Transforming Healthcare Procurement Strategies for Cost Savings
Transforming Healthcare Procurement Strategies for Cost Savings
Indirect spend categories, such as MRO, office supplies, and logistics, are often overlooked by pharmacos as sources of potential savings. Yet, by improving their procurement process, they can unlock millions of dollars in hidden value and enhance their resilience. How can they achieve this?
The solution is MRO supply chain optimization. Pharmacos must standardise the practices, measure the performance, and use the appropriate tools and systems to manage the MRO supply chain. The question is not whether companies can afford to improve their procurement process, but whether they can afford not to.
How does this work? Let’s find out in this blog; we’ll explore how adopting smarter procurement solutions by optimising the MRO supply chain can help Pharmacos cut costs.
MRO Supply Chain Optimization for Cost Efficiency
McKinsey estimates the pharma industry will lose an average of 24% of one year’s EBITDA every ten years.
How can such losses be reduced? Consider the following strategies and their benefits:
Strategic Supplier Management
Managing supplier relationships enable pharmacies to build long-term partnerships and gain greater negotiation power. It can save cost by helping you identify multiple procurement sources and reducing reliance on one supplier.
Plus, MRO supply chain optimization can also help improve supplier performance, reduce risks, and benefit from economies of scale by establishing a clear governance structure. It can also segment suppliers based on criticality, spend, performance, and risk and develop customized strategies for each segment.
Maximizing Cost Control
Organizations can control purchase demand by minimizing consuming or procuring superfluous products. This reduces costs by lowering expenditures, eliminating waste, streamlining inventory levels, and aligning purchase decisions with clinical requirements and evidence-based practices.
MRO supply chain optimization can assist by improving data analytics and providing visibility into MRO inventory, consumption patterns, and supplier performance.
Transforming Inventory Control
A way to improve inventory control and visibility is to centralize e-procurement and leverage technology for 100% spend management visibility, automated reports, and spending trend tracking.
This can help you save costs by streamlining your purchasing process, increasing compliance, and enhancing data quality and accuracy.
Additionally, MRO supply chain optimization can identify opportunities for improvement by using analytics tools that provide real-time visibility into spend patterns, inventory levels, and supplier performance and enable optimization and innovation.
Procure Smartly with Moglix
The healthcare industry is facing unprecedented challenges, which has disrupted the global supply chains and increased the demand for essential medical supplies. In such a scenario, pharmacos need to adopt smarter procurement strategies that can help them save costs, ensure quality, and enhance resilience.
While supply chain risks are unavoidable, pharmacies can minimize their disruptive effects by adopting smart procurement solutions — and leading companies have succeeded in doing just that.
A case in point is a leading vaccine manufacturer from India, which faced high inventory holding across all plants and volatile monthly MRO procurement spend due to the fragmented supplier base for MRO goods.
By using Moglix Business’ digital platform and analytics capabilities, the company could streamline the procurement process, reduce costs by 10%, and ensure the timely delivery of critical supplies. If you want to learn more about how Moglix can help you make your supply chains more resilient, click here to schedule a demo.
Unlocking the Digital Potential of the Chemical Industry
Unlocking the Digital Potential of the Chemical Industry
According to a report by ABI Research1, the chemical industry will spend over $4 billion on digital transformation technologies in 2023 and $7 billion by 2031. This, in turn, makes operations smoother, costs lower, and helps meet customers’ demands.
But how can digital transformation solutions such as the Internet of Things (IoT), artificial intelligence (AI), and data analytics help chemical companies optimize the MRO supply chain? Continue reading to find out.
Unlocking Advantages of Digital Transformation
Technology can help chemical companies improve research and development, optimize production processes, and improve safety and compliance. Plus, it can help create new value propositions for your customers. Here’s how:
AI and machine learning:
- To help chemical companies automate tasks, provide insights into how chemicals react, and improve manufacturing environments.
- AI models can predict the quality of a product based on the parameters you set. This could reduce the need for product inspection and ensure consistent product quality.
- AI can analyze data from production operations to help streamline operations and improve product quality, accelerating innovation.
IoT:
- To monitor and optimize production processes and track inventory and shipments in real-time.
- They can also help predict raw material shortages.
