Casestudy Archives - SpendEdge

Category: Casestudy

metals and mining

Increasing Local Procurement by 28% for a Company in the Metals and Mining Industry – A Case Study by SpendEdge

European Metals and Mining Industry Outlook

Metals and mining companies operating Europe are set to remain in recovery mode as a sluggish recovery in mineral prices keep investment activity subdued. Companies must remain cautious and focus on improving balance sheets to protect themselves from potential price volatility. Sourcing locally and developing the local supply base could be an effective way for companies to increase the security of supply, reduce costs, minimize lead times, and gain more favorable negotiations on accessing resources. Also, they could improve access to capital and provide more competitive access to inputs.

Business Challenges Faced 

The client, a leading European company in the metals and mining industry wanted to buy more locally manufactured goods that could match the cost, quality and delivery time expectations while investing in sustainable economic growth. However, the company felt the need to address current barriers to local procurement in host countries. Local suppliers lacked the necessary capabilities and the client required suppliers with sufficient capacity to meet their procurement needs. Also, it was highlighted that procuring specialized equipment was significantly more difficult in-country and finding goods manufactured locally a challenge. 

Inability to devise local procurement strategies can cost metals and mining companies in terms of revenues and flexibility. Request a free proposal to access our tailor-made procurement market intelligence solutions.

Our Research Approach 

To help the client address the gaps and barriers to local procurement, the experts provided supplier insights to create a local supplier database for the tendering process. They recommended breaking up bids to increase access to local suppliers. They embedded supplier development in the tender process by including key performance indicators in their contracts and tracked the spend of suppliers locally.

Moreover, to drive local manufacturing, the experts identified potential markets for certain products. They analyzed factors influencing the client to buy locally. These factors could be broadly classified into themes such as:

  • proactive economic
  • proactive social
  • reactive economic
  • reactive social

(more…)

Supplier risk analysis

How Supplier Risk Analysis Helped an FMCG Company to Improve the Product Quality through the Supply Chain

US FMCG Industry Overview 

Globalization and the fast improvement in high-quality products have created high levels of market pressure for companies. The number of agents involved in the supply chain network has increased, making supplier risk analysis very difficult. For this reason, companies have more delay points and greater uncertainties. Today, greater coordination, communication, and monitoring are required of firms. The obvious problem is that even a minor incident in one part of a supply chain can have disastrous effects on other parts of the supply chain network. Leveraging supplier risk analysis solution becomes imperative in such a situation to ensure the smooth functioning of the supply chain.

Business Challenges Faced 

The client is one of the leading distributors in the US FMCG industry that supplies their imported products to most of the Central American regional market. It distributes popular products with a high volume, and its major supply base includes 30 first-tier suppliers, which are mainly located in America. More than half of the first-tier suppliers are large firms and they are mostly located in Mexico. The company relies heavily on international suppliers. The company, therefore, wanted to examine risk quality from suppliers’ and customers’ perspectives to gain a specific insight into risks in their global supply chain.

Performing a supplier risk analysis is crucial for companies to manage quality risk in the global supply chain. Request a proposal to access our supplier risk analysis solutions for FREE now!

Our Research Approach 

The collection of accurate information related to supplier risks was complex and required analysis and an overall framework throughout the sourcing lifecycle. The experts analyzed all suppliers associated with the organization and identified four major risks. These included quality risk, price risk, technology risk, environmental risk. Based on the supplier risk analysis, the experts recommended a product quality risk strategy program to define action plans for improving the product quality through the supply chain.

The supplier risk analysis solution offered helped the client to terminate suppliers’ relationships with high risks. Also, the information about supplier’s sources and production practices improved visibility in the supplier production process. The client was better able to manage contracts with the main suppliers and implement rules with a quality test policy. The insights provided also helped the client to contract an external organization to inspect, evaluate and implement new companies’ practices in order to improve the flow of goods and information.

Wondering how you can develop an effective supplier risk analysis template and gain insights to mitigate quality risks?

 Reach out to our experts for customized solutions.     

