This paper explores the functions and definitions of Supply Chain Management (SCM) and explains how Market Intelligence overlaps with a firm’s SCM goals. We look at how MI offerings can better match the needs of SCM professionals. The better information that is available, the more efficiently the SCM function can be accomplished, enabling strategic decision-making for all levels of corporate supply chain management.
This presentation shows selected slides from a GIA white paper. To download the entire white paper that you are interested in, please visit http://bit.ly/GIAinsightWP
2. Webinar Content Outline
• Corporate Supply Chain Management functions identified
• The missing piece of the puzzle – The need for Market Intelligence
• Market Intelligence solutions defined
• Conclusions
4. Corporate Supply Chain Management
Connecting the worlds of internal customers, suppliers of goods and services, and the
SCM world of project management, ethical decision-making, strategy, and cost savings
www.globalintelligence.com – page 4
5. Purchasing
The Purchasing Process (centralized procurement)
1. Identifying a need
2. Creating a requisition which records budget owner & expenditure
3. Buyer may rely on Approved Vendor Listing (AVL) to know the
appropriate vendor and price for the PO, or
4. Buyer conducts a Request for Quotation (RFQ) from the most
qualified suppliers in the buyer’s network
5. Buyer transforms requisition into a Purchase Order (PO)
6. Responsible to coordinate delivery and customs clearance
7. Responsible for ensuring the supplier’s invoice matches the
purchase order, and arranging with accounts payable for payment
8. Long term supplier relationship management
www.globalintelligence.com – page 5
6. Procurement organization
Procurement Design Process:
• Business Process Mapping
• Benchmarking
• Best practices and alternatives
• Organize teams servicing lines of business or centralized resources
catering to internal customers’ needs
• Goals and metrics:
• Maximized savings targets
• Maximized percentage of spend using suppliers from approved vendor listings
• Maximized volume of Requisition-to-PO transactions completed in less than 1 day
• Minimized volume of PO-invoice mismatches
• Maintenance of the Approved Vendor Listing
• Maintaining contract management process: negotiate contracts with
suppliers for best pricing and other terms
www.globalintelligence.com – page 6
7. Logistics and Inventory Management
Logistics is the management of inventory after purchase or production
• Strategic decision-making regarding the approach to inventory
deployment
• Distribution center locations and operations
• Inventory forecasting (purchasing needs assessment)
• Spare parts management
• Operations management
www.globalintelligence.com – page 7
8. Strategic Sourcing
Strategic Sourcing is problem solving and needs fulfillment using the
best combination of methods and internal and external sources available
• Needs assessment
! Business Process Mapping
! Resource analysis
! Synergy analysis
! Total Quality Management
• Evaluation of supply markets
• Management of the bid process (RFP, RFQ, RFI)
• Achieve best costs, quality and schedule
• Minimizing risk
www.globalintelligence.com – page 8
9. The missing piece of the puzzle –
Typical SCM experiences
“I discovered the need for targeted research and analysis, but
did not have the required skills or resources to execute”
www.globalintelligence.com
11. Market Intelligence – the missing piece of the
puzzle
Purchasing
Research Skills required Access to information
• Finding potential suppliers • Google
• Complicated relationships • Suppliers who tell you who their
between suppliers and the competition is
competition • Buyers who have been in the
• Understanding market pricing business for many years
• Collecting many competitive
quotes
“If I had access to Market
• Gossip
Intelligence services I would
have been even better at
saving money.”
www.globalintelligence.com – page 11
12. Case Example:
Market Intelligence in Purchasing
• Global pharmaceutical contract
research organization (CRO)
• Buyer was required to issue a
request for quotation (RFQ) for
dry ice
! Dry ice is used to keep bio samples cold during
transit to labs
• The search for potential
suppliers started with Google, “A partner screening and evaluation
and moved onto asking the project would have offered the CRO
incumbent supplier who their a complete list of the dry ice
competitors are suppliers meeting the company’s
• The firm did not include all requirements, and a ranking of the
pharma-grade dry ice suppliers firms most aligned with the
in the RFQ company’s needs.”
www.globalintelligence.com – page 12
13. Market Intelligence – the missing piece of the
puzzle
Procurement Organization
Research Skills required Access to information
• Benchmarking • Google
• Best-in-class comparisons • Personal networks
• Tools available for ERP & • Business school text books
purchasing management • Suppliers
“Market Intelligence can tell you whether it is better to focus on
maximizing savings or maximizing internal customer service – more
importantly, Market Intelligence can tell you how.”
