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ACME_SpendAnalytics_MinhTran.ppsx
1. CASE STUDY:
ACME CORPORATION
A SPEND ANALYTIC REPORT IN EUR(€)
FISCAL YEAR 2021 - 2022
Speaker: Minh Tran, Helsinki, 2023
2. About me
Notable:
- 3 years working as M&A consultant and Auditor at PwC.
- Knows how to build boats! (well, part of it).
- Founded my own restaurant, had tons of food and fun.
- Extremely enthusiastic in computer literacy.
- Loves Excel, SQL, Python, good food.
- Loves public speaking even if preparing for it is scary!
- Still loves playing video games during free times.
3. Highlights
• 1. Materials and Vendors
• 2. Trend Analysis
• 3. “Anomalies”
• 4. A closer look at leading material consumption
• 5. Opportunity for saving
• 6. Q&A
4. Materials and Vendors (1/2)
- 20 000.00 40 000.00 60 000.00 80 000.00 100 000.00 120 000.00
Cheney industrials
Fabulous IndustriTeknik A/S
Frankfurter industri GmbH
HH Metal Kft.
INSANE TECH A/S
Italian steel co
Metal Bros (AUSTRALIA) PTY LTD
Metal Bros (London) Ltd,
Metal bros GmbH
Metal Bros INDUSTRIES PTE
Metal Bros SARL
Metal Bros(Shanghai)Automatic Cont. Co
Steel & all Danmark A/S
Spend by vendors
2022 2021
Vendors' Names 2021 2022
Cheney industrials 7 381,72 13 265,06
Fabulous IndustriTeknik A/S 7 163,96 4 988,79
Frankfurter industri GmbH 33 536,00 9 288,00
HH Metal Kft. 33 798,00 40 654,40
INSANE TECH A/S 19 021,25 27 246,91
Italian steel co 19 470,00 15 279,00
Metal Bros (AUSTRALIA) PTY LTD 3 322,21 4 112,49
Metal Bros (London) Ltd, 2 096,00 2 766,04
Metal bros GmbH - 17 664,36
Metal Bros INDUSTRIES PTE 13 299,12 18 437,76
Metal Bros SARL 16 768,00 24 810,16
Metal Bros(Shanghai)Automatic Cont. Co 89 042,14 117 466,07
Steel & all Danmark A/S 22 280,69 18 422,44
Grand Total 267 179,08 314 401,49
5. Materials and Vendors (2/2)
Motor IP20 5.5kW Coverage by Vendors
Metal
Bros(Shanghai)
44,27%
HH Metal
Kft.
15.96%
0% 10% 20% 30% 40% 50% 60% 70% 80%
Alarm system bulbs 140W
Motor IP20 5.5kW
Motor IP55 3kW
Sensor cables 20mt
Transmission motor X334 0,5mm
Spend by category
2022 2021
6. Trend analysis - Spend by Months and Quarters
10 000.00
15 000.00
20 000.00
25 000.00
30 000.00
35 000.00
40 000.00
45 000.00
Jan Feb Mar Apr May Jul Jun Aug Sep Oct Nov Dec
Spend by Months
2021 2022
50 000.00
55 000.00
60 000.00
65 000.00
70 000.00
75 000.00
80 000.00
85 000.00
90 000.00
95 000.00
100 000.00
Q1 Q2 Q3 Q4
Spend by Quarters
2021 2022
7. Trend analysis – Spend by Vendors and Regions
0
50000
100000
150000
200000
250000
Spend by Vendors
2021 2022
-
50 000
100 000
150 000
200 000
250 000
300 000
350 000
Asia Europe America
Spend by Organisation
2021 2022
9. Local vs Global Vendors: Status
Subsidiaries Purchasing type Amount
ACME Beijing Ltd Local 206 508,21
ACME Operations A/S Global 108 338,15
ACME A/S Global 77 081,85
ACME Man. Hungary Local 45 154,00
ACME Industrifabrik Local 39 212,00
ACME (S'pore) Pte Ltd Local 31 736,88
ACME France Local 27 088,00
ACME Pty. Ltd. Global 22 944,70
ACME Manufacturing US Local 18 502,07
ACME Manu. Ltd Local 2 870,00
ACME Chicago LLC Local 2 144,71
Total 581 580,57
11. “Anomalies” in Quantity Ordered
PONumber ProductName VendorNo VendorName Companyname Month Year Quantity UOM Currency PricePerUnit Amount(USD) Amount(EUR)
7134433 Motor IP20 5.5kW 336014 Cheney industrials ACME Manufacturing US Feb 2021 3 each USD 277,27 915,01 831,82
7214942 Motor IP20 5.5kW 336014 Cheney industrials ACME Manufacturing US Apr 2021 1 each USD 275,63 303,19 275,63
7320658 Motor IP20 5.5kW 336014 Cheney industrials ACME Manufacturing US Apr 2021 5 each USD 275,63 1 515,95 1 378,14
7565030 Motor IP20 5.5kW 336014 Cheney industrials ACME Manufacturing US Jul 2021 1 each USD 278,52 306,37 278,52
7499411 Motor IP20 5.5kW 336014 Cheney industrials ACME Manufacturing US Jul 2021 2 each USD 278,52 612,74 557,04
