CASE STUDY

Cost Model Analysis Assists a Leading Specialty Chemicals Supplier to Understand the Cost Structure and Develop Better Negotiation Strategies

Aug 30, 2017

Category Overview

The specialty chemicals industry has been analyzed and segregated based on types, which includes cosmetic chemicals, food additives, water treatment chemicals, textile chemicals, paper and pulp chemicals, construction chemicals, and oil field chemicals. The growth of this industry can be attributed to the increasing urbanization in emerging economies, which is driving public housing and infrastructure projects. This, in turn, has increased the consumption of specialty chemicals in the construction industry such as adhesives and sealants, protective coatings, concrete admixtures, and asphalt additives. However, according to the cost benefit analysis specialists at SpendEdge, the fluctuating prices of raw materials in this industry is one of the biggest challenges for firms looking to invest in this market space.

Consequently, to gain a strong foothold in this market space, specialty chemicals firm across the globe have started opting for cost benefit analysis studies to understand the cost structure of the supply chain and develop better negotiation strategies with suppliers.

The Procurement Pain Point and Insights Offered

A leading specialty chemicals firm wanted to identify the cost elements across the supply chain. Additionally, the client wanted to assess the impact of each cost driver on the overall cost. They also wanted to gain insights on the negotiation levers adopted by suppliers to ensure low-cost raw material sourcing and better negotiation strategies. Furthermore, the client also wanted recommendations on lowest cost mix to cut down the overall cost. request free proposal

To cater to the specific category requirements of the client, the cost benefit analysis specialists at SpendEdge followed an in-depth two-step research methodology, which included primary and secondary research coupled with qualitative and quantitative data collection procedures to address the client’s issue. During the course of this cost benefit analysis study, the specialty chemicals client was able to forecast cost movements across all cost elements. Additionally, the client was able to evaluate the impact of each cost driver on the overall cost. The cost benefit analysis study also offered the client a superior sourcing and negotiation strategy to source raw materials; thus, helping the specialty chemicals client to cut down on their overall cost across the supply chain.

Key questions answered in this commodity cost benefit analysis study include

cost benefit analysisBusiness Outcome

The cost benefit analysis study helped the specialty chemicals client identify the cost elements and understand the cost structure across the supply chain. Additionally, the client also obtained recommendations to develop superior negotiation strategies with their suppliers.

Want to know more about our cost benefit analysis for specialty chemicals firms?

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