Engagement Outcome 

With the help of supplier risk analysis solution, the company gained better insights to improve, transparency, implement quality control programs, and reduce the product transit time. Risks associated with the organizational structure were identified and action plans were developed to increase the flexibility of manageable quality products.

Implementing a quality control program requires companies to improve the supplier risk analysis process. Subscribe now to enjoy free access to our web-based platform for better insights. 

Benefits of SpendEdge’s Supplier Risk Analysis Solution

  • Gain detailed insights into every attribute of a supplier’s financial stability.
  • Recognize and uncover hidden cost drivers in the customer-supplier relationship.
  • Better plan new products and services based on a good understanding of suppliers’ capabilities.

To know how supplier risk analysis report can benefit your organization, request for more information from our analysts.

retail supply chain

Achieving an Average Increase of $45 Margin Dollars Per Square Foot in the Softlines Business by Improving Retail Inventory Management

US Retail industry Overview 

The specialty retail industry in the US operates in a high-visibility and consumer-focused environment. It is exposed to the vagaries and shifting whims of target audiences, which are increasingly demanding and segregated into specific demographics. In order to be successful in such a heavily competitive marketplace, companies must adopt retail inventory management strategies and technologies that go far beyond the traditional focus on cost savings efforts alone. Also, they must gain greater visibility and offer a smoother multichannel shopping journey delivered seamlessly across bricks and clicks.   

Business Challenges Faced 

A $5 billion specialty retailer operating 500 stores under multiple banners, store formats and brands in the US was faced with the implementation of a new retail inventory management strategy to support softlines. As a part of this project, there was a need to maintain inventory levels that could meet demand without over-purchasing. The objective was to identify improvement opportunities as well as uncover business processes that posed a risk to achieving the transformation’s benefits and adoption of the new strategy. Moreover, the client also wanted to manage the money spent on inventory, optimize the storage space and identify effective purchasing and pricing procedures to avoid dead stock.

Improving retail inventory management is crucial for companies to reduce the money spent on inventory. Request a proposal to access our retail inventory management solutions for FREE now!

Our Research Approach 

The experts at SpendEdge assessed the client’s existing retail inventory management techniques and processes to recommend areas of maximum value related to the handling and merchandising of products. They reviewed the organizational structure, roles, and standards and helped the client to reconcile against industry-leading practices. This enabled the client to identify multiple opportunities for improvement to store inventory operations and overall business performance within operational areas such as restocking, price changes, and store transfers.

The engagement further enabled the client to gain real-time insights into every aspect of their business — from sales and inventory counts to product performance and profits. The retail inventory management best practices identified action items and prioritized tactical plans for both immediate actions and as part of the system rollout. High priority action items included developing SOPs for item ticketing and inventory counts. Additionally, a formal store-to-corporate communication channel was implemented to improve the business process.

Wondering how you can improve the retail inventory management process and gain insights to improve operational areas?

Reach out to our experts for customized solutions.     

Engagement Outcome 

The retail inventory management engagement helped the client to achieve an average increase of over $45 margin dollars per square foot in the softlines business. Also, it empowered the client to improve sales, reduce markdown, and increase replenishment efficiencies.

Identifying retail inventory management best practices requires gaining real-time insights into every aspect of their business. Subscribe now to enjoy free access to our web-based platform for better insights. 

How Can Retail Inventory Management Solution Help Businesses? 

  • Mostly the cost of storage is directly dependent on the amount of inventory stored. With the solution, companies can make use of planograms and optimize inventory storage.
  • A retail inventory management system reduces the possibility of lost inventory, thereby minimizing revenue losses.
  • It can help companies manage their supply chain and stay on top of changes in the industry.

To know how our retail inventory management solution can help your business, request for more information from our analysts.

Strategic Purchasing Practices

Identifying Strategic Purchasing Practices for a Company in the US Food Service Industry | SpendEdge’s Latest Success Story

US Food Service Industry Overview  

The US food service industry is nearly equal in size to food retailing. The category includes full-service restaurants, fast food outlets, catering, and vending companies, some cafeterias, and carry out operations. However, distributors and manufacturers in the US food service industry cannot assume that these operators will continue to drive incremental profitability. They will have to address commodity swings, increasing operator level costs, and rising input costs. Also, they must identify strategic purchasing practices to address the reducing profitability of the market due to the penetration of GPOs and independent operators across all foodservice segments.

