Analyzing the Process industries

In process industries, the most important direct spend covers the stages and enhancements to produce a good – from ingredient cost to regulatory compliance and availability. The industry is made up of Life Science, Fast Moving Consumer Goods, and Chemicals.

A few of their unique needs are:

• Leverage global spend with shared services, qualify suppliers by plant/business unit/country
• Batch traceability, especially with subcontractors

Process industries is currently dealing with three major challenges:

• Shifting market dynamics drive opportunities for cost management and margins
• Greater risk and regulatory changes increase urgency of managing suppliers and product quality

• New business models depend on global, nonlinear supply chains with tollers, Chief Marketing Officers, contract packagers and other external manufacturers

With SAP Ariba Direct Spend you could:

• Standardize and harmonize sourcing processes globally
• Drive greater visibility across the extended enterprise

• Collaborate with suppliers, tollers, and other partners across key plan-to-deliver processes

For example, Mary’s team utilizes SAP Ariba Supply Chain Collaboration for forecast, order, scheduling agreement, supplier managed inventory, manufacturing visibility, quality, and subcontracting collaboration across multiple tiers of suppliers.

They were able to adopt complete scope of supply chain collaboration across multi-tiered supply chains. This increased speed, traceability, and standardization for forecast, ordering, and scheduling processes. Additionally, it optimized working capital and driving policy compliance with supplier managed inventory and quality collaboration.

The following are examples of direct sourcing customers:

• Nufarm
• Milijen & Company

Dabur India Ltd. is one of India's leading fast-moving consumer goods companies. It is the world's largest Ayurvedic and natural health care company.

By implementing SAP Ariba solutions, Dabur is able to manage more than 350 sourcing events per year, covering 100% of its addressable spend, and benefit from the following improvements:

• Average savings of 6-8% in the first few years
• Centralized process management, helping to consolidate spend management
• Simple onboarding, helping to bring on new suppliers, increase vendor agility, and speed up response times
• Ability to source ingredients across multiple countries, languages, and currencies
• Integration of buying and negotiation processes
• Faster negotiation process, from two to three days to one hour
• Greater transparency and simpler compliance and audit management
• More time for sourcing teams to work on strategic tasks
• Better resource and cost management through an overall culture of e-sourcing

Learn more about SAP Ariba solutions for direct spend in the chemical industry.