Tag: procurement best practises

Outsourcing services

Increasing Consumption of Alcoholic Beverages Driving the Demand for Glass Bottles and Containers

SpendEdge Procurement Market Intelligence InfographicsLondon, Feb 27, 2018: Increasing consumption of alcoholic beverages such as wine and beer across the globe, especially in regions such as APAC and South America, consequently contributes to the demand for glass bottles and containers for packaging, as they facilitate high designing capabilities for the buyers. Additionally, the rise in demand from the cosmetics and perfumes industry is also driving the demand in the global glass bottles and containers market.

SpendEdge’s latest procurement research report on the global glass bottles and containers market offers an in-depth assessment of the crucial factors influencing the supply market, strategic procurement and sourcing decisions, pricing models, and procurement best practices. The report, a part of the packaging and labeling, also offers detailed insights into the supply chain management, key market developments, and demand-supply shifts to help sourcing and procurement experts make smart procurement decisions.

“Glass bottles and containers are one the most preferred materials for packaging across end-user industries as they are 100% recyclable. The growing stringency of regulations in packaging from regulatory bodies has shifted the focus of buyers towards glass bottles and containers as a packaging option.” – Bhuvaneshwari Udayakumar, packaging and labeling expert at SpendEdge.

Buyers in the industry face challenges with standardization of products in terms of quality across their production hubs due to variance in raw materials and cullet quality and testing capability of the personnel. As a result, buyers face procurement challenge in labeling and packaging of substances. Also, improper quality of bottles and containers may affect the shelf life of product stored and lead to losses for buyers.

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This procurement report on the glass bottles and containers market offers insights on:

  • Supply markets, growth drivers, trends, and imminent restraints
  • Key suppliers and assessment of their capabilities
  • Procurement best practices
  • Negotiation strategies and cost-saving opportunities
  • Pricing models and category innovations
  • For a comprehensive, detailed list, view our full report

Get unlimited access to all our reports. Get access to our reports to gain insights, platform ready-to-use procurement research reports, latest supplier news, innovation landscape, markets insights, supplier tracking, and much more at the click of a button. Request a free demo now


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Top Procurement Challenges Hindering the Growth of the Global Spice Market

Spices are widely used to flavor, preserve, or color the food. The earliest spice trade was estimated to be carried out at around 2000 BCE throughout South Asia and the Middle East where cinnamon and black pepper trade were carried out. Although early uses for spices were connected with magic, religion, tradition, medicine, and preservation, today it is widely used in food preparations. Spices serve several purposes in cooking and are widely used to add flavor and aroma and enhance the taste and color of food. Additionally, spices also display antimicrobial and anti-inflammatory properties and are also rich in anti-oxidants. Today, India accounts for 75% of the total production in the global spice market. Growing popularity of Asian cuisines in regions such as Europe and North America due to increasing Asian immigrant population is speculated to be the major growth driver in the global spice market. Although the growth prospects look bright for players in the global spice market, they face numerous procurement challenges when it comes to establishing themselves in the market.

Procurement challenges in the global spice market

Clove market

  • Cloves are usually adulterated with materials such as exhausted cloves, mother cloves, brown cloves, or stems for economic gains. Such type of food fraud is quite common in the global spice market. Thereby, it is essential for the buyers to make sure suppliers comply with necessary
  • The clove market is facing challenging times in terms of increasing production and labor cost. Low investment in technology and migration of skilled labor is the primary reason for such increasing costs. The widening gap between demand and supply including the increasing costs is causing problems for the players in the global spice market.
  • Clove suppliers usually source raw material from small farmers. As a result, there’s a high chance that raw materials may not pass the minimum quality standards resulting in the processing of low-quality cloves.
  • Traces of pesticides and contaminants found in the cloves is causing major procurement issues for the buyers in this market. These pesticides are found as a result of usage in the farming process to achieve better yields. It is essential to use various techniques to detect and remove any traces of pesticides or chemicals.

