It is estimated that one in six metal organizations plan to spend more than 10% of their revenues on innovations.
Over the last couple of years, factors such as the disruptive forces of technology, the threat of new entrants, and political change have started reshaping the metal industry. The industry comprises of establishments engaged in the manufacturing of metals including iron ore, aluminum, base metals, and precious metals. Leading organizations in the metals space are investing highly in technologies to automate operations, drive efficiencies, and improve the quality of the products offered. Although the ferrous metals market is witnessing promising growth, owing to a considerable rise in the demand for metals among the end-user segments such as construction, automobiles, heavy machinery, and equipment, several factors may influence the growth of the market. These include:
- Lack of sufficient labor force: Most developed and developing nations are witnessing a shortage of skills with most workers coming close to their retirement age. This can have an adverse impact on the production capabilities and contractual obligations for leading companies. To address such concerns, ferrous metals manufacturers have to ensure that their workforce is given adequate knowledge and skills.
- Raw materials price volatility: The recent economic slowdown has greatly affected the prices of raw materials used to manufacture end products. It is estimated that the cost of iron has quadrupled from 2002 to 2009. This is a result of the growing demand for iron ore among the Asian regions. It becomes essential for the ferrous metals manufacturers to increase investments to maintain consistency in their product offerings.
- Lack of supply chain visibility: Supply chain becomes a major concern for ferrous metals organizations as they find it relatively important to bridge the demand-supply concerns. A lack of visibility in the supply chain process can hamper the overall operations in terms of planning and execution. So, organizations are finding it necessary to effectively respond to supply chain disruptions while maintaining the quality of the products.
To address such challenges and maintain consistency in their product offerings, organizations are facing the need for a reliable supplier identification and profiling solution. A reliable supply identification solution focuses on managing off-shore sourcing by identifying the cost structures involved in the supply chain process.
The Business Challenge
- The client: A renowned ferrous metal supplier
The client, a prominent ferrous metals supplier, wanted to identify the key suppliers in the market and categorize them based on their strengths and weaknesses. The client wanted to seek ways to engage with the best suppliers and compare their performance against each other. With the help of Infiniti’s supplier identification and profiling solution, the client wanted to identify performance gaps and understand their relative position in the market. The primary concern of the client was to identify the key criteria to assess the potential suppliers and identify suppliers that meet quality and service-level requirements.
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To develop an awareness of the market’s performance, the supplier profiling experts at Infiniti carried out extensive research comprising interviews and discussions with prominent stakeholders in the ferrous metals space. To gain relevant insights into the competitors, the experts also compiled information from a wide array of secondary sources such as trade shows, paid industry databases, and company presentations in the ferrous metals space.
The Solution Benefits and the Business Impact
The supplier identification and profiling solution offered by Infiniti helped the ferrous metals supplier understand the current suppliers and their characteristics. The client was able to understand the pricing models and compare performance against their counterparts. The supplier profiling solution also helped the client create a SWOT analysis to profile the most prominent suppliers and their position in the ferrous metals market. Moreover, the solution also sought ways to understand the potential bottlenecks in terms of purchasing overlaps and prices.
The future of the metals industry will be marked by innovations with automation playing a pivotal role in the production of ferrous metals. Moreover, technologies such as robotics will predominantly drive the growth of the ferrous metals industry to enhance the product quality.