Frequently Asked Questions

 1. What are the Low-cost country/best cost country assessment studies? We already have a set supply base in the US and quite skeptical about experimenting with new suppliers.

With the help of our procurement market intelligence solutions, we have observed that in the recent times, sourcing certain categories (say metals, chemicals, and other raw materials) from emerging markets have helped procurement organizations with achieving significant cost savings. However, the major concern that is faced by category managers is with the credibility of suppliers and the political/economic conditions of these countries. Low-cost country assessment studies, along with procurement market intelligence solutions help category managers in carefully selecting the low-cost/best-cost sourcing destinations based on factors such as risk scores, ease of doing business, etc. With the help of our procurement market intelligence solutions and benchmarking best practices, category managers were able to follow a systematic procedure involving identifying ideal low-cost/best-cost destinations, assessment of risks associated with sourcing from these destinations, ranking them based on risk scores etc. We also provide category market intelligence reports to help category managers with the screening of potential suppliers from the shortlisted countries and choosing suppliers based on their capabilities.


2.  Is it risky to engage with suppliers from emerging markets? How credible are they?

There is always risk involved in engaging with suppliers from emerging market, but only when the right suppliers are not selected. The major concern faced by our clients is with evaluation of vendor capabilities and selecting right suppliers based on capabilities. This is exactly where our understanding of emerging markets and capabilities of conducting primary research with local suppliers could help clients mitigate any potential risk. We conduct a thorough screening of the suppliers, through sourcing and procurement market intelligence to check their credibility and accuracy of information published on their website and other secondary sources. We also rank the different suppliers based on risk and develop recommendations on the best suppliers to work with.


3. How do we know if we are following the best-in-class practices? Are the peer group companies performing better than us? Which areas do we need improvement on?

Yes, you could always evaluate your practices and performance levels against the peer group companies. We have a range of benchmarking best practices and well-crafted sourcing and procurement intelligence solutions/benchmarking solutions that can help you in identifying best-in-class peer group companies, their practices, and what makes them different from the rest of the companies. We can also identify the major KPIs to conduct a detailed comparison of how your procurement organization performs against what is considered to be best-in-class. While your organization might be best-in-class when it comes to certain parameters, our best practice benchmarking solutions help you in mapping areas where significant improvement can be achieved and realize quick cost benefits and process improvement. Some of the techniques that we employ to help clients achieve quick wins include cost breakdown analysis, TCO analysis, tail spend analysis and consolidation etc.


4. What are the TYPICAL COST BENEFITS achieved through the use of PROCUREMENT MARKET INTELLIGENCE?

We have typically observed our clients being able to achieve up to 40% cost savings through efficient usage of our procurement market intelligence services. However, this varies in accordance with the exact business problem/solution. Studies such as tail spend analysis and procurement market intelligence could lead up to 40% savings whereas studies on supplier negotiation strategies typically lead to the identification of cost saving opportunities of up to 20% of the actual spend at a category level.


5. What sourcing and procurement challenges can procurement market intelligence solve?

Some of the essential questions that procurement market intelligence solutions can help you get answers to include:

  • How can we identify the best suppliers by sourcing and procurement intelligence solutions for direct and indirect categories?
  • Which suppliers are most compatible with our long-term business goals?
  • Are the current suppliers cost efficient?Are the current suppliers stable financially and structurally?
  • Are the current suppliers stable financially and structurally?
  • Are there alternative sourcing and procurement options that we should consider? What are the pros and cons?
  • Are we at par with the performance levels of best-in-class procurement organizations? What are the potential improvement areas?


 6. What are the benefits of cost model analysis?

Cost breakdown analysis/cost-benefit analysis helps procurement organizations gain insights into the main drivers of suppliers’ costs. This helps procurement managers and buyers to develop negotiation strategies and demand a competitive pricing. As a part of the analysis, key components such as materials, labor, conversion costs, overheads, logistics etc., will be analyzed to identify the prime cost drivers. This also gives a visibility on the supplier margins, their current capabilities, fit with organization requirements etc., helping with the development of long-term supplier strategy at a category level.

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