CTA view full reportRequest Free SampleCardamom market

  • The quality of cardamom greatly differs as buyers procure from multiple suppliers. Additionally, soil fertility, organic matter content, and climatic condition also affects the final product quality. To ensure consistent product quality, buyers should evaluate suppliers based on their track performance, supply chain capabilities, and backward integration efficiency.
  • Buyers in the cardamom spice market often expect timely delivery of products. However, it is not always possible to ensure on-time delivery due to demand-supply dynamics and climatic conditions. Delays in the delivery of raw material can significantly affect supplier’s time-to-market of the final product.
  • Identifying the origin and authenticity of the cardamom variety is often a challenging task in the spice market. As a result, suppliers face difficulty in upholding the brand trust. To assess the product origin and authenticity, suppliers are implementing comprehensive identification and tracking systems throughout the supply chain of cardamom.

CTA view full reportRequest Free SampleBlack pepper market

  • Companies usually have a huge demand for black pepper, which is fulfilled by sourcing from multiple locations and nations. However, they face difficulty in sourcing similar quality of black pepper across the nations because of differences in the extraction and manufacturing process. To tackle such issues, it is advisable that buyers engage with suppliers with worldwide presence who standardize their manufacturing process.
  • A few suppliers engage in the practice of diluting black pepper to increase its value. They do so by adding inferior or less desirable elements like mineral oil, papaya seeds, and sawdust. For instance, replacing even 10% of black pepper with papaya seeds can result in substantial profits for the suppliers. As a result, buyers should conduct a proper risk assessment to prevent adulterated materials from entering the food chain.

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Recent Developments in the Global Agrochemicals Market

In modern farming, agrochemicals are extensively used to neutralize the soil, enhance crop yield, protect crops against pests, and increase plant growth. Various types of agrochemicals are available in the market including herbicides, insecticides, fungicides, and seed treatment chemicals. The first uses of agrochemicals can be traced back to 4500 years when Sumerians used sulfur compounds as insecticides. The demand for agrochemicals is on the rise as the availability of arable land is limited to feed the growing world population. Suitable agrochemicals are thereby used to maximize the use of agricultural land. The recent procurement market intelligence report from SpendEdge on the global agrochemicals market estimates the market to be worth $52.2 billion.

Request Free SampleTrends in the agrochemical market

Increase in restructuring efforts

There is an increasing trend of restructuring efforts in the agrochemical market as leading players strive to obtain the market leader position and expand their product portfolio. The restructuring efforts have also been helped by increasing regulatory complexity, low ROI on R&D investment, and tough market conditions. For instance, market leaders, Dow Chemicals, and DuPont announced their merger in 2015 and completed the activity in 2017. The combined entity would create an agribusiness portfolio that is worth more than US$17 billion. It also helps the buyers in the market as they can purchase all their requirements from one single vendor.

Development of insect-control traits

One of the major concern for agrochemical manufacturers is developing chemicals which effectively tackle insects and other pests, so they cant damage the crop. The agrochemical market is experiencing a renewed interest in insect-control traits as they are researching on new compounds, screening and testing these for active ingredients, and developing them in conjunction with other substances, to make them more viable. For instance, in September 2016, DuPont Pioneer researchers discovered a protein from a non-bacillus thuringiensis bacterium source, which demonstrated an alternative method for controlling corn rootworm in North America and Europe. This can effectively save millions of corn crops that cause significant economic loss to the farmers.

Adoption of precision farming

As farmers face difficulty growing certain types of crops in a given condition with limited resources, it becomes important that scarce natural resources are effectively used to produce more using less. The rapid development of technology in agriculture has resulted in the adoption of various new agricultural practices such as precision farming, stereoscopic agriculture, and ecological agriculture. Among these methods, precision farming is expected to gain prominence as it helps farmers in cultivating crops in all types of soil environments. The advent of GPS and GNSS enables farmers to locate their precise position in a field to create maps to measure variables such as crop yield, terrain, topography, organic matter content, nitrogen levels, and moisture levels.

