Tooling Parts Market Procurement Intelligence Report

Business practices within Tooling Parts market are heavily influenced by changing trends across the category as well as within the broader Engineering Products and Equipment market. Procurement costs for Tooling Parts are highly impacted by an increase in the costs associated with the value chain of Tooling Parts, such as logistics, labor cost and energy. Additionally, outdated assets are also increasing the cost for suppliers.

Markets across the globe are reeling under shortage of professionals and workforce that have relevant skills and training. Minimum wages and stringent regulations are compelling suppliers to increase their employee expenses which are expected to have an inflationary impact on buyers' procurement cost.

Suppliers of Tooling Parts 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 Tooling Parts. 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.

As a result, category managers need to closely monitor the Tooling Parts procurement trends and identify changes required in their procurement environment for the category.

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

For example, Competitive bidding as a cost optimization tool is extremely potent but should be carefully deployed only when there is no significant differentiation among Tooling Parts suppliers.

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 engage with suppliers that have adopted a global delivery model as it reduces buyers' risk. In this model, any disaster/emergency at any operating facility of supplier will result in the work being transferred to a different facility, thereby ensuring continuity of the project and reduced risk for buyers. This model also provides buyers access to skilled labor from across the globe, thereby improving the quality of engineering products provided by the supplier.

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