Industry benchmarks, cost position analysis, and optimization opportunities
Your cost position relative to industry peers
Your overall procurement cost position places you in the 42nd percentile among manufacturing companies with $500M-$1B revenue. This indicates meaningful opportunities to improve cost competitiveness.
Achieving median performance across all categories would deliver $8.4M in annual savings. Reaching top quartile performance would unlock $14.2M. Four categories account for 72% of the total gap, making them priority targets for cost reduction initiatives.
Your cost position by spend category vs. industry peers
All categories ranked by opportunity size
| Category | Annual Spend | Your Cost % | Median % | Top 25% % | Gap to Median | Opportunity |
|---|---|---|---|---|---|---|
| Indirect Materials | $24.6M | 12.4% | 10.8% | 9.2% | +1.6% | $2.10M |
| Professional Services | $12.8M | 6.8% | 5.9% | 5.1% | +0.9% | $1.51M |
| Logistics & Freight | $18.2M | 8.2% | 7.4% | 6.5% | +0.8% | $1.34M |
| IT Hardware & Software | $12.4M | 5.2% | 4.8% | 4.1% | +0.4% | $890K |
| Facilities & MRO | $8.4M | 4.2% | 3.8% | 3.2% | +0.4% | $670K |
| Marketing & Advertising | $6.2M | 3.6% | 3.2% | 2.8% | +0.4% | $520K |
| Fleet & Travel | $4.8M | 2.9% | 2.6% | 2.2% | +0.3% | $380K |
| Raw Materials | $42.8M | 21.6% | 21.6% | 19.8% | 0% | At Median |
| Packaging | $18.4M | 9.1% | 9.4% | 8.6% | -0.3% | Below Median |
| Utilities | $8.6M | 4.1% | 4.3% | 3.9% | -0.2% | Below Median |
| Capital Equipment | $10.2M | 5.0% | 5.4% | 4.9% | -0.4% | Top Quartile |
5.0% of addressable spend
8.5% of addressable spend
Recommended initiatives to close benchmark gaps
Phased approach to closing benchmark gaps
| Milestone | Percentile | Position | Cumulative Savings |
|---|---|---|---|
| Current State | 42nd | Below Median | - |
| End of Phase 1 (3 months) | 48th | Approaching Median | $2.8M |
| End of Phase 2 (9 months) | 58th | Above Median | $8.0M |
| End of Phase 3 (18 months) | 68th | Third Quartile | $11.4M |
This analysis compares your procurement costs against a curated peer set based on:
Cost percentages are calculated as spend category / total company revenue to normalize for size differences. Opportunity values are estimated using your actual spend volumes applied to benchmark cost rates.