Business Challenges Faced 

The client is a leading company in the US food service industry that manages numerous brands and operates 250 cafes in different US states. The growing nature of contracted procurement in the US food service industry was suppressing the profit margins of the client. Group purchasing organizations were becoming power buyers and taking their negotiated prices meant for customers. Margins, that were already compressing over the past several years, tightened even more and started impacting the health and strength of the business. The client, therefore, decided to collaborate with SpendEdge to identify strategic purchasing practices to manage the change proactively and better prepare themselves for the shift. 

Inability to increase profit margins can prove to be a major barrier for the growth of companies in the US food service industry. Request a free proposal to access our complete portfolio of purchasing solutions and identify strategic purchasing practices.

Our Research Approach 

To help the client identify strategic purchasing practices, our experts provided a comprehensive overview of the sales and volume incrementality of GPOs and another contract business relative to the lower overall margin. They offered market insights that helped the client understand key leverage points and create pull at the operator level to avoid the commodity trap.

Seeing the complex nature of the purchase, our experts recommended auditing and managing trade-spending programs. Understanding true cost to service and ensuring contract compliance reduced the leakage of funds, thereby, improving profitability. Also, the engagement helped the client to become much more efficient in terms of logistics and drop sizes. Suppliers who were reliable in multiple dimensions were chosen to ship products on time without error. Purchasing relationships were simplified to improve the sourcing process and achieve minimalism in supplier arrangements.

Analyzing the US food service industry is critical to identify strategic purchasing practices and manage trade-spending programs.

 Get in touch with our experts for customized solutions   

Engagement Outcome

Based on our experts’ recommendation, the client started using contract pricing to ensure that higher-margin business remains profitable. They ensured favorable pricing based on the contract for operators to avoid price-extendibility. Also, strategic purchasing practices identified provided necessary insights to deploy sales force as activities changed from demand creation to driving compliance.

Wondering how you can identify strategic purchasing practices and address changes in the US food service industry? Subscribe to SpendEdge’s platform and gain exclusive insights into strategic purchasing practices  and 1000+ procurement reports.

Key Strategic Purchasing Practices for the US Food Service Industry

  • Acquire knowledge of the other enterprise’s social values to improve the supply chain socialization process.
  • Integrate with suppliers at the operational level for improving business performance.
  • Engage with fewer suppliers to reduce costs, improve design cycle times and foster innovation development. 

(more…)

market analysis

SpendEdge’s Supply Market Analysis Solution Helped a Premium Automobile Company to Balance Between Tier -1 and Tier-2 Suppliers

Swedish Automobile Industry Overview

The automobile industry in Sweden generates about a million jobs and accounts for over 10 percent of the country’s total export. Sweden offers a good market for high-quality and technically sophisticated automotive products. Customers are very safety conscious and manufacturers are known to follow high safety standards. In regard to the aftermarket, there is a growing need for properly-equipped auto shops and new technology that can meet the demand for repair and maintenance. Also, it is important for companies to focus on knowledge-based partnerships and innovation processes to devise strategies to secure and develop their position as one of the world’s leading automotive firms.

Business Challenges Faced

A Swedish premium automobile company, with over 20,000 employees worldwide wanted to analyze the market and find suitable suppliers to source from. The supply market for test equipment of new technologies, similar to electrified vehicles, autonomous drive, and connected cars, was becoming challenging for the client to understand. The number of actors entering the market is highly dynamic when compared to other supply markets in the industry. The client, therefore, collaborated with SpendEdge to perform supply market analysis for the test equipment of a specific new technology and devise a competitive sourcing strategy.

Want to know how performing supply market analysis can help you understand market dynamics? Request a free proposal and we will get back to you with customized supply market analysis solutions.  

