CASE STUDY

Category Management Helps a Leading Automaker Develop an Effective Strategic Sourcing Approach

Sep 22, 2017

Automotive Industry Overview

At present, the automotive industry is becoming extremely complex with the presence of numerous suppliers and OEMs offering leading-edge technology and products in the market. With the inflow of high capital investments, the industry has been facing relentless pressure to identify the potential risks and mitigate risks effectively to increase their ROI. Moreover, the increasing interdependence between the suppliers and buyers is forcing leading procurement organizations to advocate the need for robust category management. In the automotive industry, category management helps leading businesses to gain an understanding of the organization’s key value objectives and develop a set of strategies.

To understand the latest trends and identify potential opportunities, the client approached SpendEdge to commission a category management study. SpendEdge’s category management solution helped the client devise strategic sourcing strategies to source a category and its sub-categories optimally. Also, the solutions offered by SpendEdge can further optimize the category spend, understand budgets, and accordingly allocate resources.

SE Demo

Business Challenge

A renowned automaker was facing predicaments developing an effective strategic sourcing approach. The client wanted to assess the market landscape for the automotive industry in terms of the market dynamics, drivers, and the key competitors dominating the market space. Furthermore, the client wanted to identify the barriers and potential opportunities to effectively category the vehicles based on requirements.

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Our Approach

To assess the competitors and their category strategies, the client approached SpendEdge’s team of category management analysts. SpendEdge’s category management analysts carried out extensive research comprising of interviews and discussions with leading stakeholders in the automotive industry. Also, the category management experts further collated information from various proprietary sources such as paid industry databases, company presentations, newsletter, and magazines in the automotive space.

By assessing the latest developments in the automotive industry, SpendEdge’s category management experts helped the automotive industry client to apply effective procurement methodologies to ensure maximum savings. With the help of SpendEdge’s category management solution, the automotive industry client was able to devise a robust SWOT analysis and effectively analyze the supplier pricing and the cost structure.

Business Outcome

With the help of the category management solution, the automotive industry client was able to identify the key growth drivers and gain holistic insights into the category. The client was further able to gain a complete overview of the suppliers and forecast pricing accurately in the automotive industry.


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