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honeywell.pngThe strategic sourcing efforts have allowed the NNSA to leverage its purchasing power across all of its sites.




SCMC – Supply Chain Management Center procurement initiative helps save taxpayers $213 million

In 2006, the National Nuclear Security Administration (NNSA) launched a project that it called the Supply Chain Management Center. The center was focused on transforming procurement and sourcing processes at the agency’s seven Nuclear Security Enterprise sites, with the goal of maximizing the value of each taxpayer dollar spent. To carry out the task, the NNSA hired Honeywell International’s Federal Manufacturing & Technologies unit, which also contracts with the agency to engineer and manufacture nonnuclear components for the nation’s weapons stockpile.

Honeywell needed to transform the Nuclear Security Enterprise facilities’ acquisition process from a tactical to a strategic process. Previously, each site did its own procurement, and there was little collaboration. The strategy was to implement procurement platforms using best practices such as spend analysis, eSourcing, eProject, eStore, and strategic sourcing. These would allow the NNSA to gain pricing and process efficiencies.

The new system would allow collaboration among the NSE contractor sites. The SCMC project developed a secure Internet portal, based on Oracle software, for common access to all sites. The project also included a spend analytics tool that breaks down spend data and commodity opportunities across all sites.

The eSourcing portion of the project set up the capability for the agency to conduct reverse auctions. These auctions have saved the NNSA an average of 9.5% per event, and there have been more than 1,900 eSourcing events valued at $2 billion. Total savings have amounted to $180 million across the NSE sites.

The eStore marketplace allows employees to scan through standard catalogs and make purchases without the intervention of procurement professionals. In 2010, eStore transactions increased by more than 600%. There are now 15 catalogs in the NNSA eStore.

And the strategic sourcing efforts have allowed the NNSA to leverage its purchasing power across all of it sites. So far, the agency has awarded fi ve strategic sourcing agreements with total savings calculated at $27.8 million.

Overall, SCMC has saved the NNSA—and taxpayers—$213 million. Savings in 2010 alone were $109 million.