Our Research Approach

To cater to the specific requirements of the client, our experts analyzed the existing supply market. They gained specific insights into the key market players and their role in the market. In the next step, characteristics of products to be sourced were studied. Material costs, direct labor costs, overhead costs and profits were analyzed to perform cost-price analysis and understand what profit-margin is reasonable for the product. The experts then analyzed supplier competition and buyer competition to identify prominent suppliers on the market. Value-adding activities were defined to understand the supply chain. While performing supply market analysis, the experts also analyzed new geographical markets and possible product supplements or substitutes.

This helped the client to identify ways to secure the supply of the test equipment. Insights gained helped the client to develop effective sourcing strategies depending upon the product’s level of competitiveness and the strategic importance of the competence to the firm. Based on our experts’ recommendation, they established partnerships with several Tier-2 suppliers to pool complimentary skills.

Wondering how you can create supply market analysis framework and identify potential suppliers in the market?

Reach out to our experts for supply market analysis solutions.    

Engagement Outcome

The supply market analysis carried out by our experts helped the client to adapt the test equipment to suit their testing activities and control the product quality. The client was able to balance between Tier -1 and Tier-2 suppliers and reduce the risk of paying higher. Partnerships like this eased new product development and helped the client share risks and costs.

Conducting supply market analysis is crucial for companies to evaluate suppliers’ performance. Subscribe now to access supply market insights from our procurement experts. 

How to Conduct Supply Market Analysis?

Steps to Perform Supply Market AnalysisTo know how you can successfully perform supply market analysis, request for more information from our analysts.

risk assessment

Reducing the Probability of Supply Risks by 50% for a Heavy Machinery Company by Performing Supplier Risk Assessment

Heavy Machinery Sector Overview 

The manufacturing/industrial engineering sector accounts for over 20 percent of the GDP in Sweden, with advanced manufacturing bringing in approximately USD 40 billion. Manufacturers are early adopters of new technologies alongside traditional tooling. They are keen to turn their production facilities into factories of the future with quick response capabilities, flexibility, and reduced risks. This case study is a classic example of how we helped a leading manufacturer to improve flexibility and reduce supply risks.

Business Challenges Faced 

The client is one of the leading companies in the heavy machinery sector that supplies products and services to both domestic and foreign customers. The company produces highly customized and configured products and uses a make-to-order production strategy to be more flexible to product variability. The company has a diverse set of suppliers for different parts to produce mills and their performance impacts the sustainability of the company. However, they were facing significant supply risk problems by overlooking supplier-related risks.

Performing a supplier risk assessment is crucial for companies to develop effective supplier management strategies. Request a proposal to access our supplier risk assessment solutions for FREE now!

Our Research Approach 

The experts at SpendEdge understood that supply risks could be addressed by eliminating unreliable and risky suppliers. This could be achieved by considering the risk level of suppliers. Therefore, they analyzed key suppliers as the most critical suppliers of the company and selected them for analysis. A proprietary supplier risk assessment model was created to evaluate suppliers based on purchase price variance, financial condition, manufacturing capability, flexibility. Factors such as technological capability, the average defect rate of the supplier, quality management, supplier lead time variability, ease of communication, reliability, and after-sales service were also critically examined to determine the risks.

Moreover, the raw data were examined to gain insights into the risk structure of each supplier cluster and provide more accurate information. This helped the client to identify suppliers with the highest risk profile. A supplier management program was then developed based on the results of the analysis to eliminate suppliers with a high-risk profile. The interpretations of the results also provided insights for supplier risk management actions to mitigate supply risks.

Wondering how you can develop an effective supplier risk assessment template and gain insights to mitigate supply risks?

Reach out to our experts for customized supplier risk assessment solutions.    

Engagement Outcome

SpendEdge’s supplier risk assessment solution helped the heavy machinery company to analyze risks related to the capabilities of the supplier. This enabled the client to procure parts and equipment at better prices and reduce the probability of supply risks by 50%. Additionally, the customized supplier risk assessment report provided the client with much-needed information on suppliers’ reliability, operational risks, and price risks, thereby reducing the supply risks significantly. 

Conducting supplier risk assessment involves performing cluster analysis and understanding risk structure of each supplier cluster. Subscribe now to enjoy free access to our web-based platform for better insights and supplier risk assessment solutions. 

