The Business Problem
The client – a global electronics manufacturer with operations spread across different Asia-Pacific regions was witnessing profit decline amid mounting macro uncertainties. The slower revenue growth in the emerging markets and the rising US-China trade tensions were compelling the client to improve spend management and mitigate challenges impacting the cost of finished products. The need to gain visibility into the spend and drive organizational value forced the client to engage with SpendEdge. The objectives they were looking to achieve through this engagement were:
- Centralize legal entities into one procurement function and unify processes to deliver bottom-line savings.
- Reduce capital expenditure to avoid excess inventory and quality issues impacting the spend and the cost of finished products.
“Only a truly integrated spend management solution can fetch value for your company and result in intelligent procurement.”
Limited supply chain visibility, poor supplier transparency, new regulations, spend creep, contract management, risk mitigation, and the growing need to do “more with less” are some of the key challenges that procurement companies face. Spend creep has become one of the biggest challenges for companies today as companies are spending extensively to stay ahead of the competitors.
Unnecessary spend happens when businesses buy additional items, products or services, from suppliers that aren’t needed. Also, it happens because of misguided bid management process, weaker supply chain management systems, and lack of auditing and spend analysis. Therefore, procurement professionals need to have the right spend management solutions to tackle these challenges efficiently and effectively.
At SpendEdge, we understand the impact that spend management solutions can have on your business. And to help companies identify latent opportunities to devise strategic plans to minimize their expenditure in every category, our team of experts have provided a comprehensive guide to spend management.
A prominent waste management company in the U.S was looking at enhancing savings and spend visibility across every area of spend. The waste management company approached the spend management experts at SpendEdge to leverage their industry expertise and develop an accurate spend management system.
A waste management company is a holding firm. The company is also a leading provider of waste management solutions. It also offers environmental services through its subsidiaries.
The waste management company was facing major loses due to their inefficiency in spend management.
How did SpendEdge Help the Waste Management Company?
- Step 1: Identify and consolidate spend data
Since spend data is spread across different departments within an organization. It is essential to identify their source and consolidate them so that it becomes easier to analyze and draw conclusions. To do so the spend management experts at SpendEdge devised a comprehensive approach to gather spend data from various departments across the organization. The solutions offered by our spend analysis experts also helped the waste management company to identify payments and invoices from all sources and consolidate them in order to gain an integrated view of all procurement spend categories.
- Step 2: Standardize the data
This is the most crucial step in devising a robust spend management system. The spend data collected from different sources across the organization must be standardized before analyzing them. In addition to standardizing the spend data, the spend management experts played a key role in helping the waste management company identify the source of spend and devise effective solutions to eliminate duplication of spend data.
- Step 3: Categorize and prioritize expenses
Categorizing the spend data into different groups helped the waste management company to understand the category needs and allocate resources efficiently. The spend management experts at SpendEdge devised a comprehensive three-step approach to spend management that helped the waste management company make informed decisions about their future procurement spends.
Key questions answered in this spend management engagement include:
To gain in-depth insights into our spend management solutions
Benefits of the Engagement:
The spend management experts at SpendEdge helped the waste management company to devise an effective spend management system that enhanced spend visibility and offered better control of transactions.
Importance of Spend Management
Our spend management experts have helped several industry leaders to analyze their spend data and identify cost-saving opportunities. Though spend management may seem to be a daunting task, if done rightly, the benefits it offers are innumerable.
In today’s business scenario a major concern for every waste management company revolves around effective spend management. With this being said having a better handle on your spend management capabilities is crucial to every financial aspect of your business including product development and investments. Our spend management experts help clients from across industries to realize huge profits by enhancing their spend management capabilities.
To thrive and maintain a competitive edge in a complex market, organizations should focus on enhancing the strategies behind their spend management systems. This prompted the waste management company to identify and devise ways to invest wisely in order to meet their current spend management needs while fueling their future growth prospect.
A well-executed approach to spend management that addresses every spend category within the organization, allows businesses to drive deflation and deliver momentous value to the otherwise unaddressed spend categories.
A must-read case study for procurement specialists and decision makers looking to develop an understanding of the waste management sector
The client wanted to leverage spend management to enhance spend capabilities across their supply network to drive topline revenue growth. To proactively address the challenges emerging due to inefficient spend management, the fast food industry client approached SpendEdge to devise an all-inclusive approach to spend management throughout their global supply network.
A detailed quantitative analysis of the various spend factors across their supply network was carried out to identify, assess, and prioritize each factor contributing to irrelevant spend. Using a robust spend management framework, the client was looking at devising appropriate strategies to reduce unwanted costs and inefficiency out of the supply chain. By doing so, the client wanted to gauge the impact on their bottom line and free up resources to address changing consumer predilections.
Furthermore, to address the issues of the fast food industry client a robust three-step spend management framework was developed, it included – collection, spend data analysis, and the development of a spend management framework. Following this, the fast food industry client redesigned their spend management system to leverage and include proactive spend management strategies.
