The Institute for Supply Management (ISM) reports that spend analysis and supply base rationalization weigh heavily on the minds of executives. Spend analysis is primarily performed to identify potential cost savings. It also serves to identify opportunities to consolidate the supply base and to identify maverick spend.
Spend analysis is defined as the process of identifying current spend to determine what is being spent, with whom, and for what.
Supply base rationalization is defined as a conscientious effort to determine the right number of suppliers to do business with. Fewer suppliers can increase spend with each supplier and provide negotiation leverage within the supply base. It also alleviates additional resources that would be needed to manage a larger number of suppliers.
Spend Analytics drive cost savings and optimize the supply base
Whether you're a procurement specialist, supply chain manager or category manager, you need quick access to your spend data in order to make great decisions and identify cost saving opportunities. At Numerical Insights, we have performed spend analytics for large Fortune 500 companies and medium-sized businesses or business units.
As you start to look at your spend data, you may find that it is not centralized across your business areas. Additionally, spend analytics is a specialized skill that your procurement team may not possess. This is where Numerical Insights can help. We possess skills to put together multiple sources of data, categorize it to adhere to your own taxonomy and then create custom views into your data to allow you to identify savings opportunities and off-policy spend. If your data has a long history of being entered manually, we can work with you to cleanse the data in preparation for analysis.
We build custom, self-service reporting tools and help you interpret the data visualizations. We work with you for your entire supply chain data journey and begin with a discovery and planning session.
Typical Features and Deliverables: (Solutions are customized to client preferences)
- Customized visibility of your spend by category or by supply chain manager
- Identification of supply base rationalization opportunities (reduces supplier management needs)
- Identification of rogue spend and cost saving opportunities
- Creation of contract management databases
- Geographical maps of your supply base
Inventory Analysis drives cash to the bottom line
Product inventory is money tied up sitting on the shelf that can't be used elsewhere in the business. One big challenge for supply chain professionals is in deciding how much inventory to carry, when to order more and how much. The optimum solution is one that minimizes the amount of money tied up in inventory while still being able to fill each customer order. This challenge is driven by the fact that customer ordering can vary greatly each month as can your supplier delivery times.
For this reason, inventory analysis is a valuable activity. Numerical Insights has a proven methodology to provide you with insights into your customer demand patterns and supplier delivery variations. This information, combined with a prioritization scheme for your product offerings can:
- Provide recommendations on how much inventory to carry (reorder quantities)
- Tell you which products are high volume and which products customers rarely order
- Show you how volatile or stable the ordering of each product is over time
Contact Us today to discuss how we can help you drive savings to the bottom line and increase efficiencies in supply base management.