LONDON--(BUSINESS WIRE)--According to the latest procurement intelligence report from Technavio, the global aluminum market is expected to grow at a CAGR of 5.3 % over the next five years due to the rise in use of aluminum in the construction of buildings, cans, and production of cars among others.
The research report titled ‘Global Aluminum Market: Procurement Market Intelligence Report 2017-2021’ provides an in-depth analysis of category spend, best procurement practices and cost saving opportunities, aimed at helping organizations achieve superior business performance. The report also provides insights on pricing, supplier positioning and top companies, enabling sourcing professionals to improve their competitive advantage through procurement excellence.
“During the forecast period, the aluminum market will be driven by predominant use of aluminum in secondary sectors such as automotive, construction, and packaging,” says lead Technavio procurement specialist Angad Singh for category spend intelligence. “In addition, population growth and urbanization is driving demand for cars, residential infrastructure and consumer goods which will further drive the market,” adds Angad.
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Cost saving opportunities in the aluminum market
The adoption of various cost-optimization levers helps buyers of aluminum realize direct cost savings and enhance category management and value benefits (including reduced procurement complexities).
Technavio procurement experts have segmented the cost saving opportunities in the aluminum market into the following value-enhancement opportunities:
- Adoption of technology
- Supplier Competition
- Adoption of negotiation strategies
- Optimization of procurement practices
- Bundling of services
Adoption of technology saving aspects
Adoption of technology to provide aluminum that meets the shape, size, and product specifications of buyers, in a cost-efficient and environmentally sustainable manner. For instance, aluminum used in packaging and aerospace is in the form of sheet and plate whereas when it is used in equipment and machines it is in the form of rods and bars.
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Optimization of adoption of negotiation strategies saving aspects
Buyers can negotiate on factors such as price per unit or quantity procured and through adoption of direct purchasing processes by avoiding intermediaries. Buyers should also identify risks associated with the procurement of aluminum and negotiate sharing of liabilities such as shipping arrangements and damage during transit period.
Bundling of services saving aspects
One of the most opportunistic strategic cost saving levers in the global aluminum market is the need for consolidation. Suppliers should be vertically integrated as such suppliers have more control over their supply chain because they have their own source of raw materials such as bauxite mines and power plants.
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Technavio analysts employ primary as well as secondary research techniques to ascertain the size and vendor landscape in a range of markets. Analysts obtain information using a combination of bottom-up and top-down approaches, besides using in-house market modeling tools and proprietary databases. They corroborate this data with the data obtained from various market participants and stakeholders across the value chain, including vendors, service providers, distributors, re-sellers, and end-users.
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