USA Supply Chain (SCM) programs enjoyed a banner year in 2018! Members saved $31.4M, an increase of $3.7M over 2017, all due to the hard work and collaborative spirit of everyone involved. . Submitted by our Supplier-Partners, all savings are checked and approved by both the applicable USA member plant and USA supply chain staff before being counted. The review includes an iterative process through which questions can be asked and numbers challenged prior to approval in order to arrive at the most accurate numbers.
We track three different categories of supply chain savings:
“First-Cost”– Pertaining to the price charged for the goods or services purchased and the difference a member pays under the USA Agreement and what they would pay from the same supplier if they were not a member of USA;
“Rebates” – Closely related to First-Cost savings, Rebates are volume incentives earned as members use the Agreements. Incentive percentages increase as aggregated member spend increases during the course of the year;
“TCO” (Total Cost of Ownership) – Supplier furnished value that reduces the total cost of using a product or performing a service. For example, a new software program may result in reduced dose, which can be translated into ALARA savings. Other categories include such things as Innovative/Strategic Sourcing, Critical Path Time Savings, Energy Savings, Inventory Reduction, Manpower Reduction, Waste Reduction and Transportation Savings. TCO will typically dwarf simple price-based savings and is the reason USA SCM focuses on trust-based, mutually beneficial relationships with top industry suppliers having a reputation for innovation and a focus on delivering maximum value to their customers.
In addition to the primary SCM Team consisting of lead individuals from each member site, SCM Teams representing Portfolio Management, Procurement Engineering, Supplier Relationship Management and the Material Cost Reduction (MCR) initiative all worked together with committed member staff and our outstanding supplier-partners to make this exceptional team achievement possible. We appreciate the willingness of everyone in the “chain” to step up to the challenge of “Delivering the Nuclear Promise” and we look forward to the promise of 2019.