The global demand for steel is expected to grow due to advances in developed economies and accelerating growth in emerging and developing markets, including India, Russia, and Brazil. The combination of factors such as growth in related complementary industries coupled with governmental regulations, general economic conditions, cyclical fluctuations in input prices, and end-use markets are also expected to impact the growth of the steel industry significantly. Technological developments and new product growth at competitive prices are also likely to be the critical factors for the future growth of the steel industry. However, according to the strategic sourcing analysis experts at SpendEdge, the unavailability of raw materials from the mining sector such as coal, iron ore, and power and achieving economies of scale to reduce costs and enhance the quality of output are some of the significant challenges being faced by the steel industry players. Moreover, in this dynamic era of relentless competition and innovation, it is vital for companies operating in the steel industry to comprehend the dynamics of the industry and refine their portfolios and business models to meet the ever-growing demands of their end-users. As a result of these challenges, companies operating in the steel industry space have started leveraging the use of robust strategic sourcing analysis solutions. Strategic sourcing analysis solutions help companies operating in the steel industry space to drive value across its sourcing and procurement activities through better spend visibility, staff training, and process transformation.
With over 13 years of proficiency in offering a wide array of strategic sourcing analysis solutions, SpendEdge helps client operating in the steel industry space to streamline their sourcing and procurement efforts.
The Procurement Pain Point and Insights Offered
A global steel industry client with offices spread across various geographies was facing predicaments common to enterprises that employ mergers and acquisitions as a growth strategy. For instance, when the client absorbed a businesses, they also absorbed their procurement processes, as well as their suppliers. Also, the acquired companies usually featured disparate information technology systems and lacked universal item codes. Furthermore, the company also recognized the scope for streamlining processes and cost savings in indirect and MRO spend.
To reduce sourcing costs, the steel industry client approached SpendEdge. SpendEdge, with a track record of end-to-end strategic sourcing success — from design through implementation, tailored a comprehensive research which included primary and secondary research methodology coupled with qualitative and quantitative data collection procedures.
The strategic sourcing analysis helped the steel industry client to identify and deploy the right sourcing strategies and negotiate favorable terms with suppliers. Additionally, the client was able to standardize the way they obtained materials with a comprehensive checklist. Furthermore, the client was able to develop category-specific sourcing strategies, create total cost optimization models, and analyzed the supply market.
Fundamental questions answered in this sourcing analysis engagement include
The strategic sourcing analysis helped the steel industry client classify and analyze more than $100 million of spend data. Additionally, the client was able to analyze and simplify even the most complex procurement scenarios with the help of a bid analysis tool.