For private equity firms, the final frontier of procurement and savings influence is often direct materials. Ironically, smaller PE firms with middle market investments are more likely, based on our research and experience, to become involved in making recommendations around sourcing in the following types of direct materials categories: metals (ferrous, non-ferrous, semi-finished, finished, parts, etc.), plastics/resin, packaging, electronics (PCBs, PCBAs, etc.). Because most private equity MDs are very distant from understanding the worlds of manufacturing and design/engineering, few are willing to dive in and consider recommendations to drive savings and risk reduction opportunities in areas that can truly impact production operations and the top line.
Private Equity and Procurement: Building a Lasting Savings Foundation Requires Getting Operational (Part 3) [Plus+]
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