VEHICLE PARTS (HME) Market Procurement Intelligence Report

The market for Industrial Goods and its sub-segments such as VEHICLE PARTS (HME) are at an interesting intersection. Suppliers of VEHICLE PARTS (HME) 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 VEHICLE PARTS (HME). 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.

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.

Procurement costs for VEHICLE PARTS (HME) are highly impacted by an increase in the costs associated with the value chain of VEHICLE PARTS (HME), 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 Additionally, outdated assets are also increasing the cost for suppliers.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 VEHICLE PARTS (HME) 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 VEHICLE PARTS (HME). 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 must have a clear understanding of the subcontracting policies, if any, of VEHICLE PARTS (HME) suppliers. Factors such as cost incurred, service quality, adherence to timelines, and regulatory compliance of subcontractors employed by suppliers should be carefully assessed prior to engagement.

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.

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