Procurement Intelligence Solutions for a Retail Company – A SpendEdge Success Story

Procurement Intelligence Solution Transforms Finance Operations and Enhances Supply Management

About the Client

The client is an American multinational retail-clothing firm. With over 500+ stores, the company employs around 57,000 people globally.

The Business Challenge

With changing consumer behavior and technological innovations, retailers across the globe are uncovering new ways to sustain from the disruption. Moreover, retail brands are coping with a long-term uptrend in commodity and other raw materials input prices, and rapidly shifting global supply chain. These mounting global supply chain complexity with retail markets is forcing retail companies to be more agile and react faster than other players in the market. This is where procurement intelligence comes into play. In today’s competitive market scenario, procurement intelligence is the key to establishing long-term strategic sourcing and supply management plans.

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Top Players in The Global Contract Staffing Service Market

The staffing industry is changing, and as a result, direct placement recruiters are turning to contract staffing companies. Contract staffing could prove beneficial for companies looking for improved cash flow and better relationships with clients. For organizations that are uninitiated with contract staffing, there’s nothing to fret. In contract staffing, there is only one additional step for the recruiter when compared to direct placement. This includes determining who is responsible for the basic tasks and functions such as employee on boarding paperwork, payroll funding and processing, taxes, insurance, collections, and ACA compliance issues. Organizations can either choose to handle these tasks themselves or outsource all of the burden to contract staffing companies.

SpendEdge’s latest procurement intelligence report on the global contract staffing market reveals actionable insights into the factors impacting contract staffing, the growth patterns in this sector, and the key supplier selection criteria:

Top contract staffing companies

Adecco

The company is based in Zurich, Switzerland. Adecco is a Fortune Global 500 company and is one of the largest contract staffing companies in the world. Adecco, founded in 1957, was formerly known as Adia. In the year 1990, it merged with Ecco, one of the leading contract staffing companies to form Adecco. In 2015, the company acquired Knightsbridge Human Capital solutions, a Canada-based market leader in career transition, leadership, and talent.

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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.

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Striving for Procurement Excellence? Here’s What You Need to Do

The role of procurement in organizations is no longer a matter of debate. Sourcing and procurement have been gaining increasingly strategic relevance in companies and has been the object of constant attention as it is directly related to the level of effectiveness of the organization and closely connected to the company’s cost structure. There is a new recognition in companies of the positive impact that procurement excellence can have on important performance indicators, like costs and spend patterns. Now, top players across industries are contemplating ways to attain sourcing and procurement excellence in order to gain a sustainable cost advantage for business. Furthermore, companies can analyze their procurement operation and think strategically using reliable data which is a foundational building block of procurement excellence.

Execute transformational changes

Leading organizations leverage internal and external data while undertaking transformational changes in procurement. This helps them shift focus to strategic buying vs. tactical procurement. Combining these elements give companies unprecedented visibility over their procurement functions and better leverage its role in increasing profitability. Companies that have harmonized data around their spending tend to attain sourcing and procurement excellence. For instance, while purchasing raw materials, manufacturers must gain an understanding of the change in spending on a year-on-year basis in order to proactively pinpoint and cater to any significant fluctuations.

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Achieving Successful Strategic Procurement in the Chemical Industry

Strategic procurement is a plan that is crafted with the sole objective of achieving goals that may be quite far off in the distance, such as five or ten years into the future. A strategic procurement strategy not only helps come up with short-term solutions but rather involves coming up with strategies that will serve the long-term purpose. In any organization, strategic procurement plans are created by top-level management and the same applies to firms in the chemical industry. A strategic procurement plan also influences the tactical procurement plans that are developed and implemented. It is a comprehensive plan that takes into account the targeted objectives and needs of the procurement department of the firm. Strategic procurement is one of the most significant tools that helps in maximizing the value contribution of any company. It serves as a guide for any organization and should be updated regularly at the interval of a year to ensure its alignment with the overall business strategy.

