Machinery and Engineered Products

The fluctuating order volumes, reduced internal value generation, heightened competitive pressure, and more intricate interconnections of value creation processes are placing increasing pressure on manufacturers of machines and plants. In response to these challenges, the role of procurement has progressively gained importance in recent years.

 

Unstable starting conditions and growing competitive pressure

Manufacturers of machines and plants are currently encountering several challenges that are critical to their profitability. Above all, they must deal with highly fluctuating order volumes, while batch sizes are becoming smaller, making the processes significantly more complex. This complexity is further exacerbated by the reduction in internal production scope and a more intricate interconnection of value creation structures.

The pressure of competition and costs has also been steadily increasing in recent years, particularly due to the strong competition from companies in Asian countries, which have become major competitors in the field of innovation. Additionally, rising raw material prices and tight supplier markets contribute to this challenge.

Transform your procurement into a value driver

Companies in the mechanical and plant engineering sector primarily thrive on their technical innovations and solutions. Therefore, engineering naturally holds a high priority within the company, especially for traditional, medium-sized enterprises. An efficient procurement organization can also contribute significantly to the company's success and enhance its overall resilience.

With our extensive industry expertise, we help your procurement function establish itself as a value driver. In our projects, we take a cross-functional approach, utilizing various technical methods alongside commercial levers for optimization. Additionally, we assist you in the area of Indirect Spend, which is often overlooked based on our experience.

Learn more about electrical engineering

 

 

Raw Materials White Paper 2024

Future-Proof Raw Material Management

The KGM Strategy Raw Material Study 2024 reveals essential insights on how businesses are addressing rising costs, geopolitical challenges, and the increasing importance of sustainability in procurement.

 

Navigating today’s volatile markets requires a dynamic and proactive approach to cost management. We develop tailored cost optimization programs, helping uncover opportunities in direct spend and ensuring alignment with your strategic goals. From sourcing strategies to supplier negotiations, and from auctions to global sourcing projects, we provide end-to-end support. We make use of recognized industry indices to identify optimal buying times and secure favourable raw material conditions.

Engineering excellence requires precision cost management. We can optimize your cost structures using advanced methodologies, such as target costing, linear performance pricing and design-to-cost analysis. Our expertise extends to redesign, harmonization, and standardization projects, delivering significant value in mechanical and plant engineering by aligning your technical levers with your strategic goals.

Indirect spend is a key area for driving operational efficiency. We can help you establish optimal operating models, implement governance processes and develop strategic category management. Utilizing proven methods, like demand and tail-end management, we streamline indirect procurement and align it with your broader business objectives to deliver measurable results.

 

Learn more about indirect procurement

Deciding between in-house production and outsourcing requires strategic clarity. With our extensive benchmark database and deep supplier market knowledge, we can guide you through make-or-buy analyses. For outsourcing, we identify the ideal partners and can support you from strategy development through contract finalization, ensuring alignment with your operational goals.

We can help you with the digital analysis of your costs, the conversion to e-sourcing and the digitalisation of your processes. In doing so, we can identify the optimal tools for you and support the implementation process in your company. In addition to classic purchasing tools, we’re also able to provide cross-functional support – including interfaces to engineering through the introduction of tools that enable additional technical levers

 

Learn more about digital procurement

In today’s volatile markets, supply chain resilience is critical for sustaining operational continuity and competitiveness. We can help you establish advanced risk management frameworks that proactively address supply chain vulnerabilities and reduce exposure to disruptions. By evaluating nearshoring options, we can help you enable supply chain diversification, minimize your dependency on distant suppliers and optimize overall cost efficiency. Our approach includes conducting sustainable supplier evaluation processes and fostering innovative partnerships. That helps ensure stable you have supply chains while also unlocking opportunities for innovation and working capital optimization.

 

Learn more about risk and supplier management

Liquidity and flexibility are essential for navigating market uncertainties. We can analyse payment terms, inventory turnover and other working capital metrics to uncover opportunities for optimization. By improving cash flow and operational efficiency, we can help you build the resilience needed to thrive in volatile markets.

 

Learn more about working capital management

 

 

 

Our machinery and engineering insights