Engine Rebuilding & Remanufacturing Services Market Procurement Intelligence Report

A changing ecosystem within the Operation of Industrial Facilities market also affects the procurement process, cost dynamics and supplier attractiveness for the buyers of Engine Rebuilding & Remanufacturing Services. Suppliers have historically gained handsome margin-on-margin by sub-contracting a part of their work to another contractor. However, Buyers are now delving deep into the business models of suppliers and negotiating hard to avoid further sub-contracting. In cases where it is imperative to sub-contract, category managers are employing should-cost models to keep supplier margins on sub-contracting to the minimal.

Buyers of Engine Rebuilding & Remanufacturing Services are insisting on hard evidence to support cost reduction. Suppliers are responding with elaborate matrix of KPIs that provide managers actionable data on supplier performance and cost savings achieved.

Several macro level trends such as slowing economic growth, trade conflicts, rising wages and technological disruptions have put pressure on managers to reduce their spend on Engine Rebuilding & Remanufacturing Services without affecting the performance.

The report discusses in detail the best practices that have served well the category managers responsible for Engine Rebuilding & Remanufacturing Services procurement.

For example, Buyers must clearly define clauses pertaining to the ownership of sub-contracting services that are not a part of their preferred suppliers' portfolios. This will ensure consistency in the services of sub-contracted firms as well as protection of confidential data.

Investing in benchmarking studies that help category managers enhance their knowledge on pricing or billing rates of suppliers allows them to not only save costs, but also negotiate better with suppliers. For example, while negotiating for bundled services, they can save significantly on a single service by cross-verifying rates quoted by suppliers against industry benchmarks.

Buyers should evaluate the true costs of each product and service within the scope of work for supplier, and also understand the hidden costs associated. This can help them to set accurate targets for cost reduction for their suppliers, and effectively monitor and evaluate their performance against industry benchmarks.

Engine Rebuilding & Remanufacturing Services procurement managers also need to proactively identify and mitigate potential risks that can arise in the supply chain or contracts for Engine Rebuilding & Remanufacturing Services procurement. Some examples include: