Overview of the Automobile Engineering Industry
The growth of the global automobile engineering space can be attributed to factors such as easy finance options, declining interest rates, and robust government incentives to promote the car culture.
Over the past few years, the global automobile engineering industry has been witnessing drastic changes due to the increasing environmental concerns and the rise of new players, amid global economic uncertainty. As a result, firms within the automobile engineering industry are investing highly in R&D to introduce emission reduction technology and self-driving vehicles into the existing architecture. Renowned automobile engineering companies are also planning to re-define their production lines to stay competitive.
Furthermore, some of the factors influencing the growth of the industry include:
- Stringent regulations: The automobile industry is witnessing an increase in regulations with respect to safety and environmental standards. As a result, leading automobile engineering companies are facing challenges to develop alternative power-train technologies for lower-emission vehicles.
- Digital demands: With the radical shift toward digitization, digital channels have become the primary information source for the customers of the automobile engineering space. Also, the rise of online purchasing is paving the way for relentless competition from online retailers; which makes it necessary for businesses to revamp their existing product portfolios.
The Business Challenge and Journey
The client, a leading player in the automobile engineering space, had no standardized sourcing process. The client was also facing declining pipeline issues of new products and increasing costs across their business units. Additionally, their procurement team was not involved in many areas of spend and seen as “order raisers” or contract administrators. As a result, the client wanted to transform their procurement activities into a strategic unit.
To help the client overcome their predicaments, the category management experts at SpendEdge tailored a wide-ranging research methodology. The research approach included primary and secondary research coupled with qualitative and quantitative data collection methods.
During the course of this category management engagement, the automobile engineering client was able to design a new category management process and toolkit for their procurement activities. Additionally, the client developed a quick win program set up to generate higher savings.
Key questions answered in this category management engagement
The category management engagement helped the client build better stakeholder relationships in the business. This helped them achieve savings of $6 million over a 12-month period.