Spend Analysis: How SpendEdge Helped a Renowned Automotive Components Manufacturer Classify Spend Based on their Priorities
Overview of the Automotive Components Industry The automotive components space has doubled in the last five years with the improving economic conditions and rising per capita income levels. Also, the growing demand for new automobiles among the APAC region is contributing to the growth of the automotive components space. Moreover, leading organizations are planning to […]READ MORE >>
Overview of the Automotive Components Industry
The automotive components space has doubled in the last five years with the improving economic conditions and rising per capita income levels. Also, the growing demand for new automobiles among the APAC region is contributing to the growth of the automotive components space. Moreover, leading organizations are planning to invest highly in research and development to manage the rising costs while staying competitive on the prices. Factors influencing the growth of the industry over the years include:
- Changing market dynamics: The automotive components space is subjected to frequent changes in the market dynamics, owing to the increasing focus on raising fuel efficiency. With the altering preferences of the consumers, manufacturers are facing challenges in adjusting their strategies to thrive in this environment. Moreover, government regulations to curtail the carbon emissions are also compelling businesses to re-define the current operations and enhance the production efficiency.
- Innovations: In the recent past, the automotive space is witnessing massive innovations to meet the consumers growing demand for efficiency at comparable lesser costs. Moreover, the prevalence of car ownership has declined with the relative advances in technology such as autonomous driving. The presence of embedded technology such as sensors is exponentially increasing which further transforms the way how the automotive industry is functioning.
To promote the growth of innovations and accordingly allocate their resources to meet the business requirements, leading businesses in the automotive components space are leveraging spend analysis solution.
The Business Challenge and the Solution Offered
The client, a renowned automotive components manufacturer, was facing challenges understanding the current fluctuating market scenario and gaining adequate knowledge on the spending patterns. The client wanted to leverage spend analysis solution to gain visibility into the current state of spend and strategize effective ways to curtail maverick spend. The primary concern of the client was to manage the organizational spend and identify critical saving opportunities in an easy manner. Moreover, the automotive components manufacturer wanted to classify the spend based on their priorities and monitor fluctuating commodity prices.
To identify and calculate the market trends of commodities, a robust methodology was carried out by SpendEdge’s spend analysis experts. The methodology comprised of interviews and discussions with prominent stakeholders in the automotive components space. In order to generate actionable savings from spend reports, the experts also compiled information from reliable sources such as trade shows, government bodies, and company presentations.
The spend analysis solution offered by SpendEdge helped the automotive components manufacturer gain insightful analysis into the buying behavior of the customers. With the spend visibility, the client was able to identify the potential bottlenecks in terms of the savings leak, prices vary, and purchasing overlaps and make informed business decisions. Moreover, the solution also helped the client compare the spend with the industry peers and achieve sustainability into their spend patterns.
Fundamental questions answered in this spend analysis include:
The spend analysis engagement helped the client develop easy-to-use spend analysis dashboards to monitor the KPIs with that of the competitors. The solution also helped the client optimize their spending process to identify the latest saving opportunities in the supply chain process. Through a reliable spend analysis engagement, the client was able to build a short, and medium term spend strategy and improve process efficiency while improving the saving opportunities.