Supplier Procurement Analytics powered by PMSquare

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Supplier Procurement Analytics solution powered by PMSquare assists procurement and finance departments lower costs. The solution provides detailed analytics to identify enterprise spend, transaction costs and how to better manage your suppliers

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Supplier Procurement Analytics powered by PMSquare

  1. 1.    Supplier  Procurement  Analytics  powered  by  PMSquare  Procurement organizations tend to swim in data. One of the mostimportant strategies for any best-in class procurement organization isspend analytics. In conjunction with sourcing, category, contractmanagement and purchasing, spend analytics provides a window intospend behavior to drive cost reduction and cost avoidance efforts.As a result, many of our customers ask us about Procurement Analyticsprojects. Chief Procurement Officers and other Sourcing/Procurementleaders of Global, large and even mid-market firms are increasinglyfocusing on spend analytics as part of a new wave of costrationalization projects.The spend numbers are staggering. At a large multi-national industrialfirm with $55 Billion in revenue, the indirect spend is $9 Billion. Theopportunities for savings are tremendous.PMSquare’s Procurement analytics solution can provide the visibilityand insight needed to improve procurement performance. Spendmanagement provides many cost reduction opportunities thru visibility
  2. 2.  into direct and indirect procurement, IT hardware, software, andservices, and logistics, transportation and inventory costs.However, getting a 360 degree view of spend data is extremelychallenging in most organizations. A large part of this is due to thenumber of fragmented solutions that contain expense information. Inone firm we are helping, there are 32 ERP instances that capture POtransactions.Another part is due to poorly implemented solutions where data as itflows from transactions systems to BI dashboards via an extract,cleanse, classify model is getting corrupted. Sometimes theclassification is wrong resulting in incorrect aggregates. As a resultthere is limited trust in the numbers presented in the dashboard.Poor quality of expense data coming from procurement and ERPsystems is a big problem.Optimizing expense management is a key metric in world classprocurement and sourcing organizations. Specific questions thatProcurement Analytics solutions can help address include:
  3. 3.  Direct and Indirect Material Analysis What materials has the procurement organization purchased last year? In what volumes and for what prices? How has that changed over time? How many SKU’s do we carry on our material list? Has this increased over time? Can we consolidate or substitute items to maximize buying power? What % of payments are duplicates? How is the total landed cost of a material distributed across unit cost, and other carry costs? Has this changed? What types of requests (MRO, manufacturing job orders, MRP) by volume have been processed? Do patterns reveal opportunities for streamlining? Are different demand channels ordering similar commodities? Can we synchronize needs across channels or substitute materials for consolidated buying?Vendor and Supplier Analysis What does our supplier landscape look like? How many vendors have we purchased from this year? On average how much is spent per vendor in a specific period? How do vendors rank by volume and revenue spent? How has that changed over time? How many vendors do we have for a specific material or material group? What percentage of the volume is sourced from a single supplier? How do prices compare across vendors for a specific material? Has this changed? How do vendors compare across payment and delivery terms, quality of materials received, on time delivery, order and invoice accuracy?Process Analysis How many transactions are performed for various stages in the procurement cycle?
  4. 4.   How long does it take to move from one stage to the next in the procurement cycle? How do processing times relate to specific materials, vendors and buyers? What percentages of requisitions are declined? What are the reasons for rejection? How does this compare across commodities, and demand channels? Where are there opportunities for reducing non value added activities?Transaction Analysis How many requisitions, contracts, and purchase orders are processed across the organization by buyer? What is the average value of each transaction? How is each buyer’s activity distributed across vendors, materials and demand channels? Should buyer responsibilities be redistributed? Is there an opportunity to consolidate transactions with a vendor through one buyer? Are there opportunities for consolidating the purchase of certain materials with certain buyers?Please   Contact   PMSquare   for   more   details   on  how   we   can   assist   Procurement   and   Finance  departments  curb  spending.      Kind  Regards  Rana    Rana  Banerji  PMSquare  Asia  Regional  Director  E:  rbanerji@pmsquare.asia  

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