E-Procurement Tools: 9 Benefits for Metals Industry

In the metals industry, e-procurement solutions can provide valuable insights, mitigate risks, promote sustainability, foster collaboration, and enhance supply chain visibility. By leveraging these tools to elevate your procurement processes, you can achieve optimal outcomes. Explore the potential of e-procurement solutions tailored to meet the specific needs of the metals industry.

In today's fiercely competitive business environment, organizations across various industries are constantly seeking ways to optimize their operations and reduce costs. The metals industry, being one of the largest and most complex sectors, heavily relies on a multitude of inputs such as raw materials, equipment, and skilled labor. To tackle the challenges unique to this industry, the adoption of e-procurement tools & technologies has emerged as a crucial strategy for driving performance improvement and cost savings. This essay aims to explore the benefits of leveraging procurement tools within the metals industry, shedding light on how these tools have transformed the procurement landscape.

What are the benefits of using procurement tools in the Metals Industry?

Cost Reduction : Procurement tools can help companies in the metals industry to reduce costs by optimizing their procurement processes and negotiating better prices with suppliers. For example, Rio Tinto implemented a procurement tool that enabled them to reduce their procurement cycle time by 35% and achieve savings of $2.2 billion. According to a report by McKinsey, procurement tools can help companies to reduce their procurement spend by up to 5-10%.
Improved Efficiency : Procurement tools can help companies in the metals industry to improve their efficiency by automating manual processes and streamlining their operations. For example, Tata Steel implemented a procurement tool that enabled them to reduce their procurement cycle time by 50%. According to a report by Deloitte, procurement tools can help companies to achieve up to a 40% reduction in their procurement cycle time.
Regulatory Compliance : Procurement tools can help companies in the metals industry to ensure compliance with regulations and standards, which is particularly important due to the potential environmental and safety risks involved. For example, Alcoa implemented a compliance management tool that enabled them to reduce their non-compliant purchases by 35% and achieve savings of $20 million. According to a report by Deloitte, compliance management tools can help companies to reduce their risk exposure and improve their overall compliance performance.
Better Supplier Management : Procurement tools can help companies in the metals industry to manage their suppliers more effectively, which can lead to better quality and reliability of supplies. For example, Rio Tinto implemented a supplier performance tool that enabled them to improve their supplier performance by 10%. According to a report by Everest Group, procurement tools can help companies to achieve better supplier management by providing better visibility into supplier practices and enabling them to make more informed sourcing decisions.
Enhanced Data Analytics : Procurement tools can help companies in the metals industry to gain better insights into their procurement processes and supplier performance, which can lead to improved decision-making. For example, Tata Steel implemented a spend analytics tool that enabled them to identify cost-saving opportunities and achieve savings of $11.2 million. According to a report by Forrester, data analytics tools can help companies to achieve better business outcomes by providing real-time data and insights.
Risk Management : Procurement tools can help companies in the metals industry to manage risk more effectively by identifying potential risks and taking steps to mitigate them. For example, ArcelorMittal implemented a supply chain visibility tool that enabled them to reduce their inventory levels by 15% and improve their on-time delivery by 10%. According to a report by McKinsey, procurement tools can help companies to achieve better risk management by providing real-time data and analytics.
Improved Sustainability : E-Procurement tools & technologies can help companies in the metals industry to improve their sustainability by selecting suppliers who meet certain environmental and social responsibility standards. For example, Rio Tinto implemented a sustainability tool that enabled them to identify 50 suppliers who required additional sustainability support. According to a report by Everest Group, procurement tools can help companies to achieve their sustainability goals by providing better visibility into supplier practices and enabling them to make more informed sourcing decisions.
Improved Collaboration : Procurement tools can help companies in the metals industry to improve collaboration among stakeholders, such as procurement teams, suppliers, and other departments within the organization. For example, Tata Steel implemented a collaboration tool that enabled them to streamline communication between stakeholders and reduce their cycle time by 30%. According to a report by Deloitte, collaboration tools can help companies to achieve better cross-functional collaboration and break down silos within the organization.
Enhanced Supply Chain Visibility : E-Procurement tools can help companies in the metals industry to gain better visibility into their supply chain, which can lead to improved decision-making and risk management. For example, Alcoa implemented a supply chain visibility tool that enabled them to reduce their inventory levels by 10% and improve their on-time delivery by 5%. According to a report by Forrester, supply chain visibility tools can help companies to achieve better visibility into their suppliers' practices and ensure compliance with regulations.

FactWise is a unified E-procurement platform with a fully integrated suite of procurement products. The platform is used by global product manufacturing companies to transform their procurement organization via analytics and automation to reduce costs, improve supplier diversity and strengthen supplier relationships, mitigate risk, meet ESG goals and standards, and increase oversight and efficiency.  

At FactWise, we are committed to building truly distinctive procurement software solutions that delight users and provide sustainable positive impact to the organizations we serve. We do this by providing transparency and insights to leaders (31% increase in governance), streamlining and automating processes to improve efficiency (20% increase in efficiency), and driving bottom-line impact by unlocking savings potential (25% cost reduction for direct spend). 

Companies in the metals industry should consider implementing e-procurement tools & technologies to improve their procurement processes and drive better business outcomes. By adopting tools like FactWise Source-to-Pay, companies can achieve greater efficiency, reduce costs, manage risk more effectively, and improve sustainability, while building stronger relationships with suppliers and enhancing collaboration across their organizations.

Stawan is the founder and CEO of FactWise. Before founding FactWise, Stawan was the NA TMT-Procurement Leader at McKinsey. Passionate about procurement, Stawan has 15 years’ experience in enabling clients of all sizes to achieve business impact via procurement.