New regulations

Although agrochemicals play a vital role in increasing the crop yield, it presents its set of side-effects and can sometimes be harmful to the humans or the environment. As a result, government bodies place regulations in the manufacturing and use of such agrochemical. Currently, however, the market has seen an increase in regulations that can significantly hamper the introduction of new products as well as increase the costs of developing an agrochemical. For instance, in 2016, EFSA announced neonicotinoid assessments to be reviewed at the beginning of 2017. France in June 2016 announced that neonicotinoid insecticides would be banned from 2018. This is because the chemical is highly toxic to the bee population as it impacts their ability to forage, learn and remember navigation routes to and from food sources.

Read more about the trends in the agrochemicals market along with supply market insights, procurement best practices, category management, and pricing insights in SpendEdge’s upcoming report on the global agrochemicals market.
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Illegal supply chain of vanilla causing procurement problems for end-users in the global vanilla market

Vanilla Market

London, Jan 16, 2018: Vanilla is one of the main ingredients used in the manufacturing of bakery and confectionery products. The consumption of vanilla-based products such as bakery, confectionery, beverages, and other food-based products is high across North America. However, Europe remains one of the largest consumers of vanilla products in the global vanilla market.

SpendEdge’s latest procurement research report on the global vanilla market offers an in-depth assessment of the crucial factors influencing the supply market, strategic procurement and sourcing decisions, pricing models, and procurement best practices. The report, a part of the agro commodities and raw materials portfolio, also offers detailed insights into the supply chain management, key market developments, and demand-supply shifts to help sourcing and procurement experts make smart procurement decisions.

 Suppliers focus on positioning themselves as clean label brands because of the increasing demand by end-consumers for total transparency across the supply chain of vanilla products is driving the growth of the global vanilla market. – A Kowshik, agro commodities and raw materials procurement research specialist at SpendEdge.

The vanilla market, especially in regions with an unorganized market, is prone to have the presence of illegal supply chain of adulterated vanilla. Many traders and processors in the global vanilla market are indulging in adulteration practices of adding chemicals that are not easily traceable due to a shortage in the supply of vanilla beans, impacting the health of end-consumers thereby presenting some major procurement problems for the buyers.

Need more insights on this report?

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This procurement report on the vanilla market offers insights on:

  • Supply markets, growth drivers, trends, and imminent restraints
  • Key suppliers and assessment of their capabilities
  • Procurement best practices
  • Negotiation strategies and cost-saving opportunities
  • Pricing models and category innovations
  • For a comprehensive, detailed list, view our full report

Get unlimited access to all our reports. Our Insights platform ready-to-use procurement research reports, latest supplier news, innovation landscape, markets insights, supplier tracking, and much more at the click of a button. Request a free demo now


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The Complexities in the Procurement of Butane Gas

Butane, an organic compound of hydrogen and carbon, remains in a gas form at room temperature and atmospheric pressure. Butane gas has a wide range of application but is mainly used as the primary gas compound in LPG cylinders. The increasing applications of LPG cylinders in cooking equipment, heating appliances, and vehicles are contributing to the growth of butane gas market.  Apart from its use in LPG cylinders, butane is used as a chemical feedstock to manufacture ethylene and butadiene, a key ingredient of synthetic rubber. The recent report from SpendEdge attributes high level of adoption of LPG as a domestic fuel in APAC and Africa as a major growth driver. Although there seem to be lucrative growth prospects in the butane gas market, butane gas manufacturers are facing various logistics and supply chain issues, including difficulty in the procurement of butane gas.Request Free Sample

Major Procurement Pain Points in the Butane Gas Market

Complexity in Monitoring Suppliers’ Compliance with Labor Laws

The buyers need to constantly monitor supplier’s compliance with labor laws and international standards regarding workplace conditions, as violations of such laws exhibit negligence in supplier evaluations from the buyer’s part. Such negligence could impose hefty fines and penalties to the buyer. Consequently, buyers will have to bear additional procurement costs to conduct periodic audits of supplier’s facilities to ensure compliance with labor laws. Major butane suppliers usually hire EHS consultants to carry out such audits.