How to Perform Supplier Risk Assessment?

  • Identify the vendors that present the most risk to the business. 
  • Create a supplier risk assessment template to find about the vendor’s policies, processes, and procedures. 
  • Develop an appropriate supplier risk management strategy to mitigate the risks. 
  • Depending on the supplier and their risk profile, order more supplier risk assessments on a more regular basis. 

To know how you can develop an effective supplier risk assessment framework, request for more information from our analysts.

Surgical Instruments

Reducing the Costs of Goods Sold (COGS) by 27% for a Surgical Instruments Company in the US

US Surgical Instruments Industry Overview

The surgical instruments industry makes an enormous number of products and plays a critical role in developing new medical technologies. The industry has a relatively larger number of companies that engage in research and development of new devices for specific therapeutic areas. The market dynamics for surgical devices vary greatly depending upon the device. Companies compete heavily on price and often need high sales volume to be more profitable. This case study is a classic example of how we helped a leading company in the surgical instruments industry to reduce the COGS significantly.

Business Challenges Faced 

The client, one of the leading firms in the surgical instruments industry was facing predicaments due to increasing competition from new low-cost manufacturers in the US. They urgently needed to identify ways to reduce their costs of goods sold (COGS). Visibility into organizational spend, granular insights on buying activities, and optimization of the supply base were imperative to achieve spend reduction goals. However, this was putting additional strain on their already lean procurement and sourcing department. The client, therefore, felt the need to associate with SpendEdge to gain strategic sourcing and procurement market intelligence services. 

Inability to compete with low-cost manufacturers can impact the ROI and market position of companies in the surgical instruments industry. Request a free proposal to access our tailor-made solutions.

Our Research Approach

With experience in sourcing, the experts at SpendEdge understood the best approaches to every step of a thorough strategic sourcing process in the surgical instruments industry from identifying suppliers to the RFP process. They identified quality direct material suppliers for a reasonable price point to help the client effectively navigate a global partnership with suppliers considering the current state of socio-political unrest in several foreign countries. This helped the client to nurture a relationship with reliable low-cost suppliers and enhance the strategic sourcing process.

Furthermore, the insights provided enabled the client to explore potential synergies within the incumbent supplier community to enhance the designing and engineering capabilities. The current supply chain and sourcing processes were evaluated to document minimum quality standards and capacity specifications that suppliers must comply with. Also, during the engagement, the experts explored the opportunities for supplier consolidation within the existing supply base.

Want to know how our customized surgical instruments industry analysis helped the client to identify potential suppliers within the existing supply base?

Get in touch with our experts now!   

Engagement Outcome 

The surgical Instruments industry report offered helped the client to identify low-cost suppliers within the existing supply base and reduce the costs of goods sold (COGS) by 27%. It also helped the client to evaluate other sources of manufacturers who provide cost-effective products, thereby optimizing the supply chain, increasing supplier value, and minimizing organizational spend.

Gaining accurate market insights and engaging with potential suppliers is crucial for companies in the surgical instruments industry to minimize the COGS. Request a free demo to access our web-based procurement platform and gain detailed insights. 

Procurement Best Practices in the Surgical Instruments Industry 

  • Create a surgical instruments inventory to ensure a fully stocked facility. 
  • Create a budget considering distributors, inventory turnover, and product quality. 
  • Identify suppliers who offer customized trays or sets for common procedures.
  • Ask quotes from multiple distributors and select who can keep up with your requirements.

To know in detail about the ways to procure surgical instruments at the right price levels, request more information for our experts.  

Industrial Machinery Market

Mapping Over 90% of Spend by Creating a Proprietary Procurement Model for a Company in the Specialty Retail Industry

Global Specialty Retail Industry Overview

Over the past few years, rapidly growing middle class, availability of trained manpower at a competitive cost, market-oriented stable economy, and well-developed credit and financing facilities have boosted the specialty retail industry. The industry is driven by broad macroeconomic variables rather than product-specific trends. Despite this, many specialty retail stores are facing increasing competition from e-commerce and departments, limiting gains from increased consumer spending.

