the top ten technologies for supply management savings today
TRANSCRIPT
New report by BravoSolution
10. e-RFX• The first stop for supply management savings – e-RFX expands
the supplier base, improves efficiency and increases cost savings.
• New suppliers may have:• better processes or technology, allowing them to meet
your needs at a lower cost. • higher quality or better reliability, lowering TCO.
• Result – 30% purchase price cost reduction for key commodity groups by switching suppliers, or save 20% by redistributing all but 5% of the parts between the current suppliers.
9. e-Auction• After a sourcing manager creates the tender specifications and
sets up the e-auction, the process drives itself – • eliminating all manual outreach to suppliers and proposal
comparisons.
• E-auctions streamline the entire process, creating a minimum threshold for savings and driving competitive bidding among suppliers.
• Result – A recent IBM report estimates that the federal government could save $8.9 billion annually by increasing the use of reverse auctions.
8. P2P – Procure-to-Pay• P2P – which focuses on the requisition, invoice management,
and e-Payment – boosts visibility into off contract spend, increasing negotiated savings up to 40%.
• This detailed transaction data is invaluable in the long run as
procurement teams develop technology-driven sourcing plans.
• Result – While P2P will only be a piece of the puzzle, its indirect benefit can be significant, especially since it can reduce the manual purchase order processing costs by up to 80%
7. Contract Management• While sales and legal are also heavily involved, contract
management means big things for procurement.• It ensures that preferred suppliers are used and negotiated
savings are realized.
• In addition to reducing cycle time and improving visibility, contract management technology improves compliance, prevents evergreen renewal, and allows for quick identification of the Top N suppliers.
• Result – A UK National Audit uncovered that better contract management could generate savings between £160-190 Million annually in the UK public sector.
6. Global Trade Management (GTM)• GTM streamlines the global trade process – from logistics to
settlement activities – significantly improving operating efficiencies and cash flow.
• Multinational companies depend on GTM. A single global shipment can require 20+ documents for important and export.
• Result – An analysis of trade data for five organizations with $66 billion in revenue found direct-compliance related savings of $261.2 million.
5. Supplier Information Management (SIM)• SIM ensures that all supplier information – from contract
names and location to contract terms and conditions – is housed in one, central depository. • This is a near-impossible task without technology.
• In addition to ease of use, SIM tools allow buyers and supplier reps to update the data in real-time.
• Result – Procurement teams have increased in size by 35%, but SIM technology decreases time and expense required to manage suppliers by 7 times.
4. Supplier Performance Management (SPM)
• SPM solutions revolve around quality and performance improvement, collaborative innovation, and mitigation of potential supply disruptions that can cost millions of dollars.
• SPM provides a common platform for suppliers and buyers to collaborate to improve processes, quality and effectively reduce cost.
• Result – In 1999, Hershey lost $150 million due to a failed order management system, and Nike lost $100 million in revenue in 2001 because of issues with its new planning system.
3. Spend Analysis
• Spend analysis answers the 6 W’s – who is buying what from whom, when, where, and at what price.
• From identifying duplicate payments to inventory optimization, spend analysis identifies limitless savings – even for organizations where little or no savings were expected.
• Result – Spend analysis can uncover substantial savings across diverse categories, with savings up to 20% on legal, 25% on Marketing, and 40% on consulting and integration not uncommon.
2. Decision Optimization
• Decision optimization is applied to reduce good and service acquisition costs and freight costs, in addition to inventory, network and labor costs. • By applying rigorous analytical techniques, decision
optimization narrows down to the best decision after assessing all alternatives – it’s powerful, proven and repeatable.
• Result – Other than spend analysis, decision optimization is the only other technology proven to deliver double-digit savings.
1. Integrated, Collaborative Sourcing • #10-2 are only the tip of the iceberg for uncovering savings – An
end-to-end sourcing suite delivers a greater ROI than each individual tool, delivering up to 40% savings on hundred-million plus categories.
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