Fluctuations in Butane Prices

The variation in demand and supply of butane alongside volatility in crude oil prices are contributing to the price fluctuation of butane gas. The buyers are facing difficulty in estimating their procurement budgets as the prices for butane differ in summer and winter season. The price difference is because of the changing nature of demand from automotive fuel suppliers as they change between summer-grade gasoline and winter-grade gasoline. Butane manufacturers usually include a clause for renegotiation in SLAs in case of price fluctuations to offset the changes.

Sourcing Limitations due to Import Duties

The government of several countries including Nigeria, China, and India levy import duties on butane in order to promote the consumption of domestically produced products. However, due to demand and supply imbalances or inefficiencies across the value chain of domestic players, the prices for butane usually falls on the higher side. For instance, although the price of butane is high in Nigeria due to process inefficiencies and inflation, they cannot import butane from other regions due to exorbitantly high import duties. To tackle with this procurement challenge, buyers evaluate countries where bilateral treaties are in place, which allows them to import the product by paying lower duties.

 

Read more about the top procurement challenges in the butane gas market along with sourcing strategy, cost modeling, strategic purchasing, pricing trends, and procurement best practices in SpendEdge’s upcoming report on the global butane market.

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Industry Best Practices Benchmarking Study helps Disposable Syringes Manufacturer Formulate Better Negotiation Strategies

Category Overview

Lately, the pharmaceutical industry has witnessed astonishing growth due to the increase in the demand for long-acting formulations and devices with lower adverse effects and high efficacy. According to our industry best practices specialists, it has been noted that the pharmaceutical industry is facing substantial operational and economic challenges. As a result, many pharmaceutical firms have started adopting industry best practices studies to make the most of the opportunities and gain a stronger foothold this market space.

The industry best practices benchmarking studies offered by SpendEdge help pharmaceutical industry players adopt best-in-class procurement and sourcing strategies.

The Procurement Pain Point and Insights Offered

A leading pharmaceutical industry player wanted to identify peer group companies and their key suppliers. Additionally, the client also wanted to cut down costs by implementing a best-in-class and efficient procurement process. Furthermore, they also wanted to assess their peer group company’s success stories and approach towards innovation.request free proposal

The industry best practices specialists at SpendEdge carried out a blended research methodology, which included primary and secondary research coupled with qualitative and quantitative data collection methodologies to cater to the specific category requirements of the client.

During the course of this industry best practices benchmarking study, the pharmaceutical industry client specializing in disposable syringes was provided with a list of the peer group companies and their key suppliers. The list provided helped the client identify the key drivers to enhance their procurement process. Additionally, the client was also able to optimize their techniques and implement an efficient procurement process.

Key questions answered in this industry best practices study include

pharmaceutical industryBusiness Outcome

This industry best practices benchmarking study helped the pharmaceutical industry client implement best-in-class procurement and sourcing strategies. Additionally, the client was able to formulate a better negotiation strategy with their suppliers. As a result, the leading pharmaceutical industry player specializing in disposable syringes was able to cut down their overall costs.

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Sourcing of Pharmaceutical Supplies: A Best Practices Study by SpendEdge

Category Overview

The global pharmaceutical packaging industry is rapidly growing due to the use of biodegradable materials as it adds to the sustainability of the packaging through all the stages of the pharmaceutical supplies lifecycle. However, the unpredictability in the price of the raw materials used in this industry may pose a significant challenge to the key market stakeholders.

The Procurement Pain Point and Insights Offered

A global pharmaceutical products company wanted to cut down the costs of the goods associated with pharmaceutical supplies. Furthermore, they also wanted to incorporate the best practices and consolidate their procurement strategies with suppliers from different countries. The client also wanted to streamline their existing procurement process for pharmaceutical supplies and identify potential cost saving opportunities.