- Predictive maintenance can also prevent unplanned downtime and optimize production efficiency.
Data analytics:
- It can help gain insights into their operations, identify improvement areas, and make data-driven decisions.
- You can use historical data, market trends, and other factors to forecast demand, reduce inventory carrying costs, and reduce stockouts.
- Ensure and monitor conformity with government regulations, reducing the risk of penalties.
Digital supply chain management solutions:
- It can help chemical companies achieve faster, more flexible, personalized customer experiences. They can also enable real-time decision-making and granular visibility into the supply chain.
- Plus, digital platforms can enable seamless communication and collaboration with suppliers, ensuring timely deliveries and reducing disruptions.
- Some examples include supply chain planning software, which can bring financial, commercial, and supply chain plans and forecasts together. Or clever manufacturing systems that use advanced digital technologies to automatically improve production and supply chains.
Conclusion
Digital transformation can greatly improve the chemical industry’s efficiency and profits. It helps with better decisions, automated processes, and data analytics. This can improve EBITDA by 8.5–16 percentage points2. A case in point is India’s major chemical company that worked with Moglix’s digital solutions to achieve similar results.
Moglix brought together 150+ sellers and brands for the company, organized 2500 line items, and introduced a vendor management inventory (VMI) to ensure vendors delivered on time. As a result, they delivered on time 95% of the time, reduced procurement time by 15%, saved 20% on order processing, and cut costs by 6% by standardizing prices and spending less on shipping (1% less).
To learn more about how Moglix can help your business go digital, request a demo. We’ll show you how our platform improves buying and supply management, reduces costs, improves quality, and boosts customer satisfaction.
Forging Solutions: Procurement Challenges in Metal Industry
Forging Solutions: Procurement Challenges in Metal Industry
Amidst global supply chain disruptions, market volatility, and raw material shortages, the metal and steel industry looks at a challenging procurement scenario. As per McKinsey1, steel demand outlooks have been revised from 2.7 to 1.2% for 2022 and 2023, respectively.
Steel producers should optimize their procurement sourcing strategies to secure the best quality and price while minimizing over- and under-stocking risks. One of the ways to achieve this is by using MRO procurement software, which can help streamline the purchasing process of maintenance, repair, and operations (MRO) items.
How? Continue reading to understand how a robust procurement management system can help the metal and steel industry navigate procurement challenges.
Maximize Your Potential with a Procurement Software
Procurement software is a cloud-based solution with features such as real-time collaboration tools and predictive analytics to monitor supply chain risks and opportunities.
Businesses use a procurement management system to centralize and automate the procurement process on a single platform, from sourcing to payment.
Here’s how procurement software can help your metal and steel companies navigate procurement challenges:
- A procurement management system can centralize and automate the procurement process — from sourcing to payment — on a single platform. This can reduce manual errors, save time and resources, and improve your visibility and control over your supply chain.
- It can optimize your procurement sourcing strategies to secure the best quality and price for the inputs while minimizing the risks of overstocking or understocking. Plus, it can streamline the purchasing process of MRO items and prevent duplicate sourcing, lowering inventory costs.
- Procurement software can enhance your operational efficiency and make your supply chain resilient by enabling faster and more flexible responses to changing market conditions, customer demands, and regulatory requirements.
- Your procurement software can provide data-driven insights, helping you identify the best suppliers and negotiate the best deals. Plus, features like advanced text analytics, digital simulations, and optical character recognition can help you improve contract compliance.
Conclusion
Moglix can help you with these benefits by providing various solutions tailored to your needs and challenges. Its MRO procurement software is a cloud-based platform that enables you to streamline the purchasing process of MRO items. It helps reduce costs, consolidate the vendor base, and maintain consistent procurement KPIs across sites.
Recently, Moglix enabled the procurement of structural steel, safety goods, and electricals & cables for the Central Vista Project. It consolidated 30 vendors, reduced the turnaround time to 7 days, and saved 10% in material cost by enabling the source-to-site supply chain for 90% of the required safety groups.
If you want to explore how Moglix can help you navigate the procurement challenges in the metal and steel industry, you can book a meeting with us here.
The Power of Data Analytics in Inventory Optimization
The Power of Data Analytics in Inventory Optimization
Inventory is one priciest asset for any business, usually costing between 7%–16%, including the weighted average cost of capital. This means you have the room to optimize inventory to avoid unnecessary expenses and improve profitability. But how can you do that effectively?
The answer lies in data analytics.
It includes transforming raw data into insights that help businesses make better decisions. Applying data analytics to inventory management can enhance your demand forecasting, help identify trends and patterns, and optimize inventory levels across the supply chain.
How? In this blog, we will explore how data analytics can help businesses achieve inventory optimization, one of the key objectives of MRO procurement.
Potential of Data Analytics in Inventory Optimization
As per McKinsey1, applying data analytics to inventory management can reduce lost sales by 65%, due to improved data forecasting abilities.
Some other benefits are as follows:
- Optimizing inventory levels can reduce the amount of capital tied up in inventory, as well as the costs of storage, handling insurance, and obsolescence, thereby reducing inventory costs by 30–50%2.
- Businesses can also prevent stock outs by using real-time data and analytics to monitor inventory availability, demand fluctuations, and supply chain disruptions.
Data visualization and optimization techniques can help you reduce waste, increase productivity, enhance quality, and foster innovation. This can give you a competitive edge, increase customer satisfaction, and achieve higher profitability.
Optimizing Supply Chain using Data
Supply chain solutions providers use data analytics by offering end-to-end services including data collection, integration, analysis, visualization, and optimization. Here’s how these techniques can help your business:
- Demand Forecasting: Businesses can use advanced analytics and machine learning to generate more accurate and granular forecasts for the short-term demand of products.
- Identify Trends: By leveraging data visualization and predictive analytics, you can identify trends in inventory performance, such as variability, seasonality, excess, and obsolescence. This can help you improve inventory planning, allocation, and replenishment strategies while reducing waste and inefficiencies.
- Optimize Inventory: You can also use data science and optimization techniques to determine the optimal levels for each product, location, and channel. This can help you minimize inventory holding costs, maximize inventory turnover, and enhance customer satisfaction.
Conclusion
Over 80% supply chain professionals believe analytics will play an important role in reducing supply chain costs. That’s why many businesses rely on supply chain solutions providers such as Moglix that can help you achieve significant savings and efficiencies through digital transformation of their indirect procurement.
For instance, Moglix enabled an FMCG conglomerate to unlock 4% savings on total cost of ownership by introducing catalog-based buying and streamlining their procurement process. If you want to learn more about how Moglix can help you leverage data analytics for inventory optimization, schedule a demo with us today.
Corporate Gifting 101: A Quick Guide
Corporate Gifting 101: A Quick Guide
The corporate gifting market in India is worth $2.5 billion, and is increasing at a rate of 200% annually. This surge in demand proves that corporate gifting works in encouraging repeat business, strengthening client relations, and retaining employees.
Corporate gifting is the act of touching base with employees, clients, or prospects viaa gift such as a personalized piece of clothing, or an eGift card. However, it’s not as simple as it sounds because a lot goes behind the scenes — budgeting, brainstorming, sourcing, and delivery.
So, how can you successfully leverage corporate gifting to drive these results? Continue reading as we discuss this and share the latest corporate gifting trends.
Planning for a Successful Corporate Gifting Program?
The first step in planning your corporate gifting program is determining the purpose of the program. Start by asking yourself these questions:
- What are your gifting objectives?
- What type of items do you want to gift?
- Is it budget-friendly or eco-friendly?
- What kind of story do you want your corporate gift boxes to tell?
- How can you make a long-lasting impression?
Once you have answered these questions, start with deciding on the budget and choosing the perfect gift.
Budgeting
To establish the budget for corporate gifts, you need to start by figuring out how much you can afford to spend. This depends on various factors such as:
- Your company’s size
- Your company’s total sales
- The number of people you intend to give gifts to
- Delivery locations — pan-India, international, or limited to one state?
Also, as a general rule of thumb, you should always keep some of your budget aside to cover unforeseen expenses. It’s always better to have too much than not enough because once the results of a gift campaign start to show, the lists of recipients tend to grow.
Sourcing
To help you make a more informed decision, here are some factors you should consider when choosing your corporate gifting partner:
- Wide range of high-quality gift options
- Premium quality gifts ensured.
