News

USA had another great year in 2019.  Thanks to our members and suppliers, savings for our members continues to be strong with the overall Return on Investment (ROI) being 33.96 with an average member benefit of $5.4M.

Focus on USA Supply Chain Programs

Members saved $34.8M, an increase of $3.4M over 2018, 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 to arrive at the most accurate numbers.

Savings Definitions

“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.

Material Cost Reduction (MCR) Project

The MCR project finished strong in 2019 with $13.4M in savings, an increase of $900,000 over 2018.  Total savings over the three year period were just shy of $30M.  MCR savings are included in the supply chain numbers above.  The project was closed at the end of 2019; however, the members have institutionalized the culture of seeking alternate low cost solutions to costly modifications and purchase of replacement parts for their plants.  Inventory optimization strategies, component repairs, and reverse engineering solutions are continuing to expand at the members plants and savings will still be included in the supply chain numbers going forward.

Questions or suggestions?  Contact Brad Vickery or Jim Kitchens for more information.