SpendEdge carried out an in-depth research process consisting of primary and secondary research methodologies coupled with qualitative and quantitative data collection methods to cater to the specific category requirements of the client. Furthermore, theRequest Free Proposal suppliers were also graded based on the standards and allotted weights. The final supplier selection was carried out on parameters including geographic coverage, qualitative assessment scores, previous experience with the vendors, and product development and tooling costs. Moreover, we collaborated our research with a huge database of exclusive resources such as industry journals and reports, white papers, and news articles. The best practices study on the sourcing of pharmaceutical supplies also helped gain a better understanding of the procurement best practices for pharmaceutical supplies and the vital service offerings of the medical suppliers.

Business Outcome

This best practices study on the sourcing of pharmaceutical supplies helped the client identify and reduce the list of the major suppliers offering pharmaceutical packing solutions. This list offered by SpendEdge also helped the client achieve better high-cost savings compared to the current spend. Additionally, material cost indexing and steady conversion costs were also negotiated.

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Procurement Market Intelligence Study on the Best Practices for Managing Company Cars

The Procurement Pain Point

To understand the general practices in providing company cars to employees, a global leader in manufacturing and supplying cost-effective healthcare solutions approached SpendEdge to engage in a research study focused on the assessment of the best practices for the management of company cars in the target regions. The procurement market intelligence study on company cars management would also help the client gain comprehensive insights into the supply market, pricing, and procurement strategies specific to company cars category.

The primary objective of this company cars management study was to help the client gain a clearCapture understanding of the general best practices for company cars management and the procurement strategies for offering such services to employees. Additionally, this procurement market intelligence study on company cars management also helped the client gain insights on how companies classify perk and non-perk cars.

To meet the category requirements for company cars management, SpendEdge’s team of procurement market intelligence experts followed a blended approach of combining in-depth secondary research with primary interviews and track the latest developments and procurement trends in the market. Morover, our procurement market intelligence experts also reached out to industry experts and key stakeholders to understand the market’s short and long term growth prospects and changing trends for company cars management.

Procurement Insights Offered and the Outcome

To address the requirements specific to the needs of the client – a global company manufacturing healthcare devices – we deployed a team of supply market analysts who followed a blended research methodology consisting of in-depth qualitative and quantitative research followed by data analysis and insights development. Our procurement specialists worked directly under a project manager with significant experience in conducting specific procurement studies for vehicle fleet categories.

In a mere span of just five weeks, the client – a leading healthcare company that primarily focuses on manufacturing medical devices – was able to gain a clear understanding of the practices followed inCapture providing cars to employees and also gain insights on the procurement best practices, which would help reduce the overall cost for the company. Additionally, the procurement market intelligence solution for company cars management also helped the client develop robust strategies for the effective management of company cars for employees and also understand the approaches and policies followed by other peer group companies.

Some of the additional questions answered by our procurement market intelligence study on company cars management includes

 

– What are the general best practices for company cars management?

– What is the basic operating model?

– Do companies typically lease, or purchase vehicles?

– What are the typical pricing/leasing options?

– What are the average prices per car?

– Do the peer group companies utilize vehicle tracking companies as a way to monitor personal use?

 

This case study offers comprehensive information on how our procurement market intelligence study helped a global client understand the best practices for company cars management.

 

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Procurement and Sustainability: What does 2017 have in Store for Sourcing Managers?

Sustainability is growing as a priority for consumers and businesses alike. More and more customers are demanding responsibly sourced products, and it is becoming increasingly important to take the state of the environment into account when operating as a business. Aside from concerns over ethics and consumer demand, however, sustainable practices can also be more economical, and should, consequently, be taken into account when formulating sourcing and procurement strategy.