- Cater to various budget ranges
- Bespoke tailor made gifts
- Eco-friendly gift options available
- Ease of Ordering
- Place orders for multiple recipients at once
- On time every time, anywhere in India
- Customized and personalised packaging
- Track orders, manage deliveries, and generate reports
- Ability to manage last minute order modification
- Responsive customer service to address queries
- Ensuring the protection of personal and corporate data
Last-Mile Delivery
Last-mile delivery refers to shipping items from the closest distribution hub to the final destination, such as the employee’s house. If a present is not delivered on time or in proper condition, the recipient may be disappointed and frustrated, negatively impacting your reputation.
Therefore, when choosing a corporate gifting platform, ensure they offer features such as last-mile delivery and pan-India shipping, among others.
Latest Trends in Corporate Gifting
Data suggests that the top five corporate gifts include gift baskets (48%), company-branded products (46%), and experiences like movies and sporting events (39%)
Here are some more trending gift ideas that you can follow:
- Eco-friendly gifts: You could link your gifting program to your environmental, social, and governance (ESG) practices, as eco-friendly gifts get the company’s positive reviews from over 45% of employees3. Some examples include desk plants, reusable tumblers, and plantable gifts.
- Food gift hampers: Corporate food gift sales crossed over $30 billion recently, indicating a rising trend. Savory and salty treats are also becoming increasingly popular.
- Personalized gifts: Market growth of 400% over the last few years indicates increased popularity of corporate gifts tailored to the recipient’s interests. For example, you can give your employees notebooks personalized with their names.
Plan Corporate Gifting Program with Moglix
Moglix brings to you the ultimate in corporate gifting, with our extensive range of products that cater to every need and budget. From timeless classics to modern innovations, our collection is thoughtfully curated to represent your brand’s distinct identity. With nationwide delivery, no location is out of reach. Make your gesture truly memorable and meaningful, whether it’s a grand statement or a heartfelt token. Choose us for a gifting experience that reflects excellence and care. Plan your corporate gifting program with Moglix to streamline your corporate gifting process.
Harnessing Technology for Automotive Supply Chain Optimization
Harnessing Technology for Automotive Supply Chain Optimization
In the aftermath of the COVID-19 pandemic and the Russia-Ukraine war, the global microchip shortage has already garnered a lot of attention, with several automotive companies that follow just-in-time (JIT) manufacturing, having halted their assembly lines and production.
However, it has obscured the fact that the automotive industry involves a complex web of interdependent supplier relations spread across geographies, which entail their own set of challenges, including poor visibility, inventory shortages, and compliance mandates.
Below, we elaborate on the several barriers disrupting the automotive supply chain and how they can be overcome by leveraging technology.
Using Technology to Mitigate Automotive Supply Chain Risks
The ruthless drive to improve speed and efficiency and reduce costs has made the automotive supply chain very fragile. By harnessing the vast goldmine of untapped data by drawing on technology such as machine learning (ML), artificial intelligence (AI), the internet of things (IoT), cloud computing, and blockchain, automobile manufacturers can successfully undertake their MRO supply chain optimization, increasing visibility and streamlining compliance.
#1 Challenge: Lack of Supply Chain MRO Visibility
Poor supply chain visibility is the biggest concern of automotive manufacturers, as it disrupts production schedules, increases lead times, and delays delivery to customers.1 In fact, Toyota’s 40% production cut can be traced back to the parts shortages caused by visibility concerns.2
The lack of supply chain MRO visibility is concerning, as first-tier suppliers tend to have an extended global supplier network, which may lead to manufacturers lacking real-time updates on sub-tier suppliers and third-party vendors. For instance, the diamond-shaped chip supply chain involves Tier 1 component integrators, followed by Tier 2 semiconductor providers and Tier 3 wafer manufacturers.
Solution: Optimize procurement and map the multi-tier supply chain on a centralized platform using MRO software. This will allow for easy identification of any significant delays and disruptions. Additionally, blockchain technology can be leveraged to create an immutable record of all movements and transactions. Vehicle parts can further be fitted with IoT sensors for location and condition-based information, which will facilitate proactive maintenance.