7704604 Motor IP20 5.5kW 336014 Cheney industrials ACME Manufacturing US Sep 2021 10 each USD 287,75 3 165,30 2 877,54
7669080 Motor IP20 5.5kW 336014 Cheney industrials ACME Manufacturing US Sep 2021 2 each USD 287,75 633,06 575,51
7924939 Motor IP20 5.5kW 336014 Cheney industrials ACME Manufacturing US Dec 2021 2 each USD 303,76 668,27 607,52
8015794 Motor IP20 5.5kW 336014 Cheney industrials ACME Manufacturing US Jan 2022 1 each USD 308,09 338,89 308,09
8096450 Motor IP20 5.5kW 336014 Cheney industrials ACME Manufacturing US Feb 2022 2 each USD 334,44 735,77 668,88
8089199 Motor IP20 5.5kW 336014 Cheney industrials ACME Manufacturing US Feb 2022 3 each USD 334,44 1 103,65 1 003,32
8110911 Motor IP20 5.5kW 336014 Cheney industrials ACME Manufacturing US Mar 2022 5 each USD 333,73 1 835,53 1 668,66
8172533 Motor IP20 5.5kW 336014 Cheney industrials ACME Manufacturing US Mar 2022 1 each USD 333,73 367,11 333,73
8120821 Motor IP20 5.5kW 336014 Cheney industrials ACME Manufacturing US Mar 2022 1000 each USD 3,34 3 671,06 3 337,32
8328043 Motor IP20 5.5kW 336014 Cheney industrials ACME Manufacturing US Jun 2022 1 each USD 347,40 382,13 347,40
8389780 Motor IP20 5.5kW 336014 Cheney industrials ACME Manufacturing US Jul 2022 2 each USD 338,90 745,58 677,80
8436694 Motor IP20 5.5kW 336014 Cheney industrials ACME Manufacturing US Jul 2022 2 each USD 338,90 745,58 677,80
8558479 Motor IP20 5.5kW 336014 Cheney industrials ACME Manufacturing US Aug 2022 2 each USD 343,69 756,11 687,37
8663047 Motor IP20 5.5kW 336014 Cheney industrials ACME Manufacturing US Oct 2022 1 each USD 277,72 305,49 277,72
8701137 Motor IP20 5.5kW 336014 Cheney industrials ACME Manufacturing US Oct 2022 1 each USD 277,72 305,49 277,72
8716117 Motor IP20 5.5kW 336014 Cheney industrials ACME Manufacturing US Nov 2022 2 each USD 280,71 617,56 561,41
8623589 Motor IP20 5.5kW 336014 Cheney industrials ACME Manufacturing US Dec 2022 1 each USD 293,15 322,46 293,15
12. A closer look at: Motor IP 20 5.5kW
220.00 240.00 260.00 280.00 300.00 320.00 340.00 360.00
Cheney industrials
Frankfurter industri GmbH
HH Metal Kft.
Metal Bros (AUSTRALIA) PTY LTD
Metal Bros (London) Ltd,
Metal bros GmbH
Metal Bros INDUSTRIES PTE
Metal Bros SARL
Metal Bros(Shanghai)Automatic Cont. Co
Steel & all Danmark A/S
Motor IP20 Price Per Unit By Suppliers
2021 2022
13. Average PPU and Quantity supplied for IP20
2021 2022 Code 2021 2022
Metal Bros(Shanghai)Automatic Cont. Co 315,16 345,71 CN 281 339
Cheney industrials 283,10 297,98 US 26 1031
Metal Bros (AUSTRALIA) PTY LTD 301,50 288,27 AU 11 14
Metal Bros INDUSTRIES PTE 282,96 276,20 SG 47 67
Frankfurter industri GmbH 262,00 258,00 DE 128 36
Steel & all Danmark A/S 261,90 256,50 DK 53 19
Metal Bros SARL 262,00 256,07 FR 64 97 Plan to liquidate their IP20 product line by 2024
HH Metal Kft. 262,00 255,09 HU 129 160
Metal bros GmbH - 252,12 DE - 70
Metal Bros (London) Ltd, 262,00 250,51 GB 8 11 Small scale vendor
Quantity
Note
Motor IP20 5.5kW
Average Price Per Unit
15. Opportunities: Estimated saved by Percentage
-40.00%
-20.00%
0.00%
20.00%
40.00%
60.00%
80.00%
100.00%
120.00%
140.00%
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
Estimated saved by Different PPU
SG AU DK DE HU
2021 2022
16. Opportunities: Estimated saved by EUR
(7 000.00)
(2 000.00)
3 000.00
8 000.00
13 000.00
18 000.00
23 000.00
SG AU DK DE HU
Estimated total saved by Different PPU
2021 2022
Code Vendors' Names 2021 2022
SG Metal Bros INDUSTRIES PTE (1 304,14) 8 471,81
AU Metal Bros (AUSTRALIA) PTY LTD (6 248,33) 2 507,11
DK INSANE TECH A/S 5 281,66 16 416,95
DE Metal bros GmbH 5 023,14 16 105,07
HU HH Metal Kft. 4 376,84 18 018,98
17. Suggested Action Plans
• 1. Re-negotiate vendor contract with Metal Bros Shanghai.
• 2. Re-negotiate vendor contracts with vendors from DK, DE, HU.
• 3. Consider a hybrid vendor selection.
• 4. Make sure ACME Manufacturing US reports are free from errors.
18. Q&A
A SPEND ANALYTIC REPORT
*Aggregated data in different currencies available upon request
Thank you!
Editor's Notes
This chart here represent how significant Metal Bros Shanghai is as a vendor to our subsidiary, amounting 1/3 of 2022’s total procurement expenditure
We will be seeing this name Metal Bros Shanghai a lot more in the next part of the report
Next, we have a look at materials and vendors.
The Motor IP20 accumulated almost 80% total spent by category across the group. Which makes sense since it is our group’s leading product’s materials
Of which, is dominatingly supplied by Metal Bros Shanghai, at 44%. To put in perspective, come in second, is HH Metal Kft in Hungary with almost 16%
The trend of buying provided by these two charts provided us a peak season between second and third quarter, specifically, in Jul.
Although differs in amount, the trend stays the same between two years.
Here we get to see the spending by vendors and its regions. We see a particular name yet again, Metal Bros Shanghai, leading in supplying us their materials, that is, the Motor IP20.
ACME Man. Hungary HU
ACME Beijing Ltd CN
ACME A/S DK
ACME Manu. Ltd GB
ACME Pty. Ltd. AU
ACME (S'pore) Pte Ltd SG
ACME France FR
ACME Manufacturing US
ACME Operations A/S DK
ACME Industrifabrik DE
ACME Chicago LLC US
Correspondingly to vendors, here are spend in EUR by subsidiaries. For a subsidiary that just started, the Danish branch is investing greatly in its production line, making its way to be Europe’s HQ.
It’s worth noticing that ACME Beijing’s procurement far exceeded any other subsidiaries.
It is within expectation since this subsidiary is the Asian’s industry lead.
On to the next section: anomalies!
Some particularly interesting data shown here in terms of quantity of materials. ACME Manufacturing US has ordered approximately 1000 units in 2022, compared to last year.
Almost 4,000% increase! What happened?
I have verified with our data engineer that these numbers are, without being amended, extracted directly from ACME group’s ERP system
There are two possible reasons: 1. vendor Cheney Industrials had a huge discount on their product, from average of 330 EUR per unit to 3 EUR per unit, in which case, I commend the team for purchasing an abundant amount of stocks that should last for a long time.
2. However, it’s likely that it’s an input mistake, two mistakes, to be precise, and they canceled each other out. If quantity purchase was 10 units, and PPU is 334 per unit, together they added correctly to the amount spent that is 3.6k USD or 3.3k EUR.
I personally think this is the case, because if we have purchased 1k units, there’s no reason to continue ordering in the next months. Not to mention logistic issues.
Here we can observe how significantly more expensive Shanghai’s vendor’s PPU is, compare to other vendors that supply the same material. Which honestly, shouldn’t happen but since it is not within our investigative scope of work, we are going to leave it at it for the “what’s happening” and focus more on Prescriptive “what can we do” kind of analysis
This is the data that support the previous chart, compliment by quantity supplied to our subsidiaries.
Hypothetically speaking, if we are to supply ACME Beijing with few of these vendors whose PPU are significantly smaller than Shanghai Vendor, what will happen?
I invite you to have a look at the world map’s distribution channels that are currently accessible to ACME subsidiaries
------------------ (after coming back)
By multiplying quantity ordered and average PPU of different vendors in 2021 and 2022, I have came up with very interesting data. It is worth mentioning that I have added a mark up of 15% transportation cost per order, which is in line with industry standard that ACME practices
Here we see the geographical stretch of current distribution channel on a global scale.
In this scenario, I have aggregated an average PPU for 5 particular vendors:
Singapore
Australia
Denmark
Germany
Hungary
Let’s go back to the previous slide
Going forward, with newly obtained information, are the suggested plans and course of actions
I left out Australian vendors to minimize the stretch on human resources spent on negotiating contracts, especially since the saving is significantly less than the other 3
In scenarios that any of the vendors are unavailable due to unforeseen circumstances, it is ideal that we would be able to select other vendor to make sure we constantly have materials for production. A non exclusive, discussed prices with no quantity commitment would serve us best to min-max the situation.
Even though it doesn’t have that big of an impact on a group-scale, it is still a required practice to be precise, especially when audit season is coming. We are lucky this case since it did not skew our data and accounting entries, but going forward, this must not happen, assuming that it’s a human error
