Short Cycle Spend Analysis

A US based mid-sized industrial manufacturing company significantly improved the spend visibility through a quick, short cycle spend analysis exercise.

Overview

The company was going through a separation or spin-off and was looking for a quick spend visibility in order to identify and drive cost saving opportunities.

Challenges

Poor data quality.
Near 16,000 SKUs with an annual spend of around $40M across divisions.
Fragmented supply base with 1200+ suppliers.
Lack of data linkages between systems & products and lack of vendor hierarchy.

Solutions

Our quick and rigorous data cleansing & categorization enabled improved spend visibility that further helped conduct a quick opportunity assessment.
Various work streams included –

- Data Cleansing
  Besides currency, the item and supplier fields – names, description etc. were compared and normalized.
- Item Categorization
  AI powered item classification tool alongside expert reviews achieved an efficient turnaround of under 3 days.
- Spend Analysis
  Several cost savings opportunities were identified through spend analysis.

Results

A quick spend data analysis provides for a faster decision making around major cost savings opportunity areas.

Key outcome of this exercise included –

Clear roadmap to achieve near $2M in cost savings within MRO, Chemicals, and Services categories.
Opportunity to consolidate the fragmented supply base.
Improved negotiation opportunities through external price benchmarks.

“A quick short-cycle spend data analysis provides for faster decision making.”