CASE STUDY

Cost Model Analysis: How SpendEdge Helped a Prominent Automobile Engineering Client Achieve Substantial Savings

Feb 14, 2018

Overview of the Automotive Industry

Amid the economic crisis, the automotive industry is witnessing a constant change owing to the increasing environmental concerns and the rise of new players. The industry is investing highly in R&D to introduce emission reduction technology and autonomous vehicles into the existing service architecture. Moreover, leading automobile engineering players are planning to re-define their production lines to stay competitive and achieve higher pricing power. The growth of the automotive space can be attributed to factors such as declining interest rates, easy finance options, and robust government incentives to promote the car culture. In addition, factors influencing the growth of the industry include:

  1. The presence of stringent regulations: The automotive industry is witnessing an increase in regulations with respect to environmental and safety standards. Prominent automobile engineering players are facing challenges to develop alternative powertrain technologies for lower-emission vehicles. Hence, it becomes essential for automobile engineering players to invest highly in research and development to improve their ROI.
  2. Digital demands: Today, with the radical shift toward digitization, digital channels have become the primary information source for the customers. Also, the rise of online purchasing is paving the way for relentless competition from online retailers; which makes it essential for businesses to revamp their existing product portfolios.request free proposal

The Business Challenge and Our Journey

The client, a prominent automobile major wanted to understand the market scenario and identify the key cost elements. The client wanted to conduct a cost-model analysis to evaluate all the potential costs and revenues and assess the impact of each cost driver on the overall cost of the services. Moreover, with the help of industry best practices, the client wanted to identify the gaps that need to be bridged to further improve their cost efficiency. The primary concern of the automobile engineering player was to compare the costs of their services with that of the competitors and allocate their resources accordingly to meet the business requirements.

To identify the best negotiation levers, the cost model experts at SpenEdge carried to a robust research methodology. The methodology comprised of interviews and discussions with prominent stakeholders in the automobile engineering space. To recommend on the lowest cost mix, the experts also compiled information from reliable sources such as trade shows, company presentations, and newsletters.

The cost model analysis solution offered by SpendEdge assisted the client in identifying the direct and indirect costs, intangible costs, and the cost of potential risks.  Moreover, the client was able to conduct quantitative cost modeling and scenario-based cost modeling to understand the best negotiation levers and recommend the lowest cost mix.

Fundamental questions answered in this cost model analysis include:

Sp- cost model analysis


The Result

The engagement offered by SpendEdge helped the automobile engineering client perform trends, challenges, and opportunity analysis to compare the cost of all elements and determine if the benefits outweigh the costs. The automobile engineering client was further able to develop a cost movement forecasts for all cost elements to achieve better pricing results.


To know more about our cost model analysis solutions

request free proposal


Related posts:

[ess_grid alias=”Blog-studio” settings='{“max-entries”:”06″}’ special=’related’][/ess_grid]

 

Recent Case Studies

Four Pillars of Procurement Excellence

Four Pillars of Procurement Excellence

How can procurement excellence help businesses improve cost efficiency In recent years, companies have started focusing on procurement excellence to capitalize on their core competencies and keep pace with the rapid rate of globalization and stringent regulations....

read more

Industries

Services

Getting Down To Business

We are offering Free Trials to all our customers or prospects who have been impacted positively or negatively by Covid-19 and are looking to connect with prospect buyers immediately.

Contact us

COVID-19

Featured

Overview

Buyers

Diagnostic Test Kit

Additional Resources
Contact

A LOOK INTO THE FUTURE OF THE FOOD AND BEVERAGE INDUSTRY AFTER THE COVID-19 PANDEMIC

Identifying the Top 100 Coronavirus (COVID-19) Test Kit Manufacturers Across Regions

Sourcing and Procurement Market Intelligence Services

Products and Tools

Featured

Services Overview

Category Market Intelligence

Supply Market Analysis

Low-Cost/Best-Cost Country Sourcing

Benchmarking

Spend Analysis

Cost Modeling and Should-Cost Analysis

Total Cost of Ownership (TCO) Analysis

Supplier Risk Analysis

Supply Chain Risk Assessment

Supplier Sustainability Assessment

Commodity Price Forecasting

Category Management

Supplier Negotiations

Contract Management

Procurement Store

Purchase Ready-to-use Reports

SEinsightsTM

Our Robust Procurement Platform

BizVibeTM

Suppliers and Buyers Marketplace

SUPPLY MARKET ANALYSIS FOR A METAL MANUFACTURING COMPANY HELPS ACHIEVE ANNUAL SAVINGS OF $15 MILLION

Industries

Industries Overview

Automotive and Tire

Banking, Financial Services and Insurance

Biotechnology, Pharmaceutical and Life Sciences

Chemicals

Energy

Food and Beverage

Industrial and Manufacturing

ICT, Media and Entertainment

Mining, Metals and Minerals

Retail and CPG

Transportation

INCREASING LOCAL PROCUREMENT BY 28% FOR A COMPANY IN THE METALS AND MINING INDUSTRY – A CASE STUDY BY SPENDEDGE

Resources

Featured

Resources Overview

COVID-19 Resources

Blogs

Case Studies

Whitepapers

Webinars

Press Releases and Media Mentions

5 KEY CORONAVIRUS RISK ASSESSMENT STRATEGIES TO OVERCOME HEALTHCARE SUPPLY CHAIN CHALLENGES

IDENTIFYING STRATEGIC PURCHASING PRACTICES FOR A COMPANY IN THE US FOOD SERVICE INDUSTRY | SPENDEDGE’S LATEST SUCCESS STORY

Clients

Featured

Clients Overview

Who We Serve

Case Studies

SUPPLY CHAIN MANAGEMENT HELPS AN IMPORT AND EXPORT INDUSTRY CLIENT ENHANCE SUPPLY CHAIN VISIBILITY

REALIZING SAVINGS OF $15 MILLION IN PACKAGING SPEND FOR AN FMCG CLIENT – PACKAGING SOURCING STRATEGY

About Us

News

About SpendEdge
Why SpendEdge?
Vision, Mission and Values
Clients
Social Impact
Global Offices

Press Releases and Media Mentions

Upcoming Events & Webinars