About the Client:
A leading fast food chain in the US. The client is a prominent player in the fast food industry with multiple branches across various geographies.
The fast food industry player was facing difficulties in enhancing the spend management capabilities across their global supply network. To help the client overcome their challenges, the experts at SpendEdge developed a three-step methodology to tactically address the burgeoning nature of an inefficient spend management system.
How did SpendEdge Help the Client:
- Step 1: Extraction and clean-up of spend data from legacy systems
In the first step, spend data from across the client’s supply network was extracted, standardized, de-duplicated, and enriched to ensure effective spend data management. Our spend management experts followed a structured approach to develop a framework to effectively track the client’s organizational spend.
- Step 2: Collection and categorization of organizational spend data
It is essential to collect and categorize spend data from a multitude of sources within the organization’s supply network to identify irrelevant sources of spend. By doing so, organizations can effectively reduce and overcome the inflexibility caused by an incompetent spend management system.
- Step 3: Devised a flexible spend management framework aimed at reducing the organizational risks
The dynamic nature of the supply chain called for the refinement of the client’s spend management capabilities. The development of a proactive spend management framework required a combination of measures, which included – changes to the organization’s data management structure, spend data management strategies, and the use of advanced spend management.
Key questions answered in this spend management study include:
Benefits of the Engagement
Our spend management experts helped the fast food industry client devise an effective spend management framework to diversify their sourcing strategies to and minimize the risk of catastrophic supply chain failure due to an ineffective spend management system.
Leveraging spend management enabled the fast food industry client to enhance the visibility of their supply chain processes by establishing an interconnected relationship between different tiers of the supply network. The development of a holistic spend management approach also accounted for major changes in data management, organizational processes, and data governance, which helped address changes in market trends including the changes in regional and global demands.
Why is spend management necessary?
To deal with the inadequacies of traditional spend management systems, leading fast food industry firms are increasingly recognizing the need to incorporate spend management strategies across their global supply network. Click To TweetWith the easy availability of advanced technological solutions, it is now possible to bring in massive cultural transformations through the adoption and implementation of spend management as a fundamental part of business maneuvers.
While leading business establishments often turn to spend management solutions to reduce purchasing spend, they quickly realize that a precise spend management framework ultimately relies on the reliability and quality of the underlying spend data. This case study on spend management concludes that a successful spend management system must be based on a robust data management foundation.
To know more about our spend management solutions for the fast food industry
- SpendEdge’s Supply Chain Analysis Helps a Leading Auto Parts Manufacturer Realize Annual Savings of US $300,000
- Spend Analysis Helps a Leading Processed Meat Manufacturer to Develop Effective Category Strategies for their Manufacturing Units
Overview of the dehydrated ready to eat food products manufacturing sector
Dehydration is the process extracting the moisture content of cooked food products with the help of advanced technology and equipment. This process converts the food products into a granular form while retaining most of its nutritional value, color, flavor, taste, and other such aspects. It is important to note that the process of dehydration is a simple process that is void of chemicals and preservatives. Such dehydrated ready to eat food products can be stored for longer durations and this is turning to be a major reason for their increasing demand.
The global food and beverage sector is heading to a ready to eat revolution. Also, the increase in demand for ready to eat food products can be attributed to the growth of supermarkets and other specialized retail chains across the globe. Other factors fueling the demand for ready to eat food products include high shelf-life, rapid lifestyle changes, ease of availability, and other socio-economic factors.
The global dehydrated ready to eat food products segment is broadly segmented into:
- Dehydrated Vegetables
- Dehydrated Fruits
- Dehydrated Meat
The Business Challenge and Journey
The client, a leading player in the food and beverage industry, specializing in the manufacturing of dehydrated ready to eat food products wanted to leverage the use of SpendEdge’s spend analysis solution. The client also wanted to boost the process efficiency and cost-effectiveness across their business units.
The client was facing several issues related to their inefficient supply chain strategies. The company’s supply chain management executives recognized the tremendous benefits of implementing a spend analysis study. As such, they were looking at reducing the company’s risk profile by improving the efficiency of their overall operations and by cutting down on maverick spend.
To identify challenges in the supply chain functions, the spend analysis experts at SpendEdge carried out extensive research comprising interviews and discussions with prominent stakeholders in the food and beverage industry. The experts also compiled information across a wide array of reliable sources such as trade shows, company presentations, industry forums.
Why should you leverage spend analysis?
Spend analysis is a practical approach to evaluate the strengths and weaknesses related to organizational spend. It helps in determining the best approach to achieve maximum benefits while reducing maverick spend.
The spend analysis assessment process affects nearly every aspect of an organization including product development, R&D, demand and supply planning, manufacturing, delivery of goods, and customer returns. Moreover, the dynamic nature of supply chains across industries has made spend analysis a vital component for business growth.
