Jul 23, 2019   SOURCE: BusinessWire

SpendEdge Reduced the Overall Spend for a Chemical Company by Identifying Best Cost Sourcing Locations | Request a Free Proposal for In-depth Insights

SpendEdge, a leading provider of procurement market intelligence solutions, has announced the completion of the latest success story on reducing the overall spend of the chemical company by 10%. This article highlights how identifying market opportunities can help chemical companies to devise effective strategies to manage feedstock volatility and reap benefits from economic growth.

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The chemical sector has outperformed not only the overall market but also most of its customer industries such as construction and automotive. But different subsectors within chemicals categories have been facing challenges such as feedstock volatility and slumps driven by key buyers in industries. The performance of petrochemical companies has also been affected by the naphtha-ethane spread and the commodity cycle. Additionally, the end-market’s growth and mergers-and-acquisition activities are posing a major challenge for specialty players. Reforms such as Toxic Substances Control Act (TSCA) have further added to the woes of CPOs and have made it difficult to increase earnings on a base of total revenues.

By taking into account the complexity of the situation, the team at SpendEdge has published a success story that will help you better understand the challenges in the chemical industry. Despite numerous positive developments benefitting specific segments of the industry and increasing the capital-market's performance, the client was facing difficulties in identifying best cost sourcing locations. The laws and norms were restricting them to procure shale gas at reasonable prices.

Wondering how we helped the company address risks such as feedstock volatility and increase earnings on a base of total revenues? Request a free proposal to access our solution portfolio for free!

Challenges Faced by the Client

Since feedstock was consuming 40% of the company's total costs, they were falling victim to feedstock price volatility. Poor market intelligence and lack of databases were also posing a problem for the client since they were unable to predict supply costs and identify suppliers who could ensure uninterrupted supply of raw materials. The key challenges they aimed to address through this engagement are mentioned below:

  • Challenge 1: Ensure the availability of reasonably priced chemicals while meeting stipulated quality standards.
  • Challenge 2: Meet customers’ request of niche products to suit particular end uses or to meet diverse local regulations.
  • Want to know how our experts analyzed different markets and ensured the availability of raw materials? Get in touch with our experts now!

Solutions offered

The solutions offered enabled the client – a leading company in the chemical industry – to select the best cost sourcing locations to procure chemical supplies. The solution offered helped them to:

  • Identify opportunities to reduce costs and establish multiple sources of requirements.
  • Gain in-depth insights into the business model of suppliers and their cost structures.
  • Want to gain detailed insights into suppliers’ business models and their cost structures? Request a free demo to gain 7-day free trial today!

Outcome: The solution offered by the experts at SpendEdge helped the chemical company to analyze rising trends in the chemical industry. The insights provided helped them to monitor developments in the global chemical industry to negotiate better terms with suppliers. This enabled the client to reduce purchasing expenditure which comprised of 30% of the total sales revenue. The solution provided thus identified products that were strategic and critical to the company’s operations and reduced the overall spend of the company by 10%.

To know more about the solutions offered to the chemical company, request more information here!

About SpendEdge:

SpendEdge shares your passion for driving sourcing and procurement excellence. We are the preferred procurement market intelligence partner for 120+ Fortune 500 firms and other leading companies across numerous industries. Our strength lies in delivering robust, real-time procurement market intelligence reports and solutions.

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