Rack Gearing Market Procurement Intelligence Report

The market for Engineering Products and Equipment and its sub-segments such as Rack Gearing are at an interesting intersection. Suppliers of Rack Gearing are moving up the value chain - both organically as well as through M&As. Their portfolios are increasingly being diversified with the objective of offering integrated solutions that go beyond just Rack Gearing. Even buyers are engaging vendors who can act as a one-stop solution provider across their geographic footprint. Such strategic engagements can help buyers with savings associated with economies of scale and management of a much smaller supplier base.

Customers are expecting service and experience levels which are at par with what ecommerce and consumer sectors of today offer. Moreover, competition keeps intensifying and demand and supply dynamics keep shifting.

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 Additionally, outdated assets are also increasing the cost for suppliers.

Trends like these and many others discussed in this report are necessitating a relook at the way Rack Gearing is procured and the procurement cost saving opportunities that exist.

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 Rack Gearing. To help quick decision making, this report advises on several procurement best practices that have worked well for category managers.

For example, Strong R&D focus is the sign of a supplier committed to enhancing the quality and cost proposition of its solutions. Buyers should collaborate with such suppliers for development of low-cost but highly efficiency products that can bring their OPEX down.

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 should engage with suppliers that have recycling capability. Recycling capability of the suppliers will lower their production costs which will be passed on to buyers. Additionally, the recycling capability will contribute in furthering the sustainability goals of the buyers' organization.

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