Overview of the engine oil manufacturing space

The automotive engine oil market is segmented into four variants by technology. It can be segregated into premium engine oil which is used in two, three-wheelers, and hatchbacks. Fully synthetic engine oil, which is used in high-tech vehicles as it offers the highest level of lubrication and engine protection. Synthetic blend engine oil is used for SUVs and heavy-duty vehicles because of their added oxidation resistance and low-temperature properties. And lastly, higher mileage engine oil used for SUVs and heavy motor vehicles as it restores engine compression and reduces viscosity loss.

Tightening emission regulations by governments across the globe, increasing demand for low maintenance and friction and fuel-efficient engines from consumers, and demand for more advanced synthetic oils are all the factors driving the premium engine oil market.

However, our analysis of the global automotive industry space shows that premium engine oil manufacturers are facing challenges in terms of:

• Technology deployment: Adopting technology and implementing digital devices, sensors, and other databases that predict equipment breakdowns before they occur aids companies in improving their efficiency in the manufacturing process. Disruptions typically lead to mammoth spends. As a result, companies have to step forward and examine the role that digital technologies can play in improving their performance and avoid significant losses to the organization.
• Differentiated capabilities: In recent years, smaller automotive engine oil manufacturing companies with a set of skills have been able to obtain mature assets and outperform the majors in specific segments. However, for firms operating in the premium engine oil sector, possessing differentiated capabilities proves to be a crucial factor in their success.

Many such factors are forcing companies in the automotive industry to leverage the use of spend analysis solutions. Spend analysis solutions enable organizations to reduce inventory, improve sourcing cycle time, and assists in long-term planning and economic forecasting. These solutions also provide a realistic view of future spend requirements based on the forecast data.

The Business Challenge and Journey

Client background: A premium engine oil manufacturer with manufacturing units spread across the globe was facing several issues in analyzing their spending patterns.

Client issue: The client wanted to commission a spend analysis engagement to enhance their spend efficiency and optimize customer base. Furthermore, they wanted to identify and mitigate risks to overcome the substantial financial losses.

The spend analysis experts at SpendEdge carried out extensive research comprising interviews and discussions with prominent stakeholders in the global automotive industry space to help the client overcome their challenges.

Client journey: The premium engine oil manufacturing client gained relevant insights that helped them identify the potential bottlenecks in the supply chain. Additionally, the client also aggregated and visualized data to make better sourcing and supplier decisions. This helped them save on direct and direct spends and enhance business efficiency.

Key questions answered in this spend analysis engagement

The Results

The spend analysis solution enabled the client to develop a strategic sourcing model to reduce supply chain risks and establish their presence in the automotive industry.

To know more about our spend analysis solutions for the automotive industry

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