Case Studies A Case Study in Global Supply Chain Risk Management: How AGCO Implemented an SCRM Solution to Save Millions

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	A Case Study in Global Supply Chain Risk Management: How AGCO Implemented an SCRM Solution to Save Millions

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	Data Science Services System Integration Training
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. Read More
About 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. Read More
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. Read More Log in to view content
Contents

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

Data Science Services

System Integration

Training

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 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.

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.

Impact #1	AGCO's new SCRM approach provided better sourcing decisions through risk-adjusted Total Cost of Ownership (TCO).
Impact #2	The company achieved sub-tier supply chain risk identification through multi-tier supply chain visibility.
Impact #3	The alignment of category management strategy with supply chain risk exposure was improved.

Impact #1

AGCO's new SCRM approach provided better sourcing decisions through risk-adjusted Total Cost of Ownership (TCO).

Impact #2

The company achieved sub-tier supply chain risk identification through multi-tier supply chain visibility.

Impact #3

The alignment of category management strategy with supply chain risk exposure was improved.

Benefit #1	Avoidance and reduction of crisis costs through reaction time advantage.
Benefit #2	Prevention of price increases.
Benefit #3	Prevention of revenue shortfall.

Benefit #1

Avoidance and reduction of crisis costs through reaction time advantage.

Benefit #2

Prevention of price increases.

Benefit #3

Prevention of revenue shortfall.

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Overview

A Case Study in Global Supply Chain Risk Management: How AGCO Implemented an SCRM Solution to Save Millions

Operational Impact

Quantitative Benefit