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SPECIAL PROJECTS CASE STUDY

Item Classification and Agreement Project

A steel company contacted PSC and requested four temporary buyers for a six-month period to do a major re-write of the stores items at one facility.  PSC suggested that the project be managed by the PSC in-house staff.

This project was intended to only bring purchase agreements up-to-date. However, after review and discussion, the actual project was expanded to include re-writing the item descriptions to allow both mill personnel and suppliers to better understand what was actually stocked, and re-expanded to include two more facilities.  Reclassifying the items allowed all the bearings (for instance) to sort together.  To resolve parts that could not be identified from the old descriptions, we went to look at the actual parts.  This resolved thousands of parts that were not purchasable as described.

Because the company did not simply have a supplier change descriptions to the suppliers format, the company "owned" these descriptions.  This meant they could be written for better internal use and competitive bidding.  It also removed any obligations to suppliers.  Because the descriptions were written by PSC, we avoided as many single source issues as possible.  In addition, hundreds of parts were moved from replacement parts to generic to allow major cost reductions and remove availability issues.

Having good descriptions meant suppliers knew the items could easily be purchased elsewhere and therefore remained competitive.

We developed custom software and interfaces to their computer system, staffed the project with existing and new personnel, and provided project management.  This allowed our customer's buyers to continue to focus on their day-to-day functions, while overseeing the conversion project work being done by PSC.