Electric Vehicles Market
The global electric vehicles market is changing rapidly. Once derided as toys, electric vehicles are on pace to reach incredible numbers this year, up from just a few hundred thousand over the last half-decade.
Governments across the globe have offered generous electric vehicles purchase incentives to help get the market rolling. Simultaneously, tightening fuel economy standards will require significant electrification of the vehicle fleet and China’s ‘New Energy Vehicle’ ratio is forcing automakers into electric vehicles faster than most of them would like. However, electric vehicles market players are facing challenges in terms of the charging infrastructure in many countries and the supply of raw materials including cobalt.
- The client: A leading electric vehicles market player
- Area of Engagement: Supply chain management
The client- is an American multinational corporation based in California, United States that specializes in electric vehicles. The company aims to offer electric vehicles at affordable prices to the average consumer in the coming years. The client wanted to inspect several categories of automotive components, which added up to $750 million in annual spend. Additionally, the objective of the client was just not to reduce the amount spent in the categories, but also rebalance their supply base to address the rising importance of global markets.
Summary of our Supply Chain Management Engagement
SpendEdge put across a team of supply chain management experts to extract the client’s spending information from internal databases and project future spending volumes. The experts also helped the client analyze the RFQ responses and conducted multiple rounds of negotiations with the potential suppliers. Furthermore, the experts conveyed the importance of supply chain management to the client’s business.
Solution Benefits and Business Impact
With the help of SpendEdge’s supply chain management solution, the electric vehicles market player was able to shorten the time needed to identify a pool of capable suppliers in low-cost countries. Additionally, the electric vehicles market client obtained a deeper understanding of global supply capabilities and achieved its goal of supplier diversification to address the increasing importance of supply chain management. This further helped the client identify US$ 79 million in savings for their categories, representing almost nine percent in annual savings.
Importance of Supply Chain Management
Supply chain management (SCM) is an integral part of every organization. Supply chain management is the dynamic management of supply chain activities to accomplish a sustainable competitive advantage and maximize customer value. Additionally, supply chain management streamlines everything from product flow to unforeseen natural disasters. Also, with an effective supply chain management, organizations can diagnose problems and disruptions accurately.