IBM > Case Studies > FMC Corporation accelerates multi-million dollar savings with SAP and IBM

FMC Corporation accelerates multi-million dollar savings with SAP and IBM

Customer Company Size

Large Corporate

Region

America
Asia
Europe

Country

United States

Product

SAP Supplier Relationship Management
SAP Spend Performance Management
SAP SRM-MDM Catalog
Ariba Contract Management
Ariba eSourcing

Tech Stack

SAP ERP
SAP ERP Human Capital Management

Implementation Scale

Enterprise-wide Deployment

Impact Metrics

Cost Savings
Productivity Improvements

Technology Category

Application Infrastructure & Middleware - Data Exchange & Integration
Functional Applications - Enterprise Resource Planning Systems (ERP)

Applicable Industries

Chemicals

Applicable Functions

Procurement

Use Cases

Supply Chain Visibility
Demand Planning & Forecasting

Services

System Integration
Software Design & Engineering Services

About The Customer

FMC Corporation is a specialty chemicals manufacturing company headquartered in Philadelphia, Pennsylvania. The company operates its businesses in three segments: FMC Agricultural Solutions, FMC Health and Nutrition, and FMC Minerals. FMC serves customers through a network of business units within each of its geographic regions. This approach has served the company well for marketing, sales and product development, combining global scale with local knowledge and flexibility. However, the business model also led to decentralized processes around indirect procurement – the sourcing of goods and services for use by internal stakeholders – which dulled visibility and operational efficiency.

The Challenge

FMC Corporation, a specialty chemicals manufacturing company, was facing challenges with its indirect procurement processes. The company's decentralized approach to procurement across its global business units made it difficult to manage and control how employees purchased goods and services. This lack of visibility and operational efficiency prevented FMC from leveraging its global scale to negotiate better deals with suppliers, and made it difficult for the company to understand and manage total procurement spend effectively. The company needed a solution that would allow it to take control over global sourcing and spending, and manage global procurement more efficiently through standardized, automated processes.

The Solution

FMC worked with IBM Global Business Services to implement a standardized source-to-pay process, built on SAP solutions, unifying the way employees in various locations procure supplies and services. The company created a center-led organization that would act as a hub for global sourcing and procurement. With the new organization in place, attention turned to introducing a standardized, scalable platform for managing the entire source-to-pay process, through the eProcure project. The new platform would allow FMC to manage global procurement more efficiently through standardized, automated processes. Additionally, the solution would drive greater spend visibility by offering a single picture of actual purchasing behavior, prices and suppliers across all FMC business units and regions. FMC took a phased approach to the implementation, working with IBM Global Business Services and other partners to roll out the source-to-pay system on a region-by-region basis.

Operational Impact

FMC gained a clear view of procurement processes that makes it easier to manage spending and drive smart sourcing strategies.
The company was able to standardize its procurement processes, moving from disparate procurement approaches to a single, standardized source-to-pay process.
Staff all over the world can now purchase supplies and services through a common, web-based catalog, driving greater visibility and control over global procurement.
The implementation of SAP Supplier Relationship Management and Master Data Governance gave FMC the opportunity to revisit this lack of harmonization and standardize.

Quantitative Benefit

FMC achieved savings of USD150 million.
Increased purchase order transactions by 80 percent without increasing number of FTE’s as procurement is able to work across sites globally.
Increased light touch and automated transactions by 30 percent through standardized catalogs and/or system contracts.