Cooper Industries Creates Strategic Sourcing Structure
12 October 1999
Cooper Industries Creates Strategic Sourcing Structure
HOUSTON, Oct. 12 -- Cooper Industries, Inc. today
announced that it has created a consolidated corporate Strategic Sourcing
structure to direct worldwide supply chain activities among all of its
businesses. Currently, Cooper owns and operates more than 90 manufacturing
facilities around the world producing thousands of recognized brand-name
electrical products and power and hand tools. Through the use of state-of-
the-art technology and centralized administration, the Company expects this
new Strategic Sourcing initiative will effectively leverage worldwide
purchasing activities, streamline procurement procedures and significantly
reduce materials management costs.
Terry A. Klebe has been named senior vice president, Strategic Sourcing
for Cooper and will be responsible for all activities related to the new
Strategic Sourcing initiative, reporting directly to H. John Riley, Jr.,
chairman, president and chief executive officer, Cooper Industries. Most
recently, Klebe served as vice president and controller of Cooper. Prior to
joining Cooper in 1995, Klebe was a partner in the Houston office of Ernst &
Young LLP, with extensive financial audit and consulting experience in the
manufacturing and energy industries.
"The U.S. manufacturing industry is under tremendous pressure to enhance
operational performance," said Riley. "Cooper's Strategic Sourcing initiative
will position us to leverage our considerable worldwide resources relative to
our total supply chain structure. We anticipate that these activities will
reap significant cost savings and will create a powerful cultural shift in all
of our materials management processes.
"We earlier identified supply chain management as a critical component to
enhance profitability and strengthen cash flow," continued Riley.
"Traditionally, Cooper's supply chain activities have been decentralized,
managed independently within each of our businesses. Over time, as a result
of efforts within our businesses, we have considerably reduced the costs of
goods and services. Through the use of new technologies and systems, however,
our new Strategic Sourcing structure will bring these initiatives to
unprecedented levels. In fact, we believe that our new Strategic Sourcing
structure will provide Cooper with ongoing opportunities to improve all of our
related business processes."
As part of this Strategic Sourcing initiative, Cooper has contracted with
Aspect Development, Inc. of Mountain View, Calif., to provide
inbound supply chain management solutions to facilitate Cooper's Strategic
Sourcing initiatives. Aspect is a leader in e-Business solutions for Inbound
Supply Chain Management, providing strategic decision support for procurement
activities to companies in all industries.
Aspect Development was retained to review Cooper's current procurement
practices, with the specific intention of identifying and quantifying
opportunities to reduce material costs across Cooper's global business
enterprise. The review identified several actions, including the development
of a focused supplier program that will incrementally reduce costs beginning
next year. Within three years, Cooper's Strategic Sourcing initiative is
conservatively expected to achieve pre-tax savings of at least $50 million
annually.
Cooper Industries, with 1998 revenues of $3.7 billion, is a worldwide
manufacturer of electrical products, tools and hardware. Additional
information about Cooper is available on the Company's Internet site:
http://www.cooperindustries.com.
Statements in this news release are forward-looking under the Private
Securities Litigation Reform Act of 1995. These statements are subject to
various risks and uncertainties, many of which are outside the control of the
Company, such as the level of market demand for the Company's products,
competitive pressures and future economic conditions. These factors are
discussed in the Company's 1998 Annual Report on Form 10-K.
Contact: John Breed of Cooper Industries, Inc., 713-209-8835.