Spend analysis is the method of identifying, gathering, grouping, categorizing and analyzing an organization’s spend data with the primary focus on decreasing the procurement costs and improving efficiencies. This is achieved by making use of real-time data and analytics, which help envision all the data sets to make better sourcing and supplier decisions. This helps reduce cycle time, improve compliance, and recognize maverick spend patterns. Owing to such benefits, many automotive firms have started opting for spend analysis studies to cut down the costs and improve process efficiencies.
The Procurement Pain Point and Insights Offered
A leading electronics manufacturer wanted to gain quick savings and realign their supply chain organization structure for indirect categories. As a result, the client wanted to develop a comprehensive global spend assessment of their indirect spend. Additionally, the client also wanted to identify and assess the key suppliers in the market and analyze their spend patterns. Furthermore, they also wanted to identify better strategies to enter into a contract negotiation with their current suppliers.
The spend analysis experts at SpendEdge followed a blended research methodology approach, which included primary and secondary research coupled with qualitative and quantitative data collection methodologies to cater to the specific category requirements of the client. During the course this study, the client was offered reports that helped them plan, prioritize, and implement several sourcing initiatives within the supply chain organization and across multiple global plant locations. This approach enabled the client to meet the objective of identifying huge saving opportunities through supplier aggregation and determine the categories of indirect spend to focus upon. Furthermore, the client also gained insights on superior strategies to enter into a contract negotiation with the current suppliers.
Key questions answered in this spend analysis engagement include
The spend analysis study helped the client devise detailed sourcing strategies and realize huge cost savings for indirect spend. Additionally, they achieved quick savings and process efficiencies for categories such as office supplies, computer peripherals, and MRO. Furthermore, the client was also able to identify and assess the key suppliers in the market and analyze their spend patterns.