Transparency and sustainability can be a significant draw for consumers. People can be highly loyal to companies that share and act on their values, and many are willing to pay a higher price for such things. They are also more likely to trust an organization that is open about its processes and sources. In terms of costs, sometimes environmentally friendly policies are also more cost-effective. Reducing fuel use and CO2 emissions, for example, can provide significant savings.

The stats: sustainability is on the rise

EcoVadis has just released its latest report on sustainable procurement, titled “Scaling Up Sustainable Procurement: A New Phase of Expansion Must Begin.” It surveyed 120 companies in a variety of industries, as well as 360 suppliers. The study reveals that 97% of procurement organizations believe that sustainability and corporate social responsibility are important or critically important to operations. The motivation for sustainability varies by region — in the United States, the main motivator is risk mitigation, while European companies are more concerned about brand reputation.

The report also found that 76% of companies noticed an improvement in brand reputation as a result of sustainable procurement activities, and 55% had better supplier relationships. Sustainability is becoming a bigger focus for companies across the board, with the study showing an increase in sustainable activities in several areas over 2013, the year the previous version of this study was released. In order to remain competitive, companies can no longer afford to ignore this aspect of procurement decisions.

Putting it into practice

So how does a company ensure that its procurement strategy is sustainable? The process starts from within the organization. By setting an example at the highest levels of management and encouraging employee investment, it will be easier to integrate sustainability practices at every level. Soliciting suggestions and feedback from employees can bring in new ideas and increase engagement. Making sustainability part of an individual’s goals can also be effective.

Feedback and transparency are also valuable. Not only does more information increase one’s ability to make effective procurement decisions, but it also allows people to see the impact that their suggestions and efforts make, both on the company and the environment and on people around the world.

In terms of implementation, strong external reporting is essential. Without an accurate view of the supply chain and individual supplier performance, it is impossible to manage sustainability throughout the procurement process. By the same token, having a good relationship with suppliers is critical, as communication and cooperation can improve results significantly.

There are several factors to consider when establishing procurement strategy, and it can be difficult to determine what areas to prioritize (production, transportation, etc.). It is important to have a thorough understanding of the supply chain, the company’s goals, and stakeholder values. This makes it possible to narrow down the most important aspects and the ones that have the greatest impact and decide what can be ignored or receive less emphasis. By keeping all these factors in mind, it will be possible to gradually establish a supply chain that benefits both the environment and the company.

Answers to the questions

Leading BFSI Company Identifies Ways of Maximizing Value on Trading Software Spend

Business Challenge: Need for exploring ways of maximizing value on trading software spend

One of our clients, a leading BFSI company wanted to explore various ways of maximizing value on trading software spend by understanding aspects of the category, supplier, pricing, and buying behaviour.

Situation: The client wanted to gain detailed understanding of sourcing strategies of key buyers, and assess best practices as well as market dynamics

The client wanted to understand ways through which top buyers across sectors source trading software, to identify various measures that can be implemented to generate value from software spend. They were also keen on identifying cost-saving opportunities in this spend category and understand the market dynamics of trading software.

Approach: Employed a systematic, step-by-step approach to assessing the best-in-class practices, buying requirements, and supplier capabilities, to develop actionable recommendations

We took a systematic approach which involved assessment of level of maturity of client sectors in sourcing trading software by researching the best-in-class practices adopted by various sectors in different stages of the maturity lifecycle, exploring various product offerings in the market, identifying typical buying requirements of the procurement managers in this category and identifying suppliers for procurement managers to engage with. We also conducted a deep dive assessment to assess procurement practices that can be adopted by the client when engaging with these suppliers.

Impact: Client leveraged the understanding of procurement best practices and implemented strategies for improved cost savings

The client was able to develop deep understanding of the ways through which top buyers across sectors source trading software. They also able to gain clarity on various measures that can be implemented to generate value from software spend. Based on our recommendations, they were able to implement best cost-saving opportunities in this spend category, and achieve significant improvement in process optimization as well as cost savings.

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