Compressed Air Market Procurement Intelligence Report

The market for Non-Medical Chemicals Minerals and Gases and its sub-segments such as Compressed Air are at an interesting intersection. 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.

Regulatory guidance on data protection and increasing concern over cybersecurity have increased the costs for suppliers as they incur additional spend on compliance and security. These additional costs have a potential to drive marginal increase in prices across the key geographies.

Suppliers of Compressed Air 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 Compressed Air. 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.

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

As market conditions become more dynamic and procurement practices get more sophisticated, category managers need to be cognizant of the best practices that work for their Compressed Air category procurement. The report offers a succinct analysis of Compressed Air procurement best practices.

For example, Buyers should engage with suppliers that repurchase used products at fair market value. This assists buyers to dispose of used products in a convenient manner. Also, during such repurchases, suppliers provide credits to buyers for future purchases. This reduces overall procurement costs for buyers.

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.

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