$24M auditable savings with dynamic margin optimization in petrochemicals through sales and procurement collaboration

Key Outcomes

Effective Cross- Function Alignment

Informed decision-making as a result of greater visibility into the planned vs. actual cost structures

Agile Response to Market

Dynamic sales and procurement strategy based on evolving market scenarios

Enhanced Financial Data Transparency

Improved overall EBITDA line tracking and reporting

Margin Erosion Avoidance

Prevented potential loss of margins

Overview

The company struggled with inefficient product allocation and margin losses due to siloed operations. Aligned Automation implemented a dynamic margin optimization Nerve Center, integrating data across functions and utilizing predictive analytics for real-time pricing guidance. This approach led to $24M in auditable savings, optimized product mix and inventory, reduced raw material costs, and improved overall profitability by avoiding margin erosion.

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Challenges

The client faced limited visibility, unreliable data sources, and manual processes, leading to inefficiencies, inaccurate financial results, and challenges in comparing standard to actual production costs.

Lack of visibility driving procurement financial data results
Lack of a true data source for comparison between ideal Standard cost vs actual production data
Cost factors and their variables not easily tracked and accessible
Highly manual tasks between Procurement and Marketing, driving inefficient and inaccurate data for decision-making

Value Delivered

Aligned Automation developed an advanced margin optimization data model and solution to help drive the impressive auditable cost savings for the client:

Cross-Functional Collaboration: alignment between business and sourcing strategies by bringing relevant data points and insights in a single window for better decision-making process
Intelligent and Predictive Data Analytics: developed a forward-looking tool to analyze trends in the change of raw materials mix for a BOM, driving predictive costs and margin analysis
Market Index Data: Integrated raw materials index values with the capability for user adjustments to give a realistic view of future raw material cost and its related impact on finished goods costing

Capabilities

Data & Analytics

Process Transformation

AI & ML

About Client

A Fortune Global 500, one of the largest chemical companies in the world. This $47 billion multinational chemical company employs around 19,000 people and is a global leader in innovation, consistently developing high-quality chemicals, polymers, fuels, and technologies.

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$24M auditable savings with dynamic margin optimization in petrochemicals through sales and procurement collaboration

Challenges

The Approach

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Value Delivered