Tag: Price forecasting

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Price Forecasting: An Effective Tool for Companies to Identify Profitable Products and Predict Fluctuating Oil Prices – A SpendEdge Case Study

The Business Challenge

The client, one of the leading oil and gas companies in the United States, was facing predicaments in forecasting the fuel price spreads and crack spreads for a variety of products. This was hindering the production and refinery planning for the company. Also, with the increase in oil prices and volatility, business strategies and supply chain were getting negatively impacted. This created the demand for a dedicated manufacturing environment and price forecasting solutions for the oil company.

The ability to perform an oil price forecast is vital for companies to implement their business strategies effectively. Get in touch with our experts and know how our price forecasting solutions can help your company in making informed business decisions.

Solutions Offered

To improve the supply chain flexibility, the oil company decided to collaborate with SpendEdge. The supply chain experts at SpendEdge conducted a comprehensive market research, comprising of qualitative and quantitative assessments, to determine how volatile oil prices affect supply chain flexibility and dedicated manufacturing environment.

Since the implementation of transportation strategies and utilization of dedicated manufacturing are based on oil prices, the price forecasting solution helped the client to determine when to reduce inventory levels.  Price forecasting also predicted the appropriate time for the client to shift from just-in-time delivery to better use of transportation capacity. Additionally, the oil price forecast provided necessary insights for the company to switch to shared resources such as third-party logistics carriers and consolidated warehouses.

Want to know how price prediction empowers companies to serve customer demands?

Request a free proposal and know how our portfolio of price forecasting solutions can improve the efficiency of your company to address customer demands.

Key Findings

In a span of two months, our price forecasting solution enabled the company to predict the fluctuation in oil prices and identify the most profitable products in the near term. Reducing the price forecasting error by more than 50% helped the client to precisely position their inventory in the supply chain and address customer demands. Moreover, price forecasting helped the client to reduce inventory levels, expediting costs, and transportation costs.

Why Price Forecasting Is Important in Supply Chain?

As price forecasting helps predict short- and long-term prices of products, companies can accurately analyze the demand and supply of their products. They can shift from quick delivery to cheaper and sometimes slower transportation modes to cut fuel consumption and reduce transportation costs. Also, with the help of price forecasting solutions, they can increase total safety stock in the supply chain and leverage economies of scale.

Oil price forecast requires the analysis of various factors. Request a free demo and know how our experts can assist you with their price forecasting solutions.

 

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Top 5 Factors Affecting Soybean Oil Price in the US

Soybean oil is, generally, classified under vegetable oils. The applications of soybean oil are numerous and it is currently witnessing high demand from industries like the painting sector, where it is used as a drying oil. The growing importance of soybean oil in the food industry has resulted in the market’s high growth across various geographies. However, soybean oil manufacturers in the US are facing challenges in the form of market dynamism, which is due to recent soybean oil price fluctuations, and changing import policies of foreign countries. Therefore, investors who are looking to profit in the market can do so by analyzing the factors affecting soybean oil price and investing in risk mitigation strategies.

To help soybean oil manufacturers thrive in the competitive US market, our team of experts at SpendEdge has highlighted five significant factors affecting soybean oil price.

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Commodity Price Forecasting for an E Retail Firm – A SpendEdge Case Study

Engagement Overview:

A leading player in the e retail industry wanted to build an price forecasting model to lower inventory costs, improve cash turnover cycles, and respond quickly to pricing trends. The client also wanted to enhance their category expertise and intelligence across all critical areas of the supply network. To do so, the e retail client approached SpendEdge to leverage commodity price forecasting solutions and devise an effective model to forecast future pricing trends. A detailed quantitative analysis of various supply chain categories request proposal was carried out to build world-class procurement solutions.

About the Client:

A leading player in the e retail industry.

Business Challenge:

The e retail client was facing several challenges in making optimal pricing decisions, which varied from comprehensive data on price trends to highly granular market-specific information.


How did SpendEdge Help the Client?

  • Step 1: Data gathering and refining

The first step revolved around the development of a key list of commodities important to the particular industry and collection of data based on their pricing history. Also, external data such as transportation indices and economic indicators such as CPI, PPI, BLS surveys play a major role in influencing the commodity price.

  • Step 2: Development and validation of the price forecasting model

The second step revolved around the development of an appropriate model to predict the commodity costs over a definite time window. Also, the validation of the developed price forecasting model is essential to enhance price forecasting strategies, as it can help reduce the time allocated for information gathering and enable e retail companies to focus on devising effective strategies.

  • Step 3: Development of a precise price forecasting dashboard

To devise an effective price forecasting dashboard, it is essential to consider what-if scenarios for predicting commodity cost by manipulating the key cost drivers. The developed price forecasting model enabled the client to improve business productivity by leveraging the use of valid predictions to enhance pricing decisions.


Key questions answered in this commodity price forecasting engagement include:

E Retail


Benefits of the Engagement:

The commodity price forecasting experts at SpendEdge helped the e retail industry client to enhance their procