Supply Market Analysis Saves a Metal Manufacturing Company $15m A Year

Author: Lead, AI & ML Strategy, SpendEdge.

Overview of the Case Study

Key Takeaways

About the Client

The client is a prominent metal manufacturing company with facilities, service centers, and metal mart locations across the US. Headquartered in the US, the company is a leader in sheet metal fabrication and manufacturing.

Predicaments Faced

The client faced higher expenses due to inefficient procurement processes, poor supplier management, lack of spend visibility, fluctuating commodity prices, and inadequate technology utilization. The client needed a comprehensive understanding of competitors, their products, suppliers, services, and spending patterns within the manufacturing industry to reduce both direct and indirect costs. Additionally, the client sought actionable insights to develop a superior contract negotiation strategy.

Overview of the Global Metal Manufacturing Market

The global metal manufacturing industry, expected to reach US$4.5 trillion by 2024, will stabilize with developed economies recovering and emerging markets growing, driven by demand from automotive, electrical, and construction sectors. However, the market faces challenges from transportation constraints, raw material shortages, labor shortages, and fluctuating aluminum and steel prices.

What Drives the Global Metal Market?

The global metal market is influenced by several key drivers, including economic expansion, industrial progress, technological innovations, and environmental considerations. These factors shape the demand dynamics and market trends for metals such as aluminum, copper, and steel:

Methodology Adopted to Address the Challenge

To meet the client’s specific requirements, procurement experts at SpendEdge employed a comprehensive research methodology. They began by selecting relevant peer companies and gathering data such their procurement strategy, structure and alignment, technologies utilized, and support services rendered from reliable sources. This data was then normalized for comparability, and key performance indicators were benchmarked to assess suppliers’ financial health and capabilities. The analysis also helped the client identify price drivers and gain a deeper understanding of industry dynamics.

Solutions Delivered

Procurement experts at SpendEdge created a peer analysis template to enhance sourcing strategies, providing crucial insights into competitors’ supplier tactics and key factors affecting the clients sourcing decisions. This approach led to annual savings of US$15 million. The template included:

• Evaluation of the client’s performance, strategies, and operations against industry peers
• Analysis of competitive market forces
• Financial assessment of suppliers

These insights helped the client streamline their procurement processes and develop robust negotiation strategies.

Why SpendEdge?

SpendEdge has been efficient in providing sourcing and procurement strategies to 500+ companies across the globe. Our strength lies in delivering robust, real-time procurement market intelligence that supports sourcing and procurement professionals make informed decisions.

Interested to know how employing SpendEdge’s supply market analysis template helps metal manufacturing companies enhance their business outcome? Continue reading or request a FREE proposal.

Conclusion

The global metal manufacturing market is poised for substantial growth, driven by economic expansion, urbanization, technological advancements, and sustainability initiatives. The market’s dynamism is influenced by various factors including the rising demand in the Construction Industry, the critical role of Aluminum and Copper, and the strategic insights provided by Market intelligence. Efficient management of Steel raw materials and a focus on Metal recycling are essential to meet environmental regulations and promote circular economies. Associations like the World Steel Association play a pivotal role in standardizing practices and providing valuable data. Understanding the Base Metals Market, its size, and the dynamics of Metals and mining markets, Industrial minerals markets, and overall Metal markets is crucial for stakeholders to navigate challenges and leverage opportunities. By employing comprehensive supply market analysis, companies can optimize sourcing strategies, mitigate risks, and enhance business outcomes.