Industry Perspective

Competing in a highly volatile economic environment poses challenges for manufacturers of equipment.

dotted_line_divider

Overview

The industrial manufacturing sector is large and diverse, but most sector players face similar issues:

  • Limited visibility & control of strategic commodity inputs.
  • Fragmented spend across a highly distributed external (global) supply base.
  • Sub-tier supplier financial instability.
  • Part input material price variability.
  • Consolidation of Raw Material Sources.
  • Commodity price volatility

The tightened credit markets are having a large impact on their customer and suppliers alike.

Controlling critical cost drivers

Like most of the manufacturing sector, OEM’s need to ensure that they are managing sub-tier spend on parts and commodities. This includes the need to carefully monitor and manage the risk of supply interruptions caused by the credit risk of their external partners and suppliers, and the subsequent interruption of supply by upstream material producers. With raw material inputs representing anywhere from 25 percent to 75 percent of finished part costs, it’s imperative to understand the cost drivers affecting the materials that flow into their purchased parts, and actively control and coordinate how materials are selected, sourced, and processed by throughout the extended supplier network.

How Newview can help

OEM’s can re-take control of their part purchasing process with Newview’s Coordinated Network Procurement product featuring the ‘Buy-Sell’ or ‘Resale’ solution. This web-based technology solution allows OEM’s to leverage their aggregate spend on behalf of their value chain by purchasing the raw materials or parts directly from the primary source source and resell the volume to their external partner and suppliers. This is achieved without the OEM assuming physical or financial inventory exposure. CNP provides for payment by “netting” or “setting off” payments against deliveries of finished parts, components and assemblies from their sub-tier suppliers. This process returns visibility to the purchasing process, and eliminates the adverse cost and risk of deteriorating supplier credit.

Newview’s Coordinated Network Procurement & ‘Buy-Sell’ Process (click on image to enlarge).

Newview provides this capability through a variety of options. CNP can be delivered as a traditional software product, as a hosted ‘on demand’ (SaaS) solution, or as a Business Processing Outsourcing solution as a fully outsourced service through one of our business partners. CNP is proven product that has been successfully implemented on a large scale by leading manufacturing companies in adjacent industry sectors.

Visit our results page to learn more.