ignite 2015 na sourcing breakout session - "using data to make better decisions"

Using Data to Drive Better Sourcing Decisions

Sourcing Management

14Categoriessourcedover1001mes

17,000Acrossallregions&

commodi1es$28BAcrossallregions

8%Acrossall

commoditytypes

650Acrossallregions&

commodi1es

SourcingeventsSpendAmount

AverageSavings

Experience AggregaAonEvents

Using Data to Drive Better Sourcing Decisions

Data Challenges in Sourcing

•  #ofItemsSourced•  #ofCommodi1esSourced•  #ofBidElementsCaptured•  #ofInternalCostFactors•  #ofSpecifica1ons•  #ofSuppliers•  #ofPackageorCondi1onalOffers•  DynamicDiscoun1ng•  #ofSourceDataSystems

Thisiswhatcausesbasicsourcingtoolstofail,forcingyoutorevertbacktousingspreadsheetsformanualanalysis.

Pressure to Deliver More Value

AccordingtotheSourcingBenchmarkReportconductedbytheAberdeenGroup…50%offirmsstudiedstatethattheyplantoimplementsourcingop@miza@onsolu@ons.

Formanymaturesourcingorganiza=ons,thelowhangingfruit

isgone---thenextfron=erfocusesonmakingsourcing

decisionsbasedontheen=revaluechain

Data-Driven Sourcing Optimization

Illustrative Examples ü  Multi-Objective Decision Making ü  Supply Chain Tendering

Assuming no constraints, Supplier 1 would be awarded all Products

Illustrative Example 1 Multi-Objective Decision Making

Product Supplier 1 Supplier 2 Supplier 3

A 1000 1140 1130

B 1000 1140 1100

C 1000 1150 1080

D 1000 1150 1100

E 1000 1060 1100

What if?

Bid Winners

1026

990

972

990

954

4932

None of the suppliers have enough capacity to fulfil annual demand?

Each supplier only can fulfil the maximum of 3 products?

Suppliers 2 & 3 give a 10% discount on a contract for more than 2 products?

AssumingnoConstraint,ContractwillbeawardedtoSupplier1

WhatIf

TheWhitestripsbehindthegreyboxesbelowcanbeusedtoselectthetextshownduringthetransi1on.Foryourhelp,thetextiswriNeninthegreybox

OPTIMALSOLUTIONFLOW

Supply Chain Tendering

RawMaterial Logis1cs Produc1on

Flow1

Flow2

Flow3

Sourcing Optimization

Unlimited Flexibility. Fast Analytics. Optimal Decisions.

Solution Demo