LONDON: SpendEdge, a leading provider of procurement market intelligence solutions, has announced the completion of their latest success stories on the relevance of strategic sourcing and category management for different categories.
The introduction of big retailers in the food industry is compelling companies to revamp their business models to maintain competitive differentiation. The client, a North American food company was looking to develop product supply strategies to cut costs effectively. They required an effective strategic sourcing and category management strategy to break from current paradigms.
SpendEdge’s comprehensive insights coupled with activity-based costing facilitated the client to improve the strategic sourcing and category management process and defend category sales. As a result, the client achieved over $80 million in revenues.
“Leveraging strategic sourcing and category management solution is crucial for businesses to align sourcing goals with organizational strategies while leveraging targeted expenditures and maximizing value,” says Srinivas R, Procurement Manager at SpendEdge.
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Stagnating mass market and fragmented niches of growth were impacting the market dominance of a CPG company in Europe. Optimizing pricing and improving profitability became an arduous task for them. The client, then collaborated with SpendEdge to identify key value categories (KVCs) and key value items (KVIs) to increase sales.
Our experts analyzed the frequency of purchase and share of category sales for items in the KVCs. They calculated price awareness score and identified KVIs that accounted for 10%-15% of sales in the category. With improved strategic sourcing and category management, the client increased its profit margins by 11%.
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Integrating innovations and streamlining operations are a few of the key strategies adopted by companies to survive in the medical devices market. A fast-growing company in the US wanted to identify the typical levers to augment the incremental value of the organization. They wanted to better understand the medical consumables category to boost growth prospects.
With our strategic sourcing and category management solutions, the client analyzed alternative mechanisms to verify current pricing against alternative suppliers and implemented an 8 step category management process. This facilitated the client to achieve an incremental cost reduction of 2-3 %.