Fundamental questions answered in this spend analysis study include:
SpendEdge’s spend analysis solution offered relevant insights that helped the ready to eat food products manufacturing firm in assessing the spend patterns to derive meaningful insights and drive business growth. Our solution also enabled the client to identify, implement the best practices that produced the best performance results in the ready to eat food products manufacturing sector, in terms of savings, cost efficiency, and process efficiency.
Moreover, the spend analysis solution enabled the client to achieve breakthrough improvements in their overall supply chain performance. Furthermore, it offered relevant insights to better understand the market scenario, supplier negotiation strategies, industry standards, and expectations.
Ready to eat food products market drivers:
- Urbanization– Rapid urbanization is a key factor augmenting the demand for ready to eat food products across emerging economies. Other factors such as time crunch due to busy work schedules of people living in urban areas, increase the dependence on ready to eat food products. This is further aided by the penetration and availability of a wide variety of ready to eat products in different packaging formats at various retail points.
- New technologies- Technological advancements and innovations have further enabled players in this sector to enhance their product offerings. Such factors have also made it easier to develop and market region-specific products in order to cater to the needs of people living in specific geographical areas.
In an effort to identify long-term savings, leading organizations have turned to spend analysis, to analyze their organizational expenditures. Several business firms have already taken advantage of the information that a robust spend analysis study can provide their supply chain operations. Moreover, organizations with spend analysis have reaped benefits in the areas of cost-effectiveness and process efficiency. Therefore, it is essential for any company irrespective of the sector in which it operates to implement a spend analysis study to enhance business models and gain a competitive edge.
To know more about our spend analysis solutions
Overview of the Fashion Retail Industry:
The fashion retail industry has witnessed several fascinating changes as well as challenges in the past few years; these are the primary indicators of the evolving fashion retail market. In order to harness the concomitant benefits, the challenges associated with these changes need to be addressed most efficiently and prudently. The most critical factor that determines the success of fashion retailers lies in their ability to gauge the retail industry trends in accordance with the consumer’s purchasing decisions. Also, the increase in disposable incomes, exposure to international events, and the rapid changes in the lifestyle of the global population are driving the changes in the consumer purchase behavior.
Let’s take a look at the key retail industry trends that are shaping the future of the global fashion retail market:
- Application of technology: Rapid advancements in technology have brought about several changes in various sectors including the fashion retail segment. In a world that is rapidly adapting to the evolving technological changes, fashion retailers have to ensure that they deploy the right technology to enhance their business efficiency. Technology also has great potential for attracting consumers to retailers irrespective of the format.
- Environmental concern: The aspect of green marketing will ramp up the retailer’s vigilance on the environmental friendliness of the company. Eco-friendliness is also a critical performance metric for retail organizations across the globe.
- Customization of product portfolios: The success of any retail firm lies in its ability to attract consumers belonging to different socio-economic strata. This necessitates excellence in product packaging and practical structuring of product portfolios.
Though several such factors are favoring the growth of the global fashion retail sector, they also give rise to challenges related to effective spend management. To overcome such difficulties, leading players in the fashion retail industry are now leveraging spend analysis to devise and implement better sourcing strategies.
The Business Challenge and Journey:
The client, a leading player in the fashion retail industry with several international business units, was looking at developing robust spend analysis capabilities. Not surprisingly, the fashion retailer found itself battling several issues that arise while employing acquisitions and mergers as a growth strategy.
Moreover, the company’s sourcing executives recognized the tremendous scope for streamlining their processes to achieve cost savings in indirect and MRP spend. As such, they were looking at reducing their maverick spend and increase their net income. Also, the client was looking at setting industry-specific benchmarks to assess their performance against the market developments.
To identify challenges in the supply chain activities, the spend analysis experts at SpendEdge carried out extensive research comprising interviews and discussions with prominent stakeholders in the fashion retail industry. The experts also compiled information across a wide array of reliable sources such as trade shows, company presentations, industry forums.
Why should you leverage spend analysis?
SpendEdge’s spend analysis offers end-to-end solutions that reduce the overall purchasing costs and enhance the value of supplier relationships. Also, the spend analysis data will help organizations in improving their business processes to increase the overall efficiency.
Spend management acts a guide for firms to devise standardized procurement processes. Therefore, it’s essential for every organization to leverage spend analysis and gain a better handle on its supply chain processes. Furthermore, implementing the best practices in spend management provides an extra boost to increase the company’s profit margins.
Fundamental questions answered in this spend analysis study include:
SpendEdge’s spend analysis solutions offered relevant insights that helped the client to develop robust sourcing strategies and cut down on maverick spend. It also assisted them in optimizing their working capital by identifying categories and suppliers with lower-than-policy-level payment terms that offer a great starting point for freeing working capital. Moreover, spend analysis solution provided valuable insights that helped the client in identifying price arbitrages. Our solution also assisted them to benchmark their performance against market developments to ensure that they perform well and keep up with the market developments.