In this blog, the procurement experts at SpendEdge explain some of the strategies for developing a successful strategic procurement plan for the chemical industry. (more…)

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Forming a World-Class Procurement Organization: A Transformational Journey

Forming a World-Class Procurement Organization – A Transformational Journey

Procurement Consulting Market: All You Need to Know

Is procurement a profit center or a cost center? That’s a debate for another day. However, it is hard to ignore the fact that companies can save millions and millions of dollars in their procurement process. The savings can arise from superior supplier selection, material purchase, risk assessment, and many other factors. These savings are not always evident, and processes such as supplier selection and risk management can get overly complicated. This is where companies need to consult experts in the field of procurement. As a result, they mostly turn towards procurement consultants.

Regional market

North America and Europe are the most mature markets for procurement consulting services. These regions consist of a number of industry leaders that employ strategic procurement and are moving toward value chain integration. In the APAC region though, buyers are facing intense pressure to improve procurement as it is increasingly becoming an important source of goods and services. Fast-growing operations in countries such as China and India have resulted in the need to improve efficiency in operations.

Pricing outlook

Talent cost, including salaries, training, and development, is a major cost component for procurement consulting firms. While retention of talent is a top priority in mature markets such as North America and Europe, attracting talent is the focus for service providers in MEA, and it is training and development in APAC. Buyers are increasingly considering that their internal team lacks the capabilities to enhance their procurement strategy. This is expected to significantly increase the outsourcing of strategic sourcing and category management functions. This trend is especially evident in the financial services sector.

Cost drivers

Procurement consulting firms have to bear the employee costs including recruiting expenses, employee salary, and benefits which are expected to marginally increase due to inflation and the need to hire skilled professionals. Increasing need for service providers to retain talented consultants are expected to augment the salary costs for service providers. Also, the availability of advanced technology such as ERP software, automation, analytics, and cybersecurity, that enhances end-to-end procurement consulting services has increased service providers’ overall costs.

Negotiation strategies

Companies can save up to 8% of their cost base by adopting a reward-based engagement approach. This way consultants also increase their repeat business and bring innovation in services accessibility. Additionally, category management initiatives such as identification of cost-saving opportunities based on innovation, engagement, and billing can also result in significant cost savings.

Industry best practices

Category managers in this sector are focusing on developing a well-defined strategy to optimize procurement spend. They are identifying cost-saving opportunities such as adopting technologies, collaborating with vendors, and conducting price benchmarking studies to minimize the spend. Additionally, the focus is on developing strategic partnerships, where buyers and suppliers engage in contracts that do not work on incremental costs but are designed flexibly to incorporate prevailing market and pricing trends.

The Future of Procurement in the Digital Age: Planning Today for the Procurement of Tomorrow

4 Spend Analysis Challenges Procurement Teams Should Know About

Spend analysis is undoubtedly an essential function of procurement in a business. Spend analysis, when correctly performed, can lead to insightful findings and better savings, and often act as a catalyst to drive business decisions for a company. Using a spend analysis solution allows companies to uncover the hidden potential lying within their data. Businesses can empower their team with business intelligence to make discoveries that can quickly grow the sourcing pipeline. However, procurement teams implementing a spend analysis solution can often face several challenges and roadblocks. Here are four of the critical challenges that we think procurement teams must overcome for undertaking spend analysis successfully:

Cleansing the data

The tasks to extract, cleanse, classify and normalize spend data should not be underestimated. Traditional, rules-based approaches to cleansing and organizing spend data can be time-consuming and may introduce inconsistencies if carried out manually. Automated methods may be quicker, but exceptions will undermine completeness, and therefore accuracy.

Insufficient resources

The purchasing team is of a company is often consumed with daily tasks such as buying basic materials for the organization. Spend analysis usually starts with purchasing and strategic sourcing. For this, procurement teams require IT support. Although the need for IT support has lessened significantly over the years, procurement teams still need to allocate resources to spend analysis and strategic sourcing to drive leverage across the organization.

Data silos

Each group managing spend has their own systems and their own data. In most companies, for security reasons, no one person has access to all the different systems. So, if procurement teams want to pull together all the data, different people have to be approached for various data.In this case, there are chances of encountering varying attitudes and degrees of cooperation from people having access to the data. Also, in many cases, data may be incomplete, inaccurate, or even inconsistent. In a rush to satisfy a requirement, some descriptions are too brief to understand the nature of the spend; sometimes errors in coding occur; and many times the same company may be referred to in different ways. These might cause confusion and miscommunication during procurement.

