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Minimizing Risks and Reducing End-to-end Supply Chain Costs for an Automotive Company

Automotive Industry Analysis

The automotive industry plays an important role in maintaining the economic health of European countries. The turnover generated by the industry accounts for almost 7% of the EU’s GDP. However, despite the market witnessing promising growth, companies in the automotive industry need to redesign their supply chain strategies to prepare themselves for any unforeseen risks and transformations.  

Business Challenges Faced

The client – a leading original equipment manufacturer (OEM) in the automotive industry – wanted to identify potential opportunities and risks in the supply chain amid wrenching changes in global economies. They wanted to gain in-depth insights into the supply trends impacting operations in the European market. The client, therefore, approached SpendEdge to leverage its expertise in offering supply side risk assessment solutions to better understand the current structure of the supply chain and devise effective supply chain strategies. 

Key objectives the client aimed to achieve through this supply side risk assessment were:  

  • Mitigate chances of supply failure occurring due to supplier or logistics delays.
  • Reduce the possibilities of outturn costs being higher than the anticipated costs.
  • Minimize risks associated with quality failure, product failure, and latent defects impacting auto sales growth.


Minimizing Inventory Costs and Optimizing Cash Flow for an Automotive Industry Client – SpendEdge’s Supply and Demand Forecasting Engagement

The client is a leading automotive market player, established in the US. They employ over 6,500 people.

Predicaments Faced 

Being a new market player, the automotive industry client wanted to leverage SpendEdge’s supply and demand forecasting strategy in their pricing and procurement decision making. The automotive industry company was also looking at adopting a process to balance out the irregularities in the supply and demand curve. They also wanted to ensure that their products are produced at the right time and delivered seamlessly. Moreover, with the help of SpendEdge’s supply and demand forecasting solution, the client wanted to coordinate the planning and marketing process to reduce inconsistency and address issues pertaining to operational inefficiencies and missed opportunities.


4 Ways to Improve Supply Chain and Procurement in the Automotive Industry

Today, the automotive industry is one of the most rapidly growing industries globally. Furthermore, being the most innovative sector, a fierce competition is at the core of the automotive industry. In fact, it would not be wrong to say that the success of both the manufacturers and the suppliers in the automotive industry is completely dependent on their collaborative behavior against the need of the customer. One of the most common issues currently impacting the automotive industry supply base is keeping up with the growing volumes, which has resulted in shortages in supply. Aiming at the outcomes, a competitive supply chain capability not only assures the delivery of component material on-time but also the execution of inbound supply to guarantee the shipment of quality finished goods at a competitive price. Therefore, improving procurement and supply chain process in the automotive industry is a significant challenge as well as an opportunity today. So, in this article, we have discussed a few very important ways to boost the supply chain and procurement which in turn can result in improved cost savings as well as better customer experiences in the automotive sector.


PESTLE Analysis and Recommendations on the Automotive Industry

About the Client 

The client is one of the largest automotive company in the world. The organization has mechanically superior assembling offices across the US, in addition to planning, research, and testing grounds in Central America.

Business Challenge

The client, a global leader in the automotive sector wanted to leverage PESTLE analysis to analyze the global automotive landscape. The company was facing challenges in making use of profitable opportunities due to changes in external factors. The client needed to be prepared for possible threats, which arises from time to time due to external factors.

Our Findings

With the solutions recommended by a team of PESTLE analysis specialists at SpendEdge, the client was able to make use of profitable opportunities and anticipated all the future difficulties and took actions to avoid their effects. The PESTLE analysis provided the client with a better understanding of the wider business environment and supported the company to spot business opportunities and employ them successfully.

SpendEdge has been serving clients across various industries for more than 15 years with the best-in-class procurement and supply market intelligence solutions to drive sourcing and procurement excellence. Our procurement market intelligence solutions have helped procurement and sourcing professionals from the top Fortune 500 companies to gain actionable insights for better decision making. Request a free proposal below to know more about our procurement services.

What is PESTLE Analysis?

