Spend Analytics VS Spend Analysis

Andrew Wolfe and Sourcing Force on how to conduct a spend analysis and the differences between Spend Analytics and Spend Analysis.
For more insights into Spend Analysis:
www.wolfeprocurement.com
Also check out our article on the difference between spend analysis and spend management:
www.sourcing-f...

[@kilomerte]

Good Presentation. One basic question is how supplier rationalization from 108 to 3 would give you cost savings. I understand you can try the lowest cost of the suppliers and also can negotiate a better contract with increased quantities, but then might also need to understand if the supplier can handle the scale as well. How are these generally addressed?

[@sourcingforce]

Dear @Kilomerte,
Thank you for your feedback.
Supplier rationalization allow several benefits, not necessarily in cash. Also, some markets require to keep several suppliers, it will depend upon the risk, cost and ease of management.
Here couples of benefits:
- Of course the more quantity you have to more you can attract suppliers and reduce cost.
- Managing 100s suppliers cost a LOT of time for you and your team (Calls, meeting, emails)
- Managing 100s different ways of ordering or managing invoices are a mess for you Purchasing and Accounting teams
- Controlling quality over 100s suppliers and thousands of orders is just unmanageable. In the opposite, enforce a process and control quality and compliance over 2 to 10 suppliers is really manageable.
- Manage small litigation with a supplier where you have no influence can be tricky. Few bigger suppliers might be more helpful to find solutions.
- Maintaining 100s suppliers accounts in you ERP and maintaining update (bank accounts, compliance...) is really time consuming and costly (SAP for example might invoice each account or BDD size).
So, the question is not only about direct saving (cash) but more about quality, compliance and opportunity to leverage the negotiation.
Most big companies focus highly on supplier accounts reduction as they know the impact on the P&L. Best in class are generally Aeronautic, Car manufacturers...
Hope this clarify the video ;-)
Olivier Audino

[@trendtradertrender4328]

Great video , may I ask how you do spend analysis now after cove as the 3 years time frame is kind of false. Any suggestions please ?

[@maikbanner7552]

It would have helpful if you added some depth in terms of Predictive or Prescriptive Statistical Techniques you used in your Use Case.
How P-Cards helped Supply Base Consolidation?

[@sourcingforce]

Hi @Max,
You're right, we can't go in depth in such short video.
P-card is a very good opportunity for companies but it also really depends on the countries you're working with. In Europe the system is very different than USA, all Card options are not available.
But generally those are the main benefits of a P-Card :
- your employees don't need to create a vendor profil in the system
- transactions are secured and you can set limit per payments & countries (and even on certains articles only)
- bank statement is fully detailed for all transactions (this is not the case for a wire transfer)
- you don"t need physical card to activate/deactivate your employee' cards.
This does not mean ALL employee need a P-Card, but some departments may achieve great productivity and find better offers using a card.
Let see other details here : www.sourcing-force.com/en/virtual-debit-cards/
Olivier

[@maikbanner7552]

@@sourcingforce -- Thank you.