How Spend Analysis Helped a Top Food Manufacturing Company Increase Managed Spend By 80%
A leading food manufacturing company was looking at devising a strategic approach to minimize procurement costs. The client approached SpendEdge to understand the benefits of spend analysis when it comes to analyzing spend, decreasing procurement costs, and enhancing efficiency. A detailed quantitative analysis of various categories within the supply chain was carried out to categorize spend data and develop an effective spend analysis framework.
The client is a well-established food manufacturing firm with business units and operations spread across Europe.
The food manufacturing client’s operations were spread across Sweden, Denmark, Belgium, Germany, Netherlands, France, Finland, and other European countries. It consisted of 22 legal entities, each with a different procurement process and spend management framework.
The client realized the benefits of spend analysis and decided to centralize all their procurement functions and spend management systems by devising a robust spend analysis platform. Hence, they wanted to employ an effective approach to regain control of spend data generated across their business units.
Key questions answered in this spend analysis study include:
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How did SpendEdge Help the Client?
With an increased corporate focus on spend management, the food manufacturing client invested in spend analysis to effectively manage their organizational spend.
- Step 1: Capture relevant spend data
The first step involved the process of identification and gathering spend data from across the client’s business units. It starts with the identification of key business areas that deal with sourcing such as finance, marketing, and other procurement areas. The collected data is then accumulated to form a single source.
- Step 2: Categorize spend data
Once the data is captured it is necessary to categorize it in order to begin the spend analysis process. Categorizing the captured spend data into meaningful groups helps identify areas of maximum and minimum spend. By doing so companies can identify and focus on the target spend category.
- Step 3: Detect the spend categories that can be optimized
The most essential step in spend analysis revolves around the identification of spend categories that are available for spend optimization. Since a few spend categories do not fall under the optimizable group, it is essential to segregate them into two i.e., addressable and non-addressable spend categories.
The identification and classification of addressable spend data reflect the true nature of supply markets and helps generate a link between the spend categories and the allied supply market.
- Step 4: Development of a personalized spend analysis platform
The spend analysis experts at SpendEdge devised a four-step comprehensive approach that helped the food manufacturing client to gain a holistic view of spend categories. A similar approach could be adopted by other food manufacturing companies to enhance spend visibility and drive profit margins.
Benefits of Spend Analysis
The solutions offered by SpendEdge’s spend analysis experts helped the food manufacturing client to increase managed spend by 80% across their business units. This spends analysis engagement also uncovered reasons for major issues of concern that affected the client’s overall profit margin.
The developed spend analysis framework played a key role in enhancing spend visibility which in turn helped them improve contract compliance. The associated benefits of spend analysis played a major role in improving the spend management capabilities of the firm, which, in turn, helped them drive savings.
Benefits of Spend Analysis for Food Manufacturing Companies
There are substantial savings opportunities hidden in the spend data generated by food manufacturing companies across the globe. Extracting valuable insights from raw spend data is now made easy with the help of our spend analysis solutions. SpendEdge’s spend analysis solutions are designed to offer greater spend visibility into the organizational spend data, thereby enabling food manufacturing companies to analyze their spend patterns across business segments.
A methodical approach to spend analysis tied with years of consulting expertise is what drives food manufacturing companies to approach us to help them devise an effective spend analysis platform.
In this spend analysis engagement, we helped a leading food manufacturing client to enhance their spend optimization capabilities by devising a spend analysis framework. Such an approach can also be adopted by other food manufacturing companies to increase managed spend and maximize the potential of their supply networks.
To know more about how spend analysis helps food manufacturing companies
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