PESTLE analysis, which is sometimes referred to as PEST analysis, is a theory in marketing principles, which is used as a tool by businesses to track the environmental factors that have an impact on an organization. Its expanded form signifies P for Political, E for Economic, S for Social, T for Technological, L for Legal and E for Environmental. Businesses that strongly monitor and respond to changes in the macro-environment are able to differentiate from the competition and build a competitive advantage.

We offer customized procurement market intelligence solutions as well as a subscription to ready-to-use market intelligence reports to help sourcing and procurement stakeholders make informed business decisions. We also help enterprises to reduce the time spent on analysis and curating information so that more time can be devoted to strategic sourcing and cost reduction. Request a free demo to gain better insights. 

How to do a PESTLE Analysis?

While industry factors have a vital influence on the performance of a company, there are a number of external factors that also play an essential role in how successful a business can be. So, how do you determine what role these factors are performing in your business? Well, this is where PESTLE analysis comes in performance and enables you to take a look at the external factors.

  • Understand PESTLE factors – For a business to perform a proper PESTLE analysis, first it’s essential to understand each factor.
  • Gather relevant data – The second step is, gathering data about the external environment of your business.
  • Identify opportunities – As you gather all the data, it’s now time to identify the opportunities.
  • Identify threats – Identify all the risks and try to eliminate the risks.
  • Take action – After you have identified opportunities, it’s time to incorporate the opportunities in your business.

Want to gain more insights on PESTLE analysis? Get in touch with us now!


Promoting Luxury Cars Sales Through Supply Market Intelligence: An Automotive Industry Case Study by SpendEdge

Engagement Overview:

The client, a pioneer in the luxury cars segment in the southern United States, was seeking detailed insights into the automotive industry’s supply market scenario. The luxury cars client was looking at leveraging supply market intelligence to promote sales and gain a competitive edge. To identify and focus on key strategies that drive sales, the automotive industry player approached SpendEdge to help them leverage its strong expertise in supply market intelligence to address the challenges in their supply network.request proposal

The supply market intelligence engagement entailed the use of a detailed quantitative analysis of various categories within the supply chain to identify and benchmark the best strategies to be adopted.

About the Client:

A multinational automotive industry firm specializing in the manufacturing and sales of high-end luxury cars.

Business Challenge:

The complicated nature of the automotive industry was compelling the luxury cars manufacturer to enhance their strategies to drive sales. Also, factors such as market dynamism and the ongoing industrial transformations posed several new challenges, which accelerated the need for a major transformation in their overall supply chain strategies.request proposal

To overcome such challenges and achieve multifunctional synergies across their global supply network, the luxury cars client wanted to leverage supply market intelligence.

How did SpendEdge Help the Client?

  • Step 1: Scrutinizing relevant supply market data

The initial step revolved around the collection and analysis of supply market data to develop precise procurement strategies. This step included a detailed analysis of all the essential supply chain principles and elements required to build an efficient supply chain strategy which, in turn, enhanced their organizational performance to boost profitability.

  • Step 2: Understanding the structure of the global market

A pre-requisite to any supply market intelligence assessment is to have a clear understanding of the commodity and its global market landscape. This helps businesses identify factors affecting their market growth. Detailed insights into the global supply market scenario also enabled the luxury cars client to identify the key market players and classify them based on their market size.

  • Step 3: A tactical three-step supply market intelligence-based approach to drive business growth

The strategic approach helped the luxury cars manufacturer to devise effective strategies to enhance brand value, market presence, supply chain efficiency, and drive sales across their business units. It also enabled the client to analyze their business objectives, devise a commodity profile, examine cost structures, increase ROI, and improve market shares.

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Key questions answered in this supply market intelligence engagement include:

luxury cars

Benefits of the Engagement:

The supply market intelligence solutions offered by our experts helped the luxury cars client to fine-tune their supply chain strategies to drive maximum sales. Our experts worked as an extension of the automotive firm to identify the success factors that uncovered major growth opportunities within the automotive industry.

Why is Supply Market Intelligence the ‘Need of the Hour’?

It is essential to possess the right ‘market intelligence’ at the right time even if the process deals with procurement related decision making. Access to timely and precise supply market intelligence offers a huge strategic advantage for businesses across industries. However, not having access to accurate supply market intelligence makes firms vulnerable to supply chain risks.

