Caterpillar dealership gets nimble and quick in the purchasing department with Spend Management software - and saves nearly $2 million in the first year.

Charlotte, NC(April 20, 2004) - Whayne Supply, a 16-location, 1,000-employee Caterpillar dealership based in Louisville, KY, has implemented ProcureIT from Verian Technologies to manage its purchasing processes.  Whayne sells, rents and services Caterpillar and other brands of heavy equipment throughout Kentucky and parts of Indiana.

ProcureIT is a Web-based Spend Management software solution.  The system enables Whayne to negotiate better contracts with suppliers, recover lost revenue and decrease the time and labor involved in making purchases of parts used to service Caterpillar equipment. Whayne will save a projected $2 million in the first year of using ProcureIT, according to the company's Purchasing Director Les Long.

"We knew procurement software would help us overcome some of our challenges.  It was just a matter of figuring out which product was right for us," said Long.  "We selected ProcureIT for a number of reasons. First was Verian's experience working with Cat dealers. I was also impressed with the knowledgeable and personal service we received from Verian. They have great people who were able to implement our software fast. ProcureIT was also very affordable, considering the tremendous cost savings it helps us achieve."

Before ProcureIT, Whayne's management did not fully understand the significance of capturing and controlling all company expenditures. According to Long, ProcureIT has shown the executive team the importance of supply management, the need to have the rights tools in place to see total company spend, and the value of having trained people to understand and interpret spend data. Another significant area of ProcureIT's impact surfaced during a recent Six Sigma evaluation. Whayne's Six Sigma team is considering placing a separate buyer at each location, with the cost of creating the new positions being justified by the savings that ProcureIT has provided.

Improved contract negotiation and compliance
Long was able to conduct spend analyses using data from ProcureIT to learn more about the dealership's purchasing activities and use the data in contract negotiations. With one vendor, Long was able to negotiate discounts ranging from five to 15 percent, depending on items and volume purchased.  That same vendor also agreed to drop all shipping charges because the electronic purchase orders Whayne sends via ProcureIT let them operate more efficiently.

In addition, Whayne took advantage of the product catalog included in ProcureIT to eliminate off-contract buying.  "Before we implemented ProcureIT, at least 35 percent of our purchases were with non-contracted vendors," said Long.  "That cost us about $500,000 more than what we would have paid if we were using the vendors we had contacts with."  Long said that in their new process, all purchases must originate in ProcureIT, which automatically selects contracted vendors from a pre-set catalog to enforce contract compliance.

Recovery of lost revenue
Whayne had a hole in its procurement process that resulted in the dealership not recovering the full cost of parts and services - as well as the critical markup. "In our old system, there was nothing in place to prevent our customers from being billed before we knew the full cost of the parts and services used for service work," said Long.  An average of $40,000 per location in lost revenue fell through this hole - totaling $640,000 each year.  Working with Verian Technologies' professional services team, Long was able to plug the hole by creating a link from ProcureIT directly to Whayne's work order software.  This integration prevented bills from being sent to customers before their own costs for parts and services were completely entered into the system.

Process improvements
ProcureIT enabled Whayne's staff to reduce the time they spent on routine, manual tasks during the purchasing process.  Long documented that, beforeProcureIT, the 15 major steps to issue a purchase order, receive the items and pay the invoice took more than two hours and cost the dealership $83.25 on average in staff time.  Whayne creates about 50,000 purchase orders each year, thus costing $4,162,200 in staff time annually. Long said thatProcureIT enabled Whayne to reduce their process to 8 steps and less than 15 minutes. The average cost of issuing, receiving and paying is now $12.60, totaling $630,000 annually - savings of $3,532,200.

"We've worked hard over the years to develop a solution that eliminates procurement pains within heavy equipment dealerships," said Verian's President and CEO Tehseen Ali.  "With Whayne Supply joining the Verian family of customers and the recent evaluation from the Six Sigma team, we've received further validation that our efforts are on the mark."

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Anna Rushing, PR Coordinator

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About Verian Technologies
Verian Technologies provides 100% web-based Spend Management solutions to mid-sized and large organizations.  Its technology is based on its suite of solutions called ProcureIT.  ProcureIT encompasses all aspects of spend management including: procurement, materials management, asset management, and travel & expense reimbursement.  ProcureIT enables organizations to reduce their organizational spend, automate manual tasks and reduce on-hand materials and commitments.  As a result, Verian Technologies' clients are able to reach efficiency faster and realize a strategic competitive advantage, as well as a rapid return-on-investment.  For more information on Verian Technologies, visit http://www.verian.com.