Revolutionizing Procurement: SpendEdge's AI-Backed MRO Spend Optimization Case Study

NEW YORK, Sept. 25, 2023 /PRNewswire/ -- The procurement landscape is evolving rapidly, with various industries facing complex challenges in sourcing equipment and materials. In one such case, a North American manufacturer of synthetic-non-ionic surfactants and chemical products encountered difficulties in managing their MRO (Maintenance, Repair, and Operations) spend effectively. SpendEdge stepped in to provide innovative solutions, optimizing the client's MRO procurement processes and achieving remarkable results.

Client Details: Our client, a prominent North American manufacturer with a global presence, is recognized for its innovation and commitment to cost efficiency and sustainability in the chemical sector. Their extensive product portfolio spans multiple operating segments and serves industries worldwide.

Challenges: The client's procurement organization had successfully implemented various cost-saving initiatives over the years. However, indirect spend, particularly in the realm of MRO, remained a complex challenge. Several factors contributed to this:

1. Lack of Clear Visibility: Indirect spend often went unnoticed on CPO dashboards, leading to data errors, wastage of time, and resources.
2. Distributed Supplier Base: Indirect spend involved numerous suppliers, making it difficult to track and trace purchase transactions accurately.
3. Data Complexity: Multiple part numbers assigned to the same item, labeling errors, and supplier substitutions added layers of complexity.
4. Overruns in MRO Sourcing: These challenges resulted in cost and time overruns in MRO sourcing, impacting the client's efficiency and bottom line.

Solutions: In late 2022, the client partnered with SpendEdge's procurement intelligence experts to address these challenges and revolutionize their MRO spend management. Working remotely from a lower-cost location, our specialists implemented a market-leading AI-backed spend optimization solution. The process included:

1. Deep Data Assessment: Analyzing current and three-year historic procurement data, alongside external market information, to identify patterns across all spend categories, including MRO.
2. Supplier Consolidation: Identifying opportunities for supplier consolidation to reduce maverick spend and improve supplier management.
3. Predictive Models: Developing modules capable of predicting future spend patterns, enhancing proactive procurement decisions.
4. Item Master Integrity: Ensuring data integrity in the item master, eliminating discrepancies between manufacturer and supplier part numbers.

Results: The transformation of MRO spend management had a profound impact:

1. Cost Savings: The client brought a significant portion of MRO spend under prediction and management, leading to substantial cost savings.
2. Deeper Supplier Relationships: Improved supplier consolidation and management enhanced relationships and reliability.
3. Streamlined Procurement: Predictive models and data integrity streamlined procurement processes, saving time and resources.
4. Enhanced Efficiency: The client's procurement organization became more agile and efficient, driving cost-effective practices.

To read the full case study and learn more about SpendEdge's transformative solutions, click here.

About SpendEdge

SpendEdge is a global procurement and supply chain consulting firm with a reputation for driving innovation and cost efficiency. We empower organizations across industries to make informed, data-driven decisions.

SOURCE SpendEdge