Business Challenges Faced

Highly competitive specialty retail markets are characterized by faster and less expensive market products. To produce the right products in the right volumes at the right time, one of our clients headquartered in North America required a proprietary procurement operating model. The procurement team of the client delivered 1500 projects to source goods/services of more than 50,000 merchandise products (GFR) to customers across the globe. Not only this, but they also managed events to source non-merchandise goods/services (GNFR). However, as the diversity of their spend grew, the client required an agile process to address the uniqueness of non-merchandise spend.

Managing non-merchandise spend in the specialty retail industry requires an effective procurement operating model. Request a free proposal to access our tailor-made procurement market intelligence solutions.

Our Research Approach 

To cater to the specific requirements of the client, the procurement team at SpendEdge performed a specialty retail industry analysis. They recommended a procurement model that involved:

  • GNFR using a Centre-led model
  • GFR using a Centralized model

The number of suppliers in the GNFR was thrice the GFR supplier base. The center-led model required deep market knowledge of the specialty retail industry and the management of hundreds of sub-categories. With SpendEdge, the client gained greater transparency within the procurement process. Our market expertise created the opportunity for continual process improvement. Additionally, specific category alignment enabled the client to fine-tune projects to suit each spend category. The centralized model helped the client to analyze factors such as lead time, shipping time, rebate, product quality and move towards a “value” auction model. This helped the client to get the best possible terms during every purchase.

Wondering how you can shift from the “price” auction model to the “value” auction model and improve the procurement process.

Reach out to our experts for customized specialty retail industry report.  

Engagement Outcome 

The comprehensive insights into the specialty retail industry helped the client to map over 90% of their spend and utilize real category management to track all upcoming exposures. Also, the proprietary procurement model created a streamlined process and resulted in new opportunities, enabling the client to increase spend under management by 35% in six months.

Gaining accurate market insights is crucial to streamline processes and increase spend under management. Request a free demo to access our web-based procurement platform and gain detailed insights. 

Key Trends That Will Redefine Specialty Retail Industry in 2019 

  • Changing preferences of millennials will require companies to engage consumers outside traditional shopping parameters and become cultural figures.
  • The number of times people who are willing to wait for free shipping has dropped significantly. Companies in the specialty retail industry will have to evaluate new ways to differentiate themselves.
  • Consumers are seeking a more engaging experience. This will require specialty retail brands to add layers and new experiences to their traditional retail models.

To know in detail the factors impacting the specialty retail industry, request more information for our experts.  

natural gas

Minimizing Requesting Budget Estimates by 30% and Improving the Supply Process for a Natural Gas Company in the US

US Natural Gas Industry Overview

The US natural gas industry is witnessing a surge in production. The shale revolution started in 2008 has not just transformed the domestic energy outlook but also energy markets around the world. However, the price collapse from 2014 to 2017 has forced companies in the US natural gas industry to cut costs to survive. They are looking for ways to reduce dependence on riskier suppliers and identify strategic suppliers to ensure sooth supply process. 

Business Challenges Faced 

Rising competition in the US natural gas industry has pushed procurement teams for price reduction from suppliers. The client, a specialist subcontractor was facing heavy price competition in their established markets. They were looking to expand their value chain. As a part of company strategy, they started tendering for EPC projects. However, they failed to acquire the projects. A lack of control over subcontractors was considered as the prime reason for difficulties with the project supply. High proposal price variations and virtually no compliance to the requirements in the RFQs were few other factors contributing to the failure. The client, therefore, felt the need to collaborate with SpendEdge to address issues in the supply process.  

Inability to gain supplier insights can impact the supply process for companies in the natural gas industry. Request a free proposal to access our tailor-made solutions and US natural gas industry statistics. 

Our Research Approach 

The experts at SpendEdge performed a comprehensive natural gas industry analysis to address the requirements of the client. This provided insights into the industry best practices and showed that main contractors were gaining contracts at better prices. The client on the other hand had no established relationships with strategic suppliers, thereby resulting in higher prices and lower quality procurement scopes.