www.globalintelligence.com
14. Market Intelligence – the missing piece of the
puzzle
Research requirements Access to information
• Finding DC locations • Google
• What are the hidden costs of • Cost – benefit analysis
opening a DC in Europe? In Asia? • Word of mouth
In the Americas? • Industry publications and
• What are the economic factors newspapers
impacting inventory forecasts? • Logistics & Inventory
“If I had a qualitative country profile I would have known
not to open a distribution center in a country with so
much red tape .”
www.globalintelligence.com – page 14
15. Case Example: Market Intelligence in Logistics
• Global aerospace manufacturer
• Spare parts distribution center
location decision was made based on
cost – benefit analysis
! South Asian location was an inexpensive
choice, close to customers in Eastern
Europe, the Middle East and all of Asia
• After it started up the firm realized
that local government red tape was
preventing the movement, sale, and
removal of spare parts from the depot
• The firm was stuck paying for the
parts, the warehouse, and the labor
“A qualitative country profile combined with the cost – benefit
analysis would have raised a red flag regarding the political powers
of the host government over international business.”
www.globalintelligence.com – page 15
16. Market Intelligence – the missing piece of the
puzzle
Strategic Sourcing
Research requirements Access to information
• Understanding the alternative • Suppliers who tell you who their
supply network competition is
• What turn-key solutions are • Buyers who have been in the
available for a firm changing its business for many years
overall strategic direction? • Collecting many competitive
• What is the forecast for the quotes
industry?
“If I had known that a single supplier could handle
all of the firm’s production inputs, I would have
saved the company a lot of time and effort.”
www.globalintelligence.com – page 16
17. Market Intelligence – the missing piece of the
puzzle
• Working for corporate supply chain management, internal customers
often want everything yesterday (get the project done really fast!)
• SCM managers are also involved in:
! Managing vendor relationships
! Negotiating contract terms and conditions
! Cutting Purchase Orders (POs)
! Balancing payables
! Forecasting inventories
! Performing needs assessments
• …and often do not have time for this research and analysis
www.globalintelligence.com – page 17
18. Market Intelligence – the missing piece of the
puzzle
• The Market Intelligence service offerings can enable SCM professionals
to have better information, and therefore offer quicker and more
effective strategic decision-making
• Market Intelligence professionals are trained to conduct research,
perform primary research interviews, offer objective analyses, and
manage projects with strict restrictions
www.globalintelligence.com – page 18
20. Solutions for the purchasing process
• Company profiling • Supplier screening & evaluation
! As the simplest form of supplier ! When looking for new or alternative
intelligence, a company profile suppliers, a thorough methodology can
provides basic information about lead to significant savings and value in
suppliers the partner relationship
• Supplier deep dive • Rapid response background checks
! In order to properly evaluate the ! As a different type of research process,
reliability, strengths and a pre-defined type of background check
weaknesses, and capacity of a can be performed on new potential
supplier, a deep dive study, suppliers on short notice if access to a
utilizing various types of global network of information sources is
information sources and more available
rigorous analysis methods, can
reveal valuable insight
www.globalintelligence.com – page 20
21. Supplier screening & evaluation
• A specialist in market intelligence
is in a good position to RELIABILITY Long-term strategy CULTURE
Responsiveness
Company values
! Find information about potential
suppliers Management
Volatility
experience
! Evaluate relative strengths,
weaknesses of suppliers
Inventory Technical staff
! Evaluate the best fit using both hard
and soft criteria
Logistics Backup facilities
• The evaluation process includes
Error handling On-line capacity
! Defining an ideal profile for a supplier
Down-time
! Comparing potential partners against QUALITY CAPACITY
the ideal profile
! Comparing potential partners against Ideal partner
each other Target company
www.globalintelligence.com – page 21
22. Rapid response background checks
• In cases where suppliers change frequently and new unknown potential
suppliers emerge, a company may need to make a quick decision on
choosing a supplier
• Such a decision can lead to the discovery of a good new supplier, or
alternatively to a disastrous choice
• The need may thus be for a rapid background check on unknown
suppliers
• The research process in a nutshell:
! Define a template for the information needed about a new supplier – this information is
usually very specific to the supply-chain or the process at hand (track record or references,
capacity, bottlenecks, weak spots)
! Make a framework agreement with a market intelligence company that has global access to
this information
! Whenever the need arises to do a background check on a new company, the market
intelligence company already knows exactly what to look for, why the information is
needed, and can find the information for any company in any part of the world – the findings
can be delivered very quickly
www.globalintelligence.com – page 22
23. Solutions for strategic sourcing
• Market sizing & forecasting
! Market sizing & forecasting can help strategic sourcing in two ways:
• By forecasting the demand for end-products, and therefore the need for inputs
• By forecasting the market development of inputs
! Estimating and forecasting the market size for end-products is usually part of a
strategy or business planning process, or the process related to launching a new
product
! Efficient planning of supply-chain needs benefits from the foresight of the
development of the market for the end-product
! Forecasting market developments –and price developments in particular – for
inputs enables better purchasing decisions sourcing
• Market monitoring
! An important part of strategic sourcing is being aware of changes in the market
environment
! A market monitoring solution can provide supply-chain managers with timely
insight about the markets for inputs, developments in technologies,
macroeconomic developments, suppliers, competitors, etc.