#2 Challenge: Overstocked Inventory
With a vehicle consisting of approximately 30,000 components3, managing inventory has been a tall task. While the JIT method and make-to-order approach ensured better inventory management, the supply chain went for a toss during the pandemic, with manufacturers oscillating between inventory excesses and shortages.
Besides, external factors, such as reputational damage due to manufacturing defects, trade and regulatory issues, and environmental concerns, can lead to a sudden fall in demand, as exemplified by the rise in EV production and the popularity of ridesharing platforms.
Solution: OEMs can deploy AI/ML modeling and predictive analytics to gain insights into market trends, demand patterns, and external risks, to ensure their demand forecasts and production schedules are aligned with purchasing trends. Besides, complete supply chain visibility gained through MRO software will help ensure that products are ethically sourced, preventing reputational damage.
Challenge 3: Compliance Mandates
The automotive industry operates in a highly regulated environment with strict compliance requirements with regard to licenses, safety, fire drills, and environmental audits. Indeed, an Indian automotive manufacturer deals with around 489 mandates4 in a single state without accounting for the regulatory fluidity—some conjecture over 40005 regulatory updates across all government websites. With 80%6 of key personnel lacking compliance understanding, automotive companies risk incurring severe penalties.
Solution: Automotive companies can digitize their compliance management, including meeting sustainability and emission norms, by embracing tech-driven supply chain management solutions and platforms.
Leverage Moglix’s MRO Supply Chain Management Solutions for Enhanced Efficiency
Effective management of maintenance, repair, and operations (MRO) activities is essential to minimize production downtime and create a resilient automotive supply chain. It can enable Indian companies to successfully thrive in Industry 4.0, putting them on the road to doubling the size of the auto industry to Rs. 15 lakh crore by 2024.7
Moglix’s MRO software solutions offer a comprehensive suite of tools such as inventory management, procurement automation, and maintenance planning to achieve end-to-end visibility and improve operational efficiency. Its ability to easily integrate into the company’s enterprise resource planning (ERP) allows for thorough MRO supply chain optimization.Moglix’s prowess is on display through its 85% reduction in the order creation cycle of the world’s largest two-wheeler manufacturer, which suffered from legacy ERP issues, poor data quality, a fragmented supplier base, and a lack of spending visibility. Download the case study or get in touch to learn more.
Digitalizing Procurement: Unlocking Efficiency in the Cement Industry
Digitalizing Procurement: Unlocking Efficiency in the Cement Industry
Digital procurement is reshaping the cement industry’s landscape, ringing in a new era of optimization and agility powered by Industry 4.0. Amidst evolving market dynamics, changing consumer demand, and supply chain challenges, cement manufacturers are turning to technology-driven procurement solutions to reduce costs, increase efficiencies, and improve their performance for an added competitive edge.
By digitalizing their supply chain, companies can experience a 20% and 50% reduction in their procurement and supply chain costs, respectively, supplemented with a 10% revenue rise.1Below, we outline the transformative impact of adopting procurement automation on the fortunes of cement companies.
The Power of Automation in Streamlining Procurement Processes
By combining the latest technologies, including artificial intelligence (AI) and the Industrial Internet of Things (IIoT), cement manufacturers can effectively streamline their procurement processes, which are significantly affected by commodity prices, energy consumption, and supplier management. Digital procurement ensures that the cement industry gains holistic visibility into its supply chain, encouraging efficient logistics operations and fostering a resilient, sustainable, and profitable future.
- Enhanced Visibility for Effective Raw Material Procurement
As cement production entails procuring several raw materials, namely limestone, gypsum, coal, and clay, which are spread across diverse geographies and suppliers, ensuring a reliable raw material supply becomes imperative, especially to meet the varying quality standards of different cement types.
To avoid the pitfalls of poor transportation infrastructure, unfavorable weather conditions, and complex government regulations, procurement leaders must adopt digital solutions that enhance supply chain visibility. Real-time tracking can provide end-to-end transparency into the sourcing and delivery processes, ensuring steady flow and enabling production optimization.
