In the recent years, the manufacturing sector is witnessing a transformation characterized by the increasing focus on innovation, collaboration, and sturdy economic growth. With the growing volatility in the resource prices, industrial product manufacturers are developing frameworks and tools to improve transparency and mitigate supply chain risks. The industrial products manufacturing sector at large comprises of products and services to meet the growing demands of the end-user segments. The rising competition from the end-user segments is forcing leading industrial products manufacturers to realign their business models with the changing market dynamics. Although the industrial products manufacturing space is witnessing a promising growth, owing to the relentless demand from the Asia-Pacific region, additional factors may influence the growth of the market. These include:
- Shortage of skilled talent: Since the manufacturing sector is in the early stages of production, prominent industrial products manufacturers are relying on innovations to offer market leading products and related services. The top-line and bottom-line objectives in the industrial products manufacturing space can only be met through adequate skill talent. So, it becomes essential for the manufacturers to invest heavily on skill empowerment to address the rising concerns from the end-users.
- Regulatory risks: The industrial products sector at large is a victim of stringent government regulations. With the growing environmental concern, prominent organizations are facing the need to comply with the regulations while maintaining the product quality. Moreover, it becomes essential for the organizations to meet the regulatory concerns before offering the products to the end-users.
- Commodity price fluctuations: The recent economic slowdown has greatly affected the manufacturing space with frequent fluctuations in the prices of the commodities. To meet the growing demand, manufacturers are forced to shift their operations and supply base to their end-user segments to reduce costs and risk.
The Business Challenge and Journey
The client, a prominent industrial products manufacturer, wanted to identify and develop a list of prominent suppliers and further assess their strengths and weaknesses. With the help of a supplier profiling solution, the client wanted to seek ways to reduce procurement costs and the costs associated with inventory. The primary concern for the client was to offer a customer-focused business that aims at product and service optimization. Since suppliers play a pivotal role in meeting the demands of the end-user segments, the client wanted to profile prominent suppliers from a pool of suppliers and deliver quality in the products offered.
To gain better transparency into the supply chain, the procurement experts at SpendEdge carried out extensive research methodology comprising interviews and discussions with prominent stakeholders in the industrial products manufacturing space. To understand the current technological capabilities, the experts also compiled information across proprietary sources such as paid industry databases, company presentations, and industry forums in the industrial products manufacturing space.
The supplier profiling solution offered by SpendEdge helped the industrial products manufacturer identify the relative competition in the market and assess the strengths and weaknesses of the suppliers. The client was able to understand the pricing models for the products offered and reduce maverick spend while maximizing the value of the products. The supplier profiling solution also helped the client maintain a supplier database and segment suppliers based on the spend category.
Fundamental questions answered in this supplier profiling solutions include:
During the course of the engagement, the client was able to evaluate their suppliers through effective analytics and maintain a robust relationship with them. The solution also identified the negotiation levers and segmented the suppliers based on the purchase value, sourcing risk, and complexity.
To know more about our supplier profiling solutions in the industrial products space