What is Category Market Intelligence and why is it important in the Automotive Industry?

The overwhelming rise in demand has led to various challenges for companies in every industry, and businesses often struggle to identify, organize, and procure products and services efficiently. The presence of procurement categories, helps streamline, plan, and separate demands, needs, and services. Category market intelligence enables the optimization of procurement categories, and in turn streamlines the procurement process, mitigates various risks, reduces unnecessary spend, and improved overall efficiency. In the automotive industry, there has been a significant upsurge in innovation, demand, and developments, leading to a dire need for efficient planning, organization, and segregation of responsibilities. Therefore, determining procurement categories, and identifying the needs of each category individually enables more collaborative, clear, and streamlined inter-departmental communication, and helps develop data-driven strategies. Making accurate and effective business decisions requires relevant information, proven strategies, and long-term plans. The benefits of category market intelligence surpasses the procurement department and helps companies improve their overall performance, build robust business partnerships, and maintain a comprehensive understanding of their market.

What are the Benefits of Leveraging Category Market Intelligence in the Automotive Industry?

Efficiency: Procurement is a time-consuming and challenging process, and companies often find themselves struggling to keep pace with the rapid pace of changes, needs, and purchases made at all times. Procurement categories help companies segregate these needs and enable a more streamlined approach to the various needs in the procurement department. This also enables increased investment in intelligence, and category market intelligence provides companies with crucial information regarding trends, upcoming market developments, and demand-supply shifts. With data and relevant information, CPOs can ensure each category is efficiently handled, develop better long-term strategies, negotiate better terms and expectations, and provide employees with the insights required to operate in accordance with market and industry standards.

Spend Control: Procurement categories provide all relevant departments along the supply chain with a clear perspective of the needs, demands, and requirements that are crucial and must be addressed. The process helps develop a centralized system to track various necessities, which reduces the risk of unnecessary expenses, mitigates various challenges, and helps departments support each other. As the automotive industry grows, companies need to make substantial investments in innovating new products, differentiating their offerings, and meeting consumer demand. Category market intelligence provides crucial data regarding suppliers, current market prices, and current necessary purchases, while a centralized system helps minimize repeat orders, reducing the chances of maverick spend or over-ordering.

Supplier Selection and Performance: In the procurement department, suppliers play an extremely crucial role, and companies must invest significantly in identifying, negotiating with, and signing contracts with the right suppliers to meet their needs. With category market intelligence, companies have an improved understanding of their organizational needs, can identify best-fit suppliers for their needs as per the relevant categories, and have their specified expectations met. It minimizes the potential risks of bulk ordering, and enables a more precise system. Further, utilizing category market intelligence can help companies identify and leverage key performance indicators (KPIs) that are more specific and accurate. Consequently, supplier performance can be closely monitored and companies can successfully ensure that their business partners meet the stipulated standard.

Accurate Market Information: Understanding every factor, trend, challenge, industry development, and demand shift impacting a market can be highly challenging, particularly in a sector as large as the automotive industry. Category market intelligence eases this process by allowing companies to conduct in-depth analysis of every procurement category and the correlated market. In the automotive industry, categories are often determined on the basis of types of vehicle, engines, model type, and other major distinctions. This categorization enables closely reviewing each different market, and making decisions according to the varying data in each market. This leads to higher accuracy, a more comprehensive understanding of the factors impacting the market, and provides companies with an all-encompassing view of their market.

Improved Tracking: Ability to analyze various markets, improve procurement department efficiency, create a more centralized system, track spend, and identify the ideal partners significantly improves transparency, understanding, and tracking. Various categories help companies closely assess the trends, challenges, risks, and growth drivers impacting each category, and gain a more insightful view of the overall performance. It also provides a clearer and more comprehensive approach to data collection and analysis, with tracked expenses from each category, accurate metrics of supplier performance, data-driven insights into the market, and a streamlined supply chain. Overall this categorization helps companies gain a more segmented and clear perspective into major operations and minimize potential risks.

Success Story – SpendEdge Advantage

An automotive manufacturer witnessed a sudden decline in productivity, transparency, and clarity in the procurement department, and consequently along the supply chain. Unaware of the lasting impact of major changes in certain categories, the company was unable to identify the issue and chose to partner with SpendEdge. Our experts leveraged their expertise in procurement categories and category market intelligence to gain a clearer perspective of the changes in the market, and the factors impacting the manufacturer’s productivity and growth. After efficiently categorizing all the products and offerings, the SpendEdge experts identified a lack of comprehensive insight into the various category markets, the development of new trends and challenges, and a lack of efficient systems to tackle said challenges. Our category market intelligence experts then provided the company with clear insight into the value of creating, tracking, and maintaining proper categories within the organization, and utilizing category market intelligence to make well-informed decisions, data-driven strategies, and sustainable business plans. By implementing these changes, the company efficiently addressed various necessary challenges, made major changes, improved productivity, transparency, and inter-departmental collaboration.