2. Improved Inventory Management Down to the Silo
Cement manufacturers are no exception to the uncertainties involved in forecasting supply-demand scenarios. In fact, ensuring there are adequate inventories to meet any sudden demand surge becomes even more significant for companies dealing in both bagged and bulk cement, given the consumer preference for “fresh cement”. Besides, handling coal and the end product’s quality is no easy task.
Procurement optimization assists manufacturers in analyzing their exclusive data sources, including point-of-sale data, stock-outs, pic pack loads, and tracking activities, through predictive analytics. This provides a true picture of customer demand, ensuring better demand forecasting, accurate inventory management, and zero-error predictive plant maintenance.
By embracing procurement solutions such as automated requisitioning, purchase order generation, and invoice processing, cement manufacturers can minimize the scope for manual errors, increase process speed, and undertake better resource allocation.
3. Streamlined Logistics Operations to Meet Demand with Precision
Cement is a high-volume, low-value commodity, which makes handling its logistics complex and costly. Entailing large volumes (cement is bulky) and specialized handling equipment such as bulk carriers and cement tankers, transporting cement efficiently from the manufacturing plant to the distributors becomes essential. Logistics costs also increase when extreme weather disrupts transportation routes and affects cement carriers, thereby requiring maintenance—an even graver concern in remote locations.
IIoT, in conjunction with big data analytics and machine learning, detects operational and logistics inefficiencies by undertaking historical data analysis, thereby enhancing traceability and improving supply chain resilience. By leveraging procurement optimization tools, such as automated tracking and optimized route planning, cement manufacturers can precisely monitor product movement, minimize lead times, and shorten time to market.
4. Seamless Vendor Management for Superior Supplier Relationships
Given the scenario that cement manufacturers must source various kinds of raw materials from different vendors, handling supplier relationships can be daunting. Besides, in the aftermath of the supply chain disruptions caused by the COVID-19 pandemic, maintaining supplier diversity has become even more important. Additionally, with sustainability and ESG compliance becoming all the rage, ensuring that your suppliers are conscious of their footprint makes good business sense.
Cement manufacturers can foster better supplier collaboration and communication by embracing procurement automation solutions. Developing clear metrics for supplier performance evaluation also helps with cost optimization. By leveraging digital technologies, manufacturers can facilitate competitive bidding, ensuring favorable terms are negotiated and a reliable supply chain is established.
Embracing Moglix’s Digital Procurement Solutions to Unleash Higher Efficiency
Adopting digital procurement solutions can truly revolutionize a cement manufacturer’s processes by streamlining its inventory, logistics, and supplier relationships. By harnessing data-driven insights from procurement automation, cement manufacturers can optimize their processes, make informed decisions, and establish agile supply chains.
Moglix’s procurement solutions take this a step further by facilitating the implementation of strategic procurement processes that drive down costs and minimize supply chain risk, as substantiated by the 20% increase in working hour efficiency achieved by a leading cement manufacturer after deploying Moglix’s solutions.
The client had several business challenges, including a fragmented supplier base, non-standardized price and delivery systems, and decentralized platforms, which increased tail-end spending and resulted in data gaps. This not only made it difficult to undertake purchase analytics but also delayed tax filing, causing compliance issues. Moglix automated the procurement processes to deal with the issues of distributed pricing, re-orders, and product duplication, enabling massive cost savings. Download the case study to learn more.
MRO Management Strategies for Manufacturers to Drive Cost Savings
MRO Management Strategies for Manufacturers to Drive Cost Savings
With the majority of procurement initiatives targeted at streamlining direct costs, maintenance, repair, and operation (MRO) costs are often overlooked. 59% of procurement leaders have reported feeling pressured to reduce operational budgets, with another 40% stating the need to improve asset performance.1
This makes reducing unplanned downtime by ensuring all the right parts and equipment are readily available at any given time an absolute necessity. Adopting MRO management strategies can ensure manufacturers proactively deal with procurement risks instead of following reactive maintenance policies.
Top 3 Strategies to Optimize MRO Supply Chain
As manufacturers grapple with several procurement risks, including fragmented supplier base, low spare parts standardization, excessive inventory holding, low catalog usage, and high lead times, reducing indirect costs can feel daunting. Below, we outline the top three MRO procurement strategies that induce cost savings and improve operational efficiency.
