The Challenge
The worldwide kitchen equipment producer required complete visibility of their spending activities which needed to show all product categories and their suppliers and manufacturing facilities to detect potential cost reductions and protect their operations.
The system failed to unite different data sources which made it impossible to perform supplier comparison and procurement performance tracking at a consistent level.
Pain points
- The system lacks a single interface which enables users to view their spending data so they cannot effectively identify both supplier-based and category-based spending anomalies.
- The manual reporting system caused delays in sourcing operations which resulted in fewer users adopting the system.
Objective
The system should provide a procurement cockpit which enables users to find new opportunities and monitor governance activities and track all savings achievements.
Our Role and Approach
Procurement analytics build
- The Spend cube design unites supplier master data with category taxonomy and plant structures to create a standardized spend cube structure.
- The analysis includes two main categories of opportunity levers which are defined analytical cuts and prioritization logic and top suppliers and tail spend and price variance and duplication.
- The system includes Power BI cockpit which allows users to access interactive dashboards that automatically update while enabling users to view PO and line level details through drill-down functionality.
- Governance: monthly cadence, KPI owners, and pipeline-to-realized savings tracking.
Key findings/ Suggestions
- The system needs additional ‘should-cost / price index’ overlays for essential commodities to boost its negotiation power.
- The system needs to merge contract data with performance metrics which include OTIF and quality data to enable full value-based decision-making.
The Result
- Procurement spend cockpit enabling self-service analysis and repeatable governance reviews.
- Improved transparency for sourcing pipeline and supplier segmentation.
Quantified impact
- ~3% typical savings from spend analysis.
- Visibility/control-tower programs report inventory reduction of 5-15%.