– page 23
24. Market sizing & forecasting
• In order to arrive at a good estimate, triangulation and
validation of results is required
• A proper market sizing study therefore uses a wide
variety of data sources and estimation methods
Top-down model Bottom-up model
Total market size
Indicator 1 Indicator 2 Indicator 3 Indicator 4
Segment total Segment total
Segment total Segment total
Supplier 1 Supplier 2 Supplier 3 Supplier 4
Total market size
www.globalintelligence.com – page 24
25. Area of Expertise Rapid Response Research Strategic Analysis Continuous Monitoring
Company Profiling Partner Screening & Evaluation Supplier Monitoring
Purchasing
Supplier Deep Dive
Value Chain Analysis Competitor Benchmarking
Procurement
Market Profiling Regulatory Monitoring
Country Risk Analysis Competitor Benchmarking
Logistics Scenario Analysis
Macroeconomic Analysis
PESTEL Analysis
Market Sizing & Forecasting Price Monitoring
Strategic Sourcing
Trend Analysis Supplier Monitoring
Supplier Deep Dive Market Monitoring
Building A World‐Class Market Intelligence Department
Intelligence Workshops
Strategic quantitative and qualitative research and analysis techniques
www.globalintelligence.com
27. Conclusions
Requirements: Results:
• Capacity • Purchasing is more efficient
• Time for research and effective
• Skills • Procurement organization is
• Research and analysis best-in-class
• Objective perspective • Inventory management risks are
minimized
• Market Research Partner
• Strategic sourcing is aware of
all possible suppliers, sources,
solutions
www.globalintelligence.com
28. Conclusions
• Better information enables strategic decision-making
• SCM professionals do not always have the research and analysis training or
the time to conduct thorough investigations
• Bringing together the market intelligence needs of SCM professionals with
the solutions available in this market can enable strategic decision-making
for all levels of corporate supply chain management
www.globalintelligence.com
29. Thank You for Your
Attention
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Paper: Market Intelligence for
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services, please send email to
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31. GIA is a strategic market Intelligence
and advisory group
Global Intelligence Alliance (GIA) was formed in 1995
when a team of market intelligence specialists,
management consultants, industry analysts and
technology experts came together to build a powerful
suite of customized solutions ranging from outsourced
market monitoring services and software, to strategic
analysis and advisory.
Today, we are the preferred partner for organizations
seeking to understand, compete and grow in
international markets. Our industry expertise and
coverage of over 100 countries enables our customers
to make better informed decisions worldwide.
www.globalintelligence.com
GIA Industry White Paper 2 / 2010: Native or Web Application? How best to deliver content and services to your audiences over the mobile phone
32. Access local knowledge in over
100 countries
GIA Group has 12 offices on 4 continents.
Together with affiliated GIA Member
companies, certified GIA Research Partners
and consultants, GIA provides access to
local knowledge in over 100 countries.
All GIA Network companies adhere to GIA’s
Research and Analysis Quality System as
well as the SCIP Code of Ethics.
www.globalintelligence.com - page 32
33. We understand your business
With a track record of supporting thousands of clients Industry Practices
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