Implement Spending Analytics
The global distribution of manufacturing plants paired with a large decentralized user and supplier base entails incurring millions of transactions, which hold massive scope for cost savings. Manufacturers can identify operational inefficiencies within their MRO procurement processes by thoroughly analyzing spending patterns.
Businesses must deploy techniques like ABC analysis to categorize MRO items based on their impact on production and cost to prioritize critical item purchases while reducing costs on lower-value items. To put this into perspective, procurement leaders spend almost 30%2 of their time making manual purchases.
Leveraging data-driven software tools, such as Moglix Solutions, can enable manufacturers to track their spending in real time, acquire actionable insights, and gain alternate product recommendations at better pricing, leading to substantial cost savings.
Introduce Process Transparency
Manufacturing’s MRO supply chain involves several procurement and inventory processes to ensure regular maintenance and replacement of assembly line machines, conveyor belts, and industrial motors. However, such multiple processes also imply multiple error possibilities. For instance, poor visibility into quality and compliance processes can raise procurement costs by 10%.3
Manufacturers must encourage cross-functional collaboration among operations, maintenance, and vendor teams by establishing clear communication channels and documenting detailed procedures for the proper management of MRO procurement processes. By ensuring thorough accessibility and transparency of procedures for all stakeholders, manufacturers can identify and remediate inefficiencies and quality slippage, promote accountability, and enable efficient decision-making, thus contributing to cost savings.
Establish Strong Supplier Relationships
Typically, manufacturers contract with hundreds of vendors to cater to unplanned and unanticipated stockouts and MRO purchases, which forces them to forgo the benefits of high-volume purchases. Hence, strategically consolidating your supplier base and collaborating with them can yield cost benefits. To illustrate, Moglix’s MRO procurement solutions help reduce the supplier base by 80%.4
Manufacturers must establish key performance metrics (KPIs), such as price competitiveness, quality standards, and delivery reliability, to evaluate supplier performance and prune their supplier tail end accordingly. Entering into long-term agreements facilitates better price negotiation and builds trust, which is necessary for cost optimization.
Augment Your MRO Management with Moglix’s Solutions
With Industry 4.0, powered by predictive data analytics, artificial intelligence, and the internet of things, becoming the new normal, harnessing data-driven insights has become intrinsic to streamlining MRO procurement processes. Using a centralized platform, like Moglix’s solutions, can empower manufacturing companies to better detect process deficiencies and maintenance needs, optimize workflows and resource allocation, enhance operational excellence, and gain complete visibility of their MRO supply chain.
To put this into perspective, Moglix helped cut operational costs by 5% for a major EPC company focused on civil and environmental infrastructural development. Faced with the numerous challenges of a fragmented vendor base, exponential inventory holding costs, and poor spending control, it sought to improve process efficiencies by aggregating its remote sites through Moglix’s solutions. Download the case study or get in touch to learn more.
How Technology is Transforming the Landscape of Procurement in Chemical Industry
How Technology is Transforming the Landscape of Procurement in Chemical Industry
MRO procurement (maintenance, repair, and operations) in the chemical industry is not just about purchasing and managing industrial equipment at the lowest cost. It is also about ensuring compliance and sustainability, continuously improving and optimizing, creating value for stakeholders, and fostering innovation.
The chemical industry lacks severely behind the best-performing sectors, such as automotive, when it comes to optimizing the MRO procurement processes (McKinsey). This is worrying since the chemical industry relies heavily on MRO procurement, so much so that the purchasing costs in the industry are equivalent to 50–70% of sales revenues. Therefore, improving procurement processes can significantly impact the chemical companies’ bottomlines — as per a McKinsey analysis, sectors following procurement best practices have a 17% higher EBITDA.
One of the ways to achieve procurement excellence is by adopting modern tech solutions, such as procurement management systems. Such systems can transform the function from reactive and tactical to proactive and strategic. How? Continue reading to find out.
Tech-Driven Procurement in Chemical Industry
Procurement management systems transform the capabilities and culture of the function itself. It achieves this by giving you access to real-time data, tools to analyze it, a dashboard to present information in consumable chunks, and reports to present to the leadership teams:
Enabling you to improve the quality and efficiency of your communication and coordination between internal and external stakeholders.
