2. Quality Control Issues: Inconsistent supplier quality leading to higher rejection rates and rework
3. Siloed Procurement: Each facility managed its own procurement with minimal coordination, resulting in missed volume discount opportunities
4. Manual Processes: Heavy reliance on spreadsheets, emails, and phone calls for ordering, with no centralized system of record
5. Limited Supplier Visibility: No comprehensive view of supplier performance across quality, delivery, and cost metrics
6. Cost Overruns: Uncontrolled spot purchases and emergency orders increasing material costs by approximately 18%
7. Compliance Challenges: Difficulty maintaining documentation for industry certifications and customer quality requirements

Solution Selection Process

AMS formed a cross-functional team including procurement, operations, quality control, and IT to evaluate procurement solutions. After a six-month evaluation process, they selected S2C software based on:

• Manufacturing-specific capabilities addressing unique industry requirements
• Strong integration capabilities with their existing ERP and MES systems
• Advanced quality management features
• Scalable platform that could grow with their business
• Superior ROI projections compared to competitors

Implementation Strategy

AMS adopted a methodical, phased implementation approach:

Phase 1: Foundation (Months 1-3)

• Established implementation governance structure
• Mapped current vs. future-state procurement processes
• Developed data migration strategy for supplier and material master data
• Configured core procurement workflows and approval hierarchies
• Integrated with ERP system for financial data synchronization

Phase 2: Core Capabilities Deployment (Months 4-6)

• Implemented requisition-to-pay workflow
• Deployed supplier portal for key vendors
• Established catalog management for regularly purchased items
• Created role-based dashboards for various stakeholder groups
• Conducted initial training for procurement team and power users

Phase 3: Advanced Features & Expansion (Months 7-10)

• Activated quality management module with supplier scorecards
• Implemented contract management functionality
• Deployed inventory optimization tools
• Extended platform to all manufacturing facilities
• Conducted comprehensive training program for all users

Phase 4: Optimization & Strategic Procurement (Months 11-14)

• Implemented strategic sourcing capabilities
• Developed automated spend analytics reporting
• Activated advanced forecasting and demand planning features
• Established center of excellence for continuous improvement
• Onboarded tier 2 and tier 3 suppliers to the platform

Key Features Implemented

The S2C tool implementation at AMS leveraged several critical capabilities:

1. Material Requirements Planning Integration: Direct connection to production schedules to enable proactive procurement
2. Quality Management System: Supplier certification tracking, quality metrics, and non-conformance management
3. Supply Chain Visibility: End-to-end tracking from order placement to delivery
4. Strategic Sourcing Tools: RFQ management, bid comparison, and supplier negotiation workflows
5. Inventory Optimization: AI-powered inventory level recommendations based on production forecasts
6. Supplier Collaboration Portal: Real-time communication, document sharing, and performance tracking
7. Contract Lifecycle Management: Automated contract creation, milestone tracking, and renewal management
8. Spend Analytics: Advanced reporting on spending patterns by category, supplier, project, and facility
9. Mobile Capabilities: Approval workflows, receiving, and inventory checks via mobile devices

Results and Impact

After 11 months, AMS realized substantial measurable improvements:

Financial Outcomes

• 32% reduction in total procurement costs
• 22% decrease in average unit costs through strategic sourcing
• 45% reduction in emergency orders and rush fees
• $3.2 million in identified annual savings

Operational Improvements

• 40% reduction in production cycle times
• 68% decrease in material shortages
• 30% improvement in supplier delivery performance
• 52% reduction in procurement processing time
• 35% decrease in quality incidents related to purchased materials

Strategic Benefits

• Consolidated supplier base from 412 to 287 vendors
• Increased spend under management from 62% to 94%
• Improved working capital through 28% reduction in inventory levels
• Enhanced compliance documentation for aerospace certifications
• Strengthened strategic supplier relationships through data-sharing and collaboration

Challenge Mitigation

Several challenges emerged during implementation and were successfully addressed:

1. Data Quality Issues: Extensive data cleansing was required prior to migration. Solution: Dedicated data team established to standardize and validate supplier and material data.
2. Integration Complexity: Initial integration with legacy MES system proved difficult. Solution: Custom API development and phased integration approach.
3. User Adoption: Resistance from long-term employees accustomed to manual processes. Solution: Identified departmental champions, provided extensive training, and demonstrated early wins.
4. Supplier Onboarding: Initial reluctance from some suppliers to use the new portal. Solution: Created supplier incentive program and provided dedicated onboarding support.
5. Process Standardization: Significant differences in procurement practices between facilities. Solution: Created standardized process templates with limited customization options.

ROI Analysis

The implementation and first-year subscription costs totaled $1.2 million. Based on documented savings and efficiency gains, AMS achieved:

• Payback period: 4.5 months
• First-year ROI: 267%
• Five-year projected ROI: 412%
• Annual recurring benefits: $3.8 million

Lessons Learned

The implementation revealed several valuable insights:

1. Executive Sponsorship is Essential: Active C-suite involvement was critical for driving organizational change.
2. Process Before Technology: Taking time to optimize processes before implementing software produced better results than automating inefficient processes.
3. Measured Approach to Change: The phased rollout allowed teams to adapt gradually rather than facing overwhelming change.
4. Supplier Engagement: Early involvement of key suppliers in the implementation process improved adoption rates.
5. Continuous Training: Ongoing training and support were necessary as the organization discovered new use cases and capabilities.

Future Roadmap

Building on their successful implementation, AMS has developed a procurement technology roadmap:

1. AI-Powered Procurement: Implementing machine learning for predictive analytics and autonomous purchasing of routine items
2. Sustainability Metrics: Adding environmental impact assessment to supplier evaluation criteria
3. Blockchain for Traceability: Exploring blockchain technology for critical aerospace components
4. Extended Supply Network: Expanding visibility beyond tier 1 suppliers
5. Advanced Risk Management: Implementing predictive risk monitoring for supply chain disruptions

Conclusion

The S2C tool implementation transformed procurement at Advanced Manufacturing Solutions from a tactical, reactive function to a strategic differentiator. By digitalizing and centralizing procurement, AMS not only reduced costs but also improved product quality, accelerated production cycles, and strengthened supplier relationships.

For manufacturing companies facing similar challenges, this case study demonstrates how modern procurement technology can directly impact bottom-line results while improving operational performance. The key to success lies in a strategic implementation approach, strong change management, and a focus on continuous improvement.

“S2C software has fundamentally changed how we approach procurement. What was once a bottleneck in our production process is now a competitive advantage. The visibility and control we’ve gained allow us to make faster, better-informed decisions that directly impact our bottom line.”
— Jennifer Martinez, Chief Operations Officer, Advanced Manufacturing Solutions