Case Studies

See how DXP’s SmartSource program has helped other customers achieve a productive and measurable solution, reduce costs and streamline procurement.

Manufacturing Industry: Customer saves $1,400,000 first year

• Customer: Large manufacturer with multiple warehouses and
  sub-stocks
• Approximate annual MRO purchase of $5 million.
• Problem: Excess costs and inefficiencies in inventory management and procurement.
• Solution: Customer contracts with DXP to provide on-site inventory management and procurement services. DXP personnel operate and manage the warehouse and supply chain by using advanced bar code technology.
• SmartSource^SM services provided: inventory management, procurement services, replenishment services, consolidated billing and summary reporting.
• Summary of SmartSource^SM Savings – 27% Total Annual Savings

  Reduced Personnel Costs – 11%
  Reduced Administrative Expenses – 3%
  Reduced Shrinkage & Obsolescence – 2%
  Reduced COGS – 3%
  Inventory – 8%

Manufacturing Industry: Customer saves $375,000 first year

• Customer: Large turbine manufacturing facility located in Houston, Texas.
• Approximate annual MRO purchase in excess of $1,500,000.
• Problem: Poor service levels from multiple vendors with no activity based costing and 18 sub-stock locations throughout the plant.
• Solution: Facility contracts with DXP to manage all storeroom procurement and warehouse functions. DXP utilizes its own Prophet21 CommerceCenter distribution software to manage the entire supply chain.
• SmartSource^SM services provided: inventory management, procurement services, replenishment services, and increased technology (PCs, radio frequency and hand-held bar code scanners).
• Summary of SmartSource^SM Savings – 25% Total Annual Savings

  Reduced Inventory Investment – 10%
  Reduced Personnel Costs – 7%
  Reduced Administrative Expense – 5%
  Reduced Product Costs – 3%

Blending Industry: Customer saves $600,000 the first year

• Customer: Large blending plant located in southwestern United States.
• Annual purchases exceed $2 million.
• Problem: Excess costs and inefficiencies throughout supply chain.
• Solution: Long-term agreement established with DXP to provide continuous improvement in cost effectiveness, quality of product and services to help increase production while lowering total cost of ownership.
• SmartSource^SM services provided: vendor consolidation, product standardization, stocking programs, bar code technology, custom reporting, and administrative shoe program.
• Summary of SmartSource^SM Savings – 30% Total Annual Savings

  Reduced Personnel Costs – 13%
  Reduced Product Costs – 7%
  Reduced Administrative Expense – 5%
  Reduced Inventory Investment – 5%

Oil & Gas Industry: Customer saves $288,000 first year

• Customer: Large manufacturing operation with annual MRO spend of $1.2 million.
• Problem: Customer decides to outsource inventory management and procurement because of growth and realization that supply chain management is not his core-competency.
• SmartSource^SM services provided: On-site inventory management, procurement, activity-based job costing, replenishment services, vendor consolidation and product standardization.
• Summary of SmartSource^SM Savings – 24% Total Annual Savings

  Reduced Inventory Investment – 10%
  Reduced Personnel Costs – 10%
  Reduced Administrative Expense – 4%