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Strategic Procurement Case Study

With the stagnating growth rates in the west, the Asian markets are the gaining much importance. Manufacturing in Asia is looked as an economically viable option. To address this global requirement Government of India has offered incentives to manufacturers to set up manufacturing units in India. Government of India’s “Make in India”  initiative has garnered interest of many international manufacturing firms. These firms see manufacturing in India as a strategic option to cater to a large market in the sub-continent. However, the success of Make in India lies in having supply chain right. Developing the vendor ecosystem is the most challenging part of the manufacturing process.  Most of these international manufacturers face difficulty in identifying  the suppliers who would  fulfil their raw material need. While for some of the components India has a ready supplier base, but at the same time for some components there is a requirement to nurture and develop the potential supplier. The main challenge the industry faces is in developing the potential suppliers.

One of the case that was handled by ESPIAL-EDGE  is as follows:

Situation

ESPIAL-EDGE was  hired by a major electronic product manufacturer for its  expertise in providing research support to strategic procurement. The basic requirement of the procurement team was to identify component manufacturers  from India. Preparing a procurement map required research and  analysis resources available.

Approach

ESPIAL-EDGE deployed its  unique methodology for identifying the suppliers who would fit in with the  client’s requirement and be their strategic supplier. The typical stages included defining the value creation framework for the client and identify the suppliers.  

The client required ESPIAL-EDGE to provide research support in identifying manufacturers  for the following categories of components:

Cable Wires

Acoustics

Display Devices

Precision Machining

Fab Metals-Die Casting

Fab Plastics

PCB

Mobile Antenna

Chargers and Adapters

Key Pads

Die Cuts

Hardware Fasteners

Fab Stamping

Vibratory Motors

Camera Module

Passive Commodity

Batteries

 

.

At ESPIAL-EDGE we followed our unique methodology which included web-scouting, digital marketing and lead management framework  for identifying at least 25 suppliers in each category of the components listed above, which were pursued for RFI (Request for Information). The value chain analysis was carried out to identify the manufacturers for collaboration to gain a competitive advantage and increase volumes or margin. Control points in the value chain were identified where a player could strongly influence subsequent innovations in the value chain. Portfolio analysis provided a clear presentation of the relative merits of the firms that were part of the list, and likely prioritization of the opportunities was done. While some of the firms were pursued as collaborators, some were categorised as potential suppliers.

Impact and Advantage: Getting the strategic procurement map for the firm with line of vendors is a tedious task. Our research helped the OEM in preparing a procurement map by identifying a large number of suppliers-so that the firm is able to choose the best.

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