CASE STUDY

SpendEdge’s Cost Benefit Analysis Helps a Specialty Chemicals Manufacturer Identify the Key Cost Elements

Jan 12, 2018

Overview of the Specialty Chemicals Industry

According to a recent research report, the global chemical industry is expected to generate a revenue of over 3 trillion USD with the majority of the contribution coming in from the APAC regions. Typically, the chemical industry includes establishments manufacturing a wide range of products such as agricultural chemicals, specialty chemicals, and commodity chemicals. The increase in technological innovations and chemical proficiency are expected to fuel the growth of this industry in the coming years. Companies within this industry space are also looking forward to realigning their portfolios to improve manufacturing capabilities and generate higher revenues owing to the increase in the M&A activities.

However, the specialty chemicals industry is prone to a face a few challenges, including:

  • Increasing competition: Over the past few years, the specialty chemicals industry is witnessing competition from other non-traditional sectors including the energy, utilities, and mining. As a result, staying ahead of the competitors is becoming increasingly challenging as firms also face the pressure of customer-centric environment of the industry.
  • Stringent regulations: The frequent fluctuations in the regulatory compliance are driving firms to migrate toward a better approach to manage the cost of compliance while being cost-effective.

To overcome these challenges, firms within the specialty chemicals space are leveraging the use of cost-benefit analysis studies. request free proposalCost-benefit analysis studies help companies reduce expenditures across the supply chain and meet the rising demand of the customers. These solutions also assist firms in gaining a deeper understanding of the cost structure for sourcing and supply chain activities.

The Business Challenge and Journey

The client, a leading manufacturer of specialty chemicals with business operations spread across the globe wanted to evaluate the influence of each cost driver on the overall cost of the products and services. The client wanted to identify the gaps that had to be bridged to increase the uptake of costs. With the help of cost benefit analysis, they also wanted to increase their focus on comparing models to improve the competitive position of the business as their primary aim was to efficiently utilize resources to meet the needs of the target audiences.

To help the evaluate the potential revenues and costs, the cost benefit analysis experts at SpendEdge tailored a comprehensive research methodology. This in-depth research approach included primary and secondary research coupled with qualitative and quantitative data collection procedures. The experts also compiled information from a wide array of secondary sources including company presentations and industry forums within the specialty chemicals industry.

During the course of the cost benefit analysis engagement, the client was able to gather information based on pricing through quantitative and scenario-based cost modeling. They were also recommended to implement a lowest cost mix model to reduce operational costs and calculate the impact of each cost driver on the overall cost.

Fundamental questions answered in this cost benefit analysis study include

The Results

This cost benefit analysis engagement helped the client reduce costs and enhance their overall operational efficiency over time. This engagement also helped the client gain a complete image of the cost developments within the specialty chemicals space.

To know more about our cost benefit analysis solutions

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