Discrete Components Market Procurement Intelligence Report

A changing ecosystem within the Engineering Components market also affects the procurement process, cost dynamics and supplier attractiveness for the buyers of Discrete Components. Suppliers are continuously taking efforts to improve efficiencies and productivity and deploying processes and technologies. Some of these investments are likely to increase their costs in the shorter term, but learnings from other sectors keep the suppliers optimistic about a lean cost structure in the longer run.

Volatility in the prices of key inputs is creating multiple issues that impact procurement within Discrete Components category such as benchmarking and budgeting of the procurement costs.

Procurement costs for Discrete Components are highly impacted by an increase in the costs associated with the value chain of Discrete Components, such as logistics, labor cost and energy. Additionally, outdated assets are also increasing the cost for suppliers.

It has become imperative for category managers to remain as agile as possible in terms of their procurement practices. However, it is not always easy to quickly spot and implement alternative practices in a category like Discrete Components. To help quick decision making, this report advises on several procurement best practices that have worked well for category managers.

For example, Buyers should assess the level of adoption of the latest technologies by suppliers to assess cost-saving opportunities and quality that can be provided by the latter. For instance, the adoption of technologies such as cloud computing will enable suppliers to reduce their internal computing hardware requirements for operations such as CAD and CAM. This can, in turn, enable them to reduce their operating costs, thereby suppliers can offer products at lower rates to buyers.

Buyers need to evaluate the in-depth expertise of suppliers in the Discrete Components industry. This can be assessed by considering factors such as the years of experience, number of resources that have multi-year experience of working in the same industry and at least 3 to 5 credentials for the supplier.

Competitive bidding as a cost optimization tool is extremely potent but should be carefully deployed only when there is no significant differentiation among Discrete Components suppliers.

Discrete Components procurement managers also need to proactively identify and mitigate potential risks that can arise in the supply chain or contracts for Discrete Components procurement. Some examples include: