Shafts Market Procurement Intelligence Report

The market for Engineering Components and its sub-segments such as Shafts 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.

Suppliers of Shafts 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 Shafts. 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.

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.

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

Shafts procurement best practices are moving towards a level of sophistication which is typically seen in traditional procurement categories. Category managers now have an attractive opportunity to adapt the best practices seen within this category as well as those being leveraged in other non-related categories. This report summarizes the best practices picked from across multiple categories that could work well for category managers involved with Shafts procurement strategy.

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 Shafts 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 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.

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