Cutting Tools Market Procurement Intelligence Report

Several macro changes in the dynamics of overall Tools as well as Cutting Tools procurement trends are poised to change the business practices and procurement thumb rules. Technology is improving productivity and creating fresh demand. Convergence of data science, automation tools, 3D printing, robotics, AI and big data has opened up multiple possibilities to better serve customers at a lower operational cost.

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.

Category managers need to take note of the potential of these developments and reassess the changes required in their procurement practices.

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

For example, 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.

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.

Buyers should invest in benchmarking studies that help category managers to improve their knowledge on market pricing or billing rates of service providers. This helps them to not only save costs but also increase their negotiation power.

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