CASE STUDY

Strategic Sourcing: Enabling E-commerce Businesses to Strengthen their Position in Australia

May 20, 2019

Globalization of supply chains has made ecommerce giants explore market opportunities in different countries. But at the same time, it has also increased the number of third-party logistics (3PL) providers and co-packing suppliers which is negatively impacting the cost efficiency of companies. They need a strategic sourcing model that can successfully reduce operational costs and improve spend visibility.

The Business Problem

Know how, a $10 billion-plus global leader in e-commerce business engaged with SpendEdge to leverage strategic sourcing to strengthen its position in the Australian region. The client also focussed on building an agile supply chain and improving third-party logistics (3PL) operations to reduce spend on transportation and warehouse management. The key objectives they were looking to achieve through this engagement were:

  • Manage the rising number of suppliers.
  • Improve the supply chain process
  • Reduce operational costs.
  • Track their purchasing budget, stocks, and supply market.

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Insights Offered & Solution Overview

The experts at SpendEdge collaborated with the client and  analyzed the suppliers’ market to efficiently design a strategic souring model. They followed a systematic approach  and identified areas of spend that can offer cost reduction opportunities. This approach helped the client to decide performance metrics for suppliers and select suppliers based on negotiation and potential risks. Additionally, it allowed the client to carry out a one to one mapping and direct the delivery request of products to concerned third party service provider.

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  • Achieve annual savings of approximately 14%, that accounted for almost $250,000.
  • Reduce the lead time production for SKUs with co-packing by more than 10%.
  • Analyze the suppliers’ market and identify feasible sources of obtaining raw materials, components, finished goods or services.
  • Conduct market analysis and determine performance metrics for suppliers.
  • Initiate the negotiation process with suppliers and invite them for competitive bidding.
  • To know more about strategic sourcing best practices, request more information. 

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Reduced procurement costs

The strategic sourcing solution offered improved budget planning of the company and helped them achieve savings of approximately $250,000. Also, it minimized the lead time production for SKUs with co-packing by more than 10%.

Reducing operational costs requires companies to implement strategic sourcing best practices. Request a free proposal and access our complete portfolio of strategic sourcing solutions.

Why SpendEdge:

SpendEdge delivers robust, real-time procurement market intelligence that helps sourcing and procurement professionals to improve strategic sourcing process. Our innovative procurement solutions help enterprises to transform structural capabilities of businesses and improve execution efficiency. Our state-of-the-art procurement solutions help enterprises to transform the structural capabilities, improve execution efficiency, and achieve better cost savings. We provide businesses with actionable insights and techniques to improve their strategic sourcing capabilities. Moreover, our procurement experts provide the latest industry news, supplier updates, and innovation landscape to help the client achieve significant cost savings.

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