The customer

A global automotive parts company that develops, markets and sells premium products, from brake solutions and components to fuel and water pumps.

The challenge

After acquiring several new brands and rebranding the company, they set out to develop a strategy to understand and optimize the indirect materials spend of all the legacy companies they’d bought. They could see that there were:

  • Disparate systems
  • Poor data quality
  • Decentralized sourcing strategy

The company conducted an RFP to identify the right service provider that could help create a standard Source-to-Pay strategy across the United States and Mexico.  

Their objectives:

  • Get visibility into the spend across the nine brands with 29 individual sites. Although some of the legacy organizations had the ability to provide historical spend data, most did not. 
  • Find a provider that could consolidate the vendor base and standardize payment terms, ordering, invoicing and the reporting process to further support a standard approach for the newly formed company.  
  • Secure a provider that could effectively achieve cost savings through competitive sourcing events once the data had been cleansed. 

After a months-long evaluation period, DSSI was selected based on its ability to act as an agnostic extension of the client’s procurement, accounting and IT teams in a transparent approach to support a new standard in indirect materials and facility services procurement.  

An MSA was put in place that included:

  • One consistent management fee across all transactions
  • Standard payment terms across all transactions, based on country
  • Standard invoicing process
  • Item-level reporting in DSSI’s on-demand dashboards 
  • A dedicated team of buyers led by one of our experienced Purchasing Managers

How we solved it

Two decisions were made early on to allow for a fast launch and minimal change management for the sites as they were focusing on transitioning other functions of their business.

  1. The client and DSSI agreed to treat all transactions as “Directed Spend” for a period, meaning there were no changes to the supply base or items being purchased. This was done since there was very little historical spend data to analyze. The purchase orders would simply begin flowing through DSSI and then immediately out to the incumbent supplier, allowing DSSI to capture the details in the process to begin creating item master records based on manufacturer name and manufacturer part number.   
  2. DSSI would begin receiving POs in whatever manner the companies had historically transmitted them to alleviate the need to create several system interfaces. 

The long-term plan consisted of evolving this approach to become more strategic in both sourcing and purchasing process once item-level data visibility was achieved and a standard ERP system was selected by the client. 

DSSI recommended a launch path consisting of several phases.

Phase 1: Rapid transaction processing and purchase transparency

Phase 1 included DSSI setting up the client’s top suppliers in its own systems to facilitate rapid transaction processing once orders were placed. DSSI worked with each of the nine legacy companies to understand which vendors supported a large volume of orders or were not in line with the company’s standard payment terms of 90 days.  

A threshold of $50K of annual spend was used to help determine where to focus efforts. Vendors that facilitated an annual spend of less than this would be set up as needed. It was decided that this would be done in several waves based on the legacy company to take advantage of any vendor overlap they had.  

During this same time, our launch team began working to capture all critical information related to requisitioners, cost centers, invoicing requirements and logistics deals. This work would ensure that all purchases would not only ship quickly and be visible across the enterprise but would also be allocated properly based on established financial entities. 

Phase 2: Vendor onboarding, data capture and item record creation

Phase 2 included DSSI’s purchasing team initiating a mass-onboarding process of hundreds of vendors. If these vendors had the ability to provide data on what items FBG purchased from them, we captured that information as well. Item records were then created in Epic®, DSSI’s e-procurement tool, and included:

  • Manufacturer name 
  • Manufacturer part number
  • Supplier name
  • Supplier part number
  • Current price
  • UOM
  • Ships within timing

The client’s requisitioners would then refer to the Epic® catalog at the time of order to capture the current price, ship time and DSSI part number. If the vendor was not able to provide item-level data on historical company purchases, it was agreed that DSSI would capture that information at the time of re-ordered.

To fund the work DSSI was doing, the client and DSSI teamed up to approach all these vendors for discounted pricing. This was positioned with the vendor as a way of creating a more streamlined ordering and invoicing process with the client, which had historically been complex and time consuming for them. Many vendors understood the value provided by DSSI and agreed to at least some level of discount.

“Go Live” for the first wave of sites occurred within 10 weeks of an agreement being put in place. It was mutually agreed upon by both DSSI and the client that having 80% of the critical vendors onboarded would be the threshold for “Go Live” which then carried into the next waves. Dedicated DSSI buyers were assigned to one or more client sites based on their purchasing volume to ensure timely order processing and issue resolution.  

Over the course of five months and three waves, DSSI launched its purchasing services across 29 sites in the U.S. and Mexico, effectively becoming its purchasing arm for tail spend and some strategic categories.  

Key elements of the implementation included:

An Executive Sponsor on the client’s team.

  • Establishment of close working relationships between DSSI’s launch team and the client’s subject matter experts in AP, Finance, Purchasing, Taxation, Logistics and Operations to ensure seamless transaction processing.
  • Plant champions at each site who could help DSSI navigate replenishment, payment, and other internal processes.
  • Working closely with site requisitioners to educate them on their role in the improvements being made to data management and process optimization. 


Within the first year, DSSI had:

  • Achieved gross savings of 16% on managed spend where DSSI could make sourcing recommendations.
  • $1.27m in savings based on the client's own internal cost to manage suppliers. 
  • Set up 909 vendors and transacted with them on client’s behalf.
  • Consolidated vendor base.
  • Implemented standard payment terms across the 615 suppliers identified, based on country.
  • Implemented common order placement and invoice payment processes across a large portion of the spend.
  • Created on-demand dashboard reporting for tail spend at an item level utilizing manufacturer name and part number.
  • Given insightful sourcing recommendations using newly developed spend data and DSSI’s 20+ years in indirect materials sourcing.
  • Set up 30,000 item-level master data records, including manufacturer name and part number.
  • Processed 30,000 RFQs, POs and invoice lines on behalf of the client.