CASE STUDY

A Leading OEM Parts Manufacturer Witnessed a 3x Increase in Process Efficiency with the Help of Benchmarking Analysis

Dec 11, 2018

Benefits of Procurement Best Practices Benchmarking Analysis

Best practices benchmarking analysis turns out to be a valuable exercise for organizations striving to enhance procurement efficiency. Mainly because industry benchmarking analysis can provide you with hard facts about how your operations rate and by how much you can improve them. Today, organizations across industries are focusing their efforts on cost reduction. However, the procurement challenge of best-in-class organizations has been compounded by their diminishing ability to cut down maverick spend.

Most of the business processes inextricably link sourcing and procurement functions with other enterprise functions. Which means a process improvement in one specific function will have a ripple effect on other functions. Benchmarking analysis scrutinizes efficiency and effectiveness not just within the procurement function but initiates a wave of transformations across a wide range of enterprise-level functions.

The industry benchmarking analysis solutions enable organizations to:

  • Gauge their current capabilities
  • Assess overall performance relative to their business value and strategy
  • Identify and address potential risk factors
  • Classify and prioritize improvement opportunities
  • Plan, manage and accelerate the journey toward world-class performance

SE Demo

About the Client

The client- one of the world’s leading OEM parts manufacturer, headquartered in the US.

Client’s Challenge

A leading OEM auto parts manufacturer was looking at collaborating with an organization that offers industry best practices benchmarking services to drive measurable performance improvements throughout their supply chain operations. In addition to identifying the proven industry best practices, the OEM parts manufacturer wanted to gain detailed insights into ways to implement specific procurement best practices, with special attention to- potential supply chain risks and risk mitigation techniques.

Engagement Overview

To help the OEM auto parts manufacturer overcome their challenges the benchmarking request proposalanalysis experts at SpendEdge followed a blended research methodology consisting of primary and secondary research methodologies coupled with qualitative and quantitative data collection procedures. The benchmarking analysis template turned out to be beneficial in identifying the procurement best practices adopted by peer groups while highlighting the key suppliers in the OEM parts market. The industry benchmarking analysis solutions offered were empirically proven to correlate consistently with world-class operational performance. This not only improved the efficiency of procurement processes across their supply chain but also offered insights into the superior approaches towards innovation.

Key Findings

The benchmarking analysis template highlighted the performance gaps between the client’s current performance and the performance of world-class organizations. This, in turn, helped the OEM parts manufacturer to implement the industry best practices to close performance gaps. Also, with the help of industry benchmarking analysis solutions the OEM auto parts manufacturer was able to implement a best-in-class, scalable approach that helped them reduce maverick spend to improve process efficiency by 15%, which was 3x their previous rate.


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