- These platforms boast features such as real-time data sharing, end-to-end visibility for processes, in-context messaging, and uses AI to identify threats and do damage control.
- This can enhance the quality and promptness of communication, improve transparency, and foster value creation and innovation.
Helping you leverage big data and advanced analytics to tap into market trends, forecast demand, measure supplier performance, and track price fluctuations.
- It can help you monitor the availability and prices of commodities, negotiate from the point of power, and manage risks proactively.
- Spend analytics can also help you analyze spending patterns across suppliers, locations, and business units, giving you room to identify opportunities for cost reduction and consolidation.
Streamlining and automating transactional and tactical procurement activities such as ordering, invoicing, payments, and requisitioning.
- It can reduce manual work, save costs, save time, and increase accuracy.
- It can also help you track inventory levels, track shipments, and optimize logistics.
Conclusion
A robust digital procurement solution empowers chemical companies to make data-driven decisions, transform operations, and boost financial performance. One of the ways to do that is using Moglix’s vendor consolidation capabilities to simplify your procurement across multiple suppliers.
This case study shows how Moglix did this for a leading chemical manufacturer and helped them reduce cost, optimize inventory, and made the supply chain ecosystem more efficient and transparent. Learn more about how Moglix can help you, click here.
How Analytics Drives Efficiency in the Pharma Supply Chain
How Analytics Drives Efficiency in the Pharma Supply Chain
Supply chain disruptions in the pharma industry can cause a potential loss of 25% of EBITDA over ten years, notes a McKinsey report. EBITDA is a key indicator of a company’s overall financial performance, and losing it can be costly and avoidable. How? By using data analytics for MRO supply chain optimization.
Predictive modeling can help pharmacos predict product demand, optimize inventory, and reduce waste and costs. It can help them control and monitor product quality throughout the supply chain. Therefore, data analytics can offer significant value for MRO (maintenance, repair, and operations), supply chain optimization, and patient care.
In this blog, however, we’ll focus on how predictive modeling, or data analytics in general, could help pharmacos with MRO supply chain optimization and eventually minimize costs.
Keeping the MRO supply chain disruption-free
Another McKinsey report shows that a pharma company can achieve 15–30% operating efficiencies over five years by scaling the impact of advanced analytics. While this research focuses on the impact of predictive modeling on new medical therapies, here’s how it can also improve supply chain forecasting:
- Pharmacos can use data they generate and collect throughout their MRO supply chain to further optimize it by leveraging data analytics and digitizing their platforms. This could improve visibility, efficiency, and agility.
- You can streamline and secure the journey of medicines and equipment using data analytics, blockchain, and Internet of Things (IoT) sensors. So if a shipment is delayed, you can detect the problem and take corrective measures before the product reaches the end consumer.
- By anticipating and mitigating the impact of external factors, pharma companies can reduce the risk of disruptions and improve their resilience. For instance, using scenario analysis, you can evaluate the potential outcomes and impacts of different events on your MRO procurement processes.
While data analytics can help pharmacos by improving their supply chain’s visibility, agility, and resilience, what about mitigating the impact on MRO spending? This is where spend analytics come into the picture.
Minimizing Cost Using Spend Analytics
Spend analytics involves collecting, cleansing, classifying, and analyzing cost spending to reduce procurement costs, improve budgeting, and monitor compliance. It can help pharmacos in MRO procurement processes and supply chain optimization by:
- Identifying opportunities for savings by reducing waste or negotiating better prices or terms
- Improving accountability by tracking and measuring MRO spending across business units
- Enhancing supplier management by evaluating performance and benchmarking quality
- Supporting strategic decision-making using data-driven insights to evaluate return on investment and optimize cost-value trade-offs.
Conclusion
In the face of rising regulatory pressures, customer expectations, and costs, analytics is no longer just the source of competitive advantage for the pharma industry. However, success depends on building the right framework and capabilities.
One of the ways to do that is to leverage Moglix’s capabilities, just like this COVID-19 vaccine manufacturer did. Moglix enabled 16 of its plants for just-in-time delivery of MRO goods and replaced
the non-strategic vendor codes with a single point of contact. Click here to learn more about Moglix can make your MRO procurement efficient and financially sound.
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