Case Study: Emerson Electric Inc. and Innovation - ' Contract Control '
(
Page 6 of 7 )
Contract Control
Problem: Emerson's accounting staff had no way to know whether suppliers were giving divisions the contracted rate for goods sold.
Solution: MIN helps accountants spot overpayments. Example: Emerson Motor Co. was overbilled $328,000 on $50 million in purchases.
Payoff: No more overpayments and an estimated $3.5 million in companywide cost savings per year.
Inventory Reduction
Problem: In-Sink-Erator, a maker of garbage disposals, was buying some items at premium prices from local distributors and storing them indefinitely.
Solution: MIN identified the source of bloated inventories.
Payoff: All divisions now buy from lower-cost suppliers using just-in-time systems for inventory savings in the millions.
Pricing Power
Problem: Three of 18 factories run by Emerson's Fisher Valves division were buying the same 12-foot stainless steel tubing from two suppliers at three different prices.
Solution: MIN spotted the problem and the three factories pooled their purchases.
Payoff: Lower prices for raw materials—in this case, savings to the company of $45,000 on one order.
test
/ 4 
Case Studies 
