In the backdrop of a tumultuous US healthcare industry, the medical devices sector in the US is raging towards a double-digit consumer spend mark. Such a rapid increase in the spend is paving the way for the advent and sustenance of markets such as the US metal enclosures market, which is now making its mark in the business landscape in the US. Currently, the US metal enclosures market is set to achieve a spend growth rate of more than 4%. However, a key question that comes to mind is whether this spend growth rate translates into a favorable procurement scenario for buyers looking to procure such products? Inferences drawn from SpendEdge’s recent US metal enclosures spend analysis clearly says NO!
# US Metal Enclosures Spend Analysis Insights 1
Buyers in the US metal enclosures market are one of the casualties of the ongoing US-China trade war. This statement is reinstated by the fact that the severe supply crunch of steel owing to the increase in tariffs that are imposed on Chinese steel/iron ore imports will have an inflationary impact on the supplier’s production cost of metal enclosures. The US metal enclosures spend analysis hints at an incremental procurement cost incurred by buyers as suppliers are compensating for their recurring production expenditure by increasing the price of the product.
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# US Metal Enclosures Spend Analysis Insights 2
Lack of spend visibility, owing to an uncategorized supply base, is a perennial source of procurement challenge for companies operating in the US metal enclosures market. A majority of buyers are failing to maintain proper co-ordination with the regional supplier base as well as with suppliers from LCCs. A lion’s share of the increasing procurement spend, as predicted by the US metal enclosures spend analysis, can be attributed to this factor.
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How to Achieve Spend Management Goals in the US Metal Enclosures Market?
Strategy 1: Strategic selection of suppliers will play a prominent role in helping buyers optimize their recurring procurement spend. It is also recommended that buyers partner with distributors who procure metal enclosures sourced from suppliers based in LCCs in APAC, such as South Korea and India. Distributors offer customization services by engaging manufacturers that are located in low-cost manufacturing countries. This allows buyers to reduce their overall procurement expenditure in the US metal enclosures market. However, buyers must ensure that the goods availability and shipment time align with their delivery requirements.
Strategy 2: By leveraging centralized supplier management systems, buyers can attain better communication among their supplier segments. In the long term, it fosters better spend visibility, enabling the buyers to identify areas to optimize their recurring spend in the US metal enclosures market. The adoption of supplier integration technologies will further help buyers to achieve significant cost savings associated with the management of inventories.