The team then recommended supply of strategic and bottleneck items by building supplier relationships. They provided insights into potential suppliers and their cost structures. This enabled the client to aggregate purchases across the entire portfolio and gain bigger volume discounts. Onerous terms were avoided from contracts on price or other purchasing terms and the key areas were identified where the company and suppliers could cooperate to realize joint savings. A joint action plan including negotiations with their largest suppliers and running a sourcing program for the largest and most expensive categories was developed to renegotiate important contracts.

Want to know how our customized US natural gas industry analysis helped the client to potential suppliers and strengthen relationship with them?

Get in touch with our experts now!   

Engagement Outcome

Engaging with suppliers helped the company to secure supply in the natural gas industry. This minimized requesting budget estimates by 30%. Insights gained also helped the client to strive for highest possible quality in RFQs, tailor these towards supplier core competencies, and win 5 contracts in a span of one month.  

Identifying strategic suppliers is crucial for companies in the US natural gas industry to improve the contracting process. Request free access to our web-based procurement platform to keep up with the latest market insights. 

Factors Influencing the Natural Gas Industry Growth

natural gasTo know in detail about the natural gas industry trends and growth, request more information for our experts.  

market intelligence

Supply Market Intelligence Helped a Processed Foods Manufacturer to Address Commodity-price Volatility and Save $15 Million

Processed Foods Industry Overview 

Over 50 percent of the American diet consists of highly processed food items. The industry loosely tracks underlying demographic trends such as income growth and population and generates revenue from the sale of food to a whole host of consumers. It has proved its ability by delivering positive investment returns consistently. In fact, over the past few years, the processed foods industry in the US has delivered high single-digit annual total returns with much less volatility than the broader market indexes.  

Business Challenges Faced

Rising competition from private label companies and value-conscious purchasing from consumers was creating downward pressure on prices of processed food items. The manufacturer was finding it hard to keep up with new trends, demand volatility, portfolio complexity, and development costs. Raw material prices which accounted for over 70% of direct material costs were becoming more volatile and impacting the major operations of the company. The client, therefore, decided to collaborate with SpendEdge to perform supply market intelligence study and gain real-time insights to address increasing volatility and improve the competitiveness of their organization. 

Want to know how our market intelligence solutions can help you gain real-time insights and make informed sourcing decisions? Request a free proposal and we will get back to you with customized supply market intelligence solutions.  

Our Research Approach 

To address this situation, the experts conducted a comprehensive supply market intelligence study, that provided insights into core elements of market trends, commodity pricing, global capacity, government and regulatory norms impacting the sourcing process. They also offered insights into economic trends that could impact the organization’s supply chain. 

With the help of supply market intelligence report and insights, the client determined the best framework for strategic, leverage, routine and bottleneck categories. Data coupled with market insights enabled the client to integrate cost modeling as a key capability within supply market intelligence. This provided input to budgeting activities and supplier switching decisions. SpendEdge’s recommendation to utilize supply market intelligence throughout the sourcing lifecycle also enabled the client to gain valuable insights at various stages of sourcing including strategy development, supplier identification, negotiation and contracting. This promoted a greater understanding of the supply market and helped them gain a competitive advantage.  

Wondering how leveraging supply market intelligence services can help you understand category markets and stay ahead of the curve?

Reach out to our experts for an immediate response.    

Engagement Outcome  

The supply market intelligence solution offered helped the client to reduce exposure to commodity-price volatility and save $15 million in a span of three months. It also enabled the client to look beyond their direct suppliers and build up their understanding of the role of different players across the whole value chain.

A comprehensive supply market intelligence study is crucial for companies to minimize exposure to commodity price volatility and reduce costs. Subscribe now to access accurate supply market insights from our procurement experts. 

Importance of Supply Market Intelligence 

  • Enables companies to understand the market in which the supplier operates. 
  • Reduces risk-intensive events involving suppliers and markets. 
  • Forecasts global price levels, market trends, supplier quality, and delivery.
  • Identifies key resources needed to vet for quality and accuracy.

To know how supply market intelligence can help your organization gain a competitive edge, request for more information from our analysts.

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