Overview of the Industrial Equipment Manufacturing
The industrial equipment manufacturing industry is responsible for the fabrication of products intended for industrial use from raw materials around the globe. It is the output of this industry which has made further mass manufacturing possible in most other industries. Industrial equipment is typically grouped into seven different segments. Construction, agricultural, and mining machinery; industrial machinery; and service and commercial machinery are all special-purpose machinery designed for a specific industry. One of the key trends in the industry is the rising use of high-tech production techniques. As a result, companies are introducing advanced technologies in response to pressure from domestic and foreign competitors. Computers, robotics, and programmable equipment are common, resulting in increased productivity due to improved efficiency and a decreased requirement for unskilled labor.
However, a few factors are expected to hinder the growth of the industrial equipment manufacturing industry. These factors include:
- The rise of the Internet of Things (IoT): The IoT represents the ever-growing network of physical objects embedded with sensors and communication technology, letting them exchange data with users and manufacturers. Internet-connected machinery and equipment are having a tremendous impact on industrial manufacturing. Assets that can communicate performance data to operators in real-time provide data that guarantees maximum uptime reliability and prevents protracted outages.
- The economic growth of developing markets: The demand for manufactured goods is rising fast as countries like India, China, and Brazil are experiencing strong economic growth. As a result, companies are raring to provide superior products and services while being cost-effective.
These factors are compelling industrial equipment manufacturers to leverage the use of strategic sourcing analysis solutions. Strategic sourcing analysis solutions help companies in generating optimal sourcing and procurement method and measurement tools to drive savings. Additionally, these solutions assist firms operating in the industrial equipment manufacturing sector to centralize the suppliers’ responses and compare the responses within the client’s system.
The Business Challenge and Journey
The client, a renowned manufacturer of industrial equipment with business operations spread across the globe, wanted to develop robust sourcing analysis capabilities across categories and geographies to enhance their visibility into spending and drive higher savings. Additionally, the client wanted to implement procurement automation technologies to streamline its sourcing processes, increase savings, and boost transparency.
The strategic sourcing analysis experts at SpendEdge tailored an integrated research approach to help the client improve their overall procurement process. The integrated approach included primary and secondary research methodology coupled with qualitative and quantitative data collection procedures.
With the help of SpendEdge’s strategic sourcing engagement, the industrial equipment manufacturing client deployed a comprehensive technology solution that integrated the end-to-end procurement process from source to contract — one that connected the results of sourcing events to the resulting buyer and supplier contracts and reflected the negotiated contract terms. Additionally, the client not only developed a best-practice methodology to reduce sourcing cycle time by also created a long-term interrogable repository of supplier responses and sourcing activities across business units.
Key questions answered in this strategic sourcing analysis engagement
The industrial equipment manufacturing client was able to take advantage of new opportunities, unforeseen circumstances, and changing market factors with a rapid response and in turn drove savings. Additionally, due to the ease of use and a single view of all procurement activities, the client reported substantial efficiency throughout their processes.