CASE STUDY

Boosting Process Efficiency and Improving Spend Management for an Electronics Company

May 16, 2019

The Business Problem

The client – a global electronics manufacturer with operations spread across different Asia-Pacific regions was witnessing profit decline amid mounting macro uncertainties. The slower revenue growth in the emerging markets and the rising US-China trade tensions were compelling the client to improve spend management and mitigate challenges impacting the cost of finished products. The need to gain visibility into the spend and drive organizational value forced the client to engage with SpendEdge. The objectives they were looking to achieve through this engagement were:

  • Centralize legal entities into one procurement function and unify processes to deliver bottom-line savings.
  • Reduce capital expenditure to avoid excess inventory and quality issues impacting the spend and the cost of finished products.

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Solutions Offered and Client Journey

The experts at SpendEdge conducted a detailed market analysis to identify latent saving opportunities and created strategic plans that could help the electronics manufacturer to reduce their expenditure in every category. They analyzed parameters such as equity interests, sales volume, technology base, manufacturing and distribution capabilities, to provide in-depth insights to help procurement professionals comply with contracts and focus on strategic activities driving better revenues.

SpendEdge identified spend management best practices so that the company could integrate and automate all spend-related activities. They analyzed the complete purchasing cycle – from sourcing goods, selecting suppliers to setting up effective contracts to help the client align themselves with the key spend categories. SpendEdge focused on the big-picture view of spending and brought more addressable spend under management by increasing collaborations between trading partners and cross-functional teams in the company.  This helped the client to capture all their spend, enabling them to track wasteful spending and improve spend management.

Key Findings and Outcome

Increased Managed Spend to 46%

The spend management solutions offered helped the client to control costs of complex direct materials such as Printed Circuit Board Assemblies (PCBAs), Wire Harnesses, Box-Builds, and other Electromechanical Assembles used in the electronics industry. This enabled the client to lower the overall cost of goods and services and increase the capture of early payment discounts bringing the managed spend of the company from 27% to 46%.

Improved Spend Visibility

SpendEdge provided accurate and timely data to the client and enabled access to spend information across different levels of the organization. This improved spend visibility and facilitated cross-functional collaboration in the company.

Boosted Process Efficiency

The experts at SpendEdge devised strategies to improve the spend management system of the company. The system optimized all source-to-pay (S2P) processes, such as spend analysis, contract management, and strategic sourcing hand and allowed the client to focus on driving strategic initiatives.Want detailed insights on the spend management solutions delivered, request for more information.

Benefits of Improving Spend Management

Spend Management

What is Spend Management in Procurement?

Spend Management means end to end management of money in the organization in order to build products and services. It includes different aspects such as spend analysis, spend/classification/ spend categorization, spend performance management, and spend data management. In procurement organizations, spend management encompasses processes such as outsourcing, procurement, e-procurement, and supply chain management. Spend management is an ongoing process that is directed towards optimizing a company’s spend and improving its bottom line.

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