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A Case Study in Global Supply Chain Risk Management: How AGCO Implemented an SCRM Solution to Save Millions
Technology Category
- Analytics & Modeling - Big Data Analytics
- Functional Applications - Enterprise Resource Planning Systems (ERP)
- Platform as a Service (PaaS) - Data Management Platforms
Applicable Industries
- Agriculture
Applicable Functions
- Procurement
Use Cases
- Supply Chain Visibility
Services
- System Integration
- Data Science Services
- Training
The Challenge
AGCO faced significant challenges in managing its fragmented procurement function, which was spread across multiple business units. External events such as earthquakes disrupted the supply base, leading to a lack of teamwork and collaboration among buyers. This resulted in internal competition for the same suppliers, causing inefficiencies and increased costs. The company recognized the need for a more effective approach to secure supplier capacity and mitigate risks, prompting a shift towards a center-led Supply Chain Risk Management (SCRM) strategy.
About The Customer
AGCO is a global manufacturer of agricultural machinery based in Duluth, Georgia. The company has a rich history, tracing its roots back 100 years, and was officially formed 25 years ago. AGCO operates primarily in North America, Brazil, Western Europe, China, and India. With an addressable procurement spend of around $7 billion, AGCO's procurement organization comprises about 250 people, managing 25 direct commodities and working with approximately 6,000 suppliers. The company's procurement function was previously fragmented across multiple business units, leading to challenges in managing external disruptions and supplier relationships.
The Solution
AGCO implemented a comprehensive SCRM solution developed by riskmethods. The solution included internal organizational changes, such as adopting a matrix structure with category owners having regional or cross-enterprise roles. A risk manager position was created, and supply base analysis was conducted to develop suitable risk mitigation strategies. Supporting software tools enabled automated visibility and risk analysis. The new approach integrated SCRM and Supply Risk Network into daily operations, providing 100% automation, multi-tier supply base visibility, and full visibility of various risks. The solution also included mobile technology and high user acceptance through ease of use.
Operational Impact
Quantitative Benefit
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