Resistance to change

Spend analysis can often be misunderstood. It can represent a threat to some stakeholders including customers, contracting officers, financial managers, etc. The best way to address resistance is with education. Develop briefings to educate anyone with an interest, informing them about what speed analysis is, how it can benefit them, and how can it contribute to success.

To know more about the spend analysis challenges that procurement teams encounter

The Largest Consumers of Crude Oil in the World

The world runs on money! Or oil! Crude oil to be more specific. It is unnecessary to explain the importance of crude oil in the world. We just have to look at the news, and how countries with oil resources have become rich. The Middle East is the biggest example of this statement. The statement, “the world runs on oil” not only talks about the political influence of oil-rich economies but also in its literal sense. It is because of crude oil that most of the vehicles are running on the road and the manufacturing units all across the world are still functional. The global crude oil consumption as of 2017 stood at 3.72 trillion metric tonnes. (SpendEdge – Procurement Market Intelligence Report) Although the world is moving towards clean energy, oil is still a significant part of the global economy.

Largest consumers of crude oil

APAC region

High economic growth in countries such as China, India, Singapore, and Indonesia has driven consumption and made APAC the leading market for crude oil in terms of consumption. Gasoline, kerosene, diesel fuel, and paraffin wax are amongst the major crude oil products consumed in this region. Such fuels are powering various industrial and domestic applications including automobile, chemical manufacturing, and road construction. In India, LPG consumption is very high, as it is the primary source of energy for daily cooking needs. Over the last decade, the production of natural gas in China has been shooting up; thus, driving the manufacturing of chemicals as it’s a clean fuel source. As a result, the overall demand for crude oil is expected to grow at a CAGR of 3%–4% over the forecast period

North America

In terms of consumption, the US is the largest market for crude oil, not only in North America but also globally. The country accounts for more than 20% of the global crude oil consumption. It is no wonder that the US has either issues or diplomatic relations with many countries in the Middle East. A high number of per capita vehicle ownership and energy consumption are the significant factors driving the consumption in this market. Additionally, the discovery of shale oil in the region has resulted in an increase in domestic production volumes of crude oil, which, in turn, has led to a decline in both price and imports of crude oil.

However, the growth of the natural gas market in the region, which can be attributed to the discovery of shale gas in the region, has resulted in several chemical suppliers using natural gas as fuel and feedstock to produce chemicals such as olefins and ethylene. These factors are expected to lead to a minimal growth in demand for crude oil in the region

Europe

Europe ranks third in terms of global crude oil consumption. The strong chemical and automotive market in France, Germany, and Russia are driving the consumption in this region. The region is also the fastest growing in terms of green energy as countries such as Sweden and Denmark are focusing on clean energy. Europe is also the leading market for electric cars (sales per capita) worldwide. Moreover, governments across the region have passed legislation to reduce the consumption of crude oil by employing stringent limitations on emissions of pollutants from the use of crude oil products. Consequently, the overall market for crude oil is expected to decline over the years.

MEA

MEA is one of the largest production hubs for crude oil. The region uses crude oil to produce chemicals such as EDC, VCM, ethylene, benzene, toluene, and olefins. Apart from the Middle East, high economic growth in African countries, such as Nigeria, is leading to the higher consumption of crude oil-based fuels. The only concern for crude oil market in this region is the surrounding political instability, civil war, and financial downturn. Such events can have a negative effect on both the demand and supply of crude oil, which will hamper the market growth.

South America

Venezuela is the country with largest oil reserve in the world, with an estimated proven oil reserve of over 250 billion barrels. In terms of consumption, it ranks third followed by Brazil and Argentina. Majority of the crude oil is used in the production of chemicals such as EDC, olefins, gasoline, diesel, and kerosene, which are then used in several end-user segments. The region, however, experiences a decline in crude oil demand due to the preference for biofuels such as ethanol.

Read more about the top consumers of crude oil with supply market insights, procurement challenges, pricing insights, and technological advancements in SpendEdge’s upcoming report on the global crude oil market.

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Tag: procurement intelligence

Procurement Intelligence Solutions for a Retail Company – A SpendEdge Success Story

Procurement Intelligence Solution Transforms Finance Operations and Enhances Supply Management

Top Players in The Global Contract Staffing Service Market