Supply chains across enterprises are infested with supplier risks, savings leakage issues, and sourcing inefficiencies that often go undetected due to the lack of good visibility into spending data. By blending spend data with the right market intelligence, organizations stand to extract the best value from their sourcing initiatives. Learn how to optimize your sourcing efforts when you attend this session.
3. #AribaLIVE
Analyzing Spend: You Can’t Fight
What You Can’t See
3
12 Trillion dollars is total spend
through global 2000 companies
last year
Enterprises are losing over USD 260
Billion per year due to the
inability to organize and analyze
spend data1
To date, only 40% of the companies
have good visibility on their
spending2
60% of the firms that analyze spend
still rely on paper and
spreadsheets3
You Can’t Fight What You Can’t See
1: Aberdeen Research: Best Practices in Spend Analysis : Cure for a Corporate Epidemic, 2004;
2: SAP / Procurement Leaders Survey 2011
3: Spend Analysis : Working too Hard for the Money , 2007
Eric and Greg both spoke to the importance of identifying corporate linkage, diversity status and total spend when working with their suppliers. These are just some of the categories that we’d recommend companies explore to get a clear, overall snapshot of supplier health. Companies must also take into consideration overall financial health, socio-political stability of the supplier’s location, and the health of tier-2 suppliers. Establishing a central repository of all supplier data gives companies the ability to see the entire supply chain at a glance. From my days managing supply chains for HP, I know that compiling all that information can be challenging – and worse, can lead to incorrect information being used to make decisions. As a best practice, it is always beneficial to employ some sort of third-party review of the data – that not only validates the quality of the data, but can uncover opportunities as well. At D&B we use the DUNS-Right system – every supplier/organization has a unique identifying number which allows us to identify parent and children companies, branches, violations, etc.
Fourth: “How can I get advance warning of a supplier disruption or change in the status quo?”Advance warning of supplier trouble can mean the difference between avoiding a disruption and coming out on top or scrambling to pick up the pieces. Your options for resolution are so much broader when you have the luxury of time.
Notes: Other examples of quadrants are Strategic Importance & Supply Risk/Complexity, Profit Impact & Supply Risk/Criticality, Impact & Spend, Complexity of adding capacity & Supplier willingness to add capacity
Notes: Other examples of quadrants are Strategic Importance & Supply Risk/Complexity, Profit Impact & Supply Risk/Criticality, Impact & Spend, Complexity of adding capacity & Supplier willingness to add capacity