The growing competitive pressure in today’s automotive industry poses major challenges for players in terms tackling supply chain risks. This demands the need for developing a strong and efficient supply network, which will help improve organizational performance. To do so, and to achieve their long-term procurement goals, organizations are now approaching SpendEdge to leverage its expertise in supply market intelligence and to succeed in a hyper-competitive environment.

Our Findings:

This engagement points out to the fact that supply market intelligence is an essential success factor, which enables an organization to achieve strategic business goals. The strategic use of market intelligence paves way for enterprises to tackle the ever-increasing procurement challenges.

Just like our luxury cars client, if your organization is also on the lookout for an objective way to drive sales, SpendEdge’s supply market intelligence solutions will help you do so by being your roadmap to success. So, wait no more! Go ahead and get in touch with our automotive industry experts to build the capability required to gain a competitive advantage.

To know more about our supply market intelligence solutions for automotive industry players

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Spend Pattern Analysis for a Leading Player in the Automotive HVAC Market – A SpendEdge Case Study

Engagement Overview:

A leading automotive industry client specializing in the manufacture of automotive HVAC systems wanted to analyze their spending patterns to identify long-term cost-saving opportunities. To enhance the spend visibility and efficiency, the automotive industry client was looking at leveraging our spend analysis solutions.  A detailed quantitative analysis of various categories within the supply chain was carried out to analyze spend patterns and develop an effective spend management framework.

About the Client:

The client is a leading player in the automotive industry, specializing in the production of automotive HVAC systems that request proposal are supplied to leading automobile manufacturers across the globe.

Business Challenge:

The automotive industry client was facing challenges in devising an appropriate spend management framework.

How did SpendEdge Help the Client?

  • Step 1: Collection of spend data

The first step revolved around the collection of spend data from several sources across the organization’s supply network.

  • Step 2: Categorization and standardization of collected data

Once the spend data is collected, it is necessary to analyze the data so that it can be categorized into subsegments. Categorizing data into meaningful subsegments helps identify the source of spend. Also, identifying opportunities to standardize the spend helps uncover several newer cost saving opportunities.

  • Step 3: Development of a spend management framework

The spend analysis experts at SpendEdge devised a three-step spend management approach that helped the automotive industry client to gain a holistic view of the spend pattern across their supply chain.

Key questions answered in this spend analysis engagement include:

Automotive Industry

Benefits of the Engagement:

The spend analysis solution offered by our experts helped the automotive HVAC manufacturer gain an overview of their spend patterns across their global supply network. Our solutions also assisted the automotive industry client in devising an appropriate spend management framework that helped them detect, gauge, and assess indirect and direct spend.

Why incorporate spend analysis based solutions?

Spend analysis has emerged as an effective solution to enhance savings and drive profitability in today’s increasingly competitive business environment. It involves the collection and categorization of spend data acquired from several disparate sources.

Also, spend analysis helps in the identification of new opportunities, thereby impacting the bottom line across industries. And with companies increasingly vying for new market opportunities, spend analysis turns out to be an essential factor that helps them remain competitive.

Our Findings:

Analyzing spend patterns to identify savings opportunities seems to be a daunting task for several organizations. However, detailed spend analysis can help identify significant savings opportunities. But to develop a robust spend management framework, different aspects of the procurement spend need to be examined in detail. Moreover, implementing a spend analysis assessment as the main aspect of your business strategy helps enhance overall business value by uncovering various market opportunities.

To know more about our spend analysis solutions

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Top Automotive Electronics Companies Dominating the Market in 2018

Globally, the automotive industry is witnessing promising growth, driven by the dire need to transform the driving experience for end-users. SpendEdge’s procurement report on the automotive electronics market shows that electric cars are the new trend in the market and governments across the globe are contributing towards this growth by offering tax benefits. The recent acquisition of automotive electronics companies by major semiconductor giants highlights the appetite that large semiconductor companies have for this market. For most automotive electronics companies, this presents a huge opportunity for business development and expansion. However, they do have to focus a lot on product quality and ensure that the electronics components are reliable. This recent change in the focus of automotive electronics companies will impact the supply chain of materials.

Though the industry is characterized by the presence of various small and large automotive electronics companies, here are some of the key suppliers who will dominate the market this year:

  • Bosch

Founded in 1886, Bosch is one of the world’s most renowned automotive electronics companies. They have branches in over 150 countries and employ more than 400,000 employees around the globe. Apart from developing electronics for cars, Bosch also specializes in manufacturing electrical equipment and supplies.Get Free Sample_SE

  • BASF

Their product portfolio ranges from high-performance coatings, fuel additives, and plastics to chemicals, battery materials, and brake fluids. They are one of the world’s leading automotive electronics companies who specializes in developing products with higher power output and lower emissions.

Achieving Organizational Objectives With the Aid of Industry Best Practices Benchmarking Study

Overview of the global auto parts market

The global automotive industry is experiencing rapid technological transformations, thanks to disruptive innovations that are driving these changes. Several new markets have opened up growth avenues and new market trends have paved their way to success. What’s even more interesting is that the convergence between auto manufacturers and technical solution providers is blurring industry lines and expanding the bounds of the traditional automotive industry.

 “Improvements in competitive pricing, product quality, and development of new automotive models will assist auto parts manufacturers to perk up the competition.”

Considering the fast-paced automotive environment and technological innovations that take place on a daily basis, business models and industries are subjected to rapid disruptions and transformations. However, such factors alone do not determine the risk mitigating ability of companies in the auto parts manufacturing space.

In addition, as the views of consumers evolve from an ownership-centric outlook to a service-centric mindset, the supply chain will be at the core of this transformation. Companies will have to adapt and incorporate specific supply chain strategies to gain a stronger foothold. In the midst of these factors, enhancing market share, developing industry benchmarks, and complyingrequest proposal with regulation becomes a major concern for the manufacturers of auto parts.

The Business Challenge and Journey

Client background: A fortune 500 multinational corporation, the client is a leading player in the automotive industry, specializing in the production of auto parts and a multitude of auto components. Headquartered in the United States, the company employs over 70,000 employees while providing services to customers in over 30 countries.

  • Client issue: The biggest concern of the client was to enhance the efficiency of their business operations, by comparing their business plans with the industry best practices.
  • Client journey: The client gained a better understanding of the automotive industry benchmarks, major risk factors, supplier negotiation strategies, industry standards, and expectations. They also implemented industry best practices across the supply chain and improved internal benchmarking to enhance performance in different departments. The solution offered touched upon various aspects of the auto parts industry – industry standards, supply forecasting, demand forecasting, material procurement, product quality engineering, value product engineering, logistics, and sourcing strategies.

Research methodology: To help the client identify the industry best practices and set benchmarks to drive strategic value across their supply chain, the industry best practices experts at SpendEdge devised an integrated research approach. The approach included primary research coupled with qualitative and quantitative data collection methodologies. The experts also congregated information from a wide array of secondary sources such as paid, company presentations, industry forums, and industry database within the automotive industry space.

What is industry best practices benchmarking?

Industry best practices benchmarking is the process of identifying and evaluating the best practices to be adopted by companies in a particular sector. Organizations operating in different sectors can leverage industry best practices to enhance the efficacy of their overall operations.

Moreover, the process of benchmarking industry best practices involves identifying problem areas and comparing them to the best practices in the industry and implement the necessary changes. Also, organizations that have successfully implemented a system for benchmarking and best practices report significant savings and improved performance.

Key questions answered in this industry best practices benchmarking study include:

Industry Best Practices

The Results

The auto parts manufacturer achieved their organizational objectives and managed to expand their supply chain operations. This was made possible by identifying the best practices for sustainability in the auto parts industry and by comparing their performance with that of their competitors. Additionally, they leveraged internal benchmarking to enhance performance in different departments. 

With the emergence of autonomous vehicles and growing popularity of the connected cars revolution, the automotive industry is set to undergo drastic transformations in the next few years. This makes it all the more essential for auto parts manufacturers to enhance topline growth strategies while developing new sustainable practices to improve cost efficiency and profitability. Therefore, it is evident that those who deploy supply chain transformation strategies now will be in a better position to succeed in the future.

To know more about our industry best practices benchmarking solutions
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