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Case study — Market Testing
40%+ in Direct Material Savings
Why market testing your suppliers is critical
- Client
- Industrial equipment OEM
- Size
- 75 employees
- Project length
- 9 weeks
Before
67%+ above market
Pricing from a supplier of a critical spend category
After
40%+ savings
Direct material savings, back to market pricing
- Capability and tools to manage spend closely going forward
- Spend aligned with suppliers that match their needs and culture
What the client wanted
Understand how their incumbent suppliers compare to the market, and use it to leverage cost savings.
The challenge
Reactive sourcing and poor supplier management left the company exposed to out-of-market pricing.
The approach
- 01Reviewed spend.
- 02Categorized spend to match the market.
- 03Approached suppliers with a package to test the market.
- 04Negotiated and implemented to realize the savings.
The point of impact
Align your spend with the market, find suppliers that match your needs and culture, and test it regularly.
“The thorough, step-by-step market testing approach produced incredible results efficiently, and left us with the capability and tools to ensure we manage our spend closely going forward.”
What made it work
Align your spend with the right supplier types, then test the market regularly. It produces results every time.
Next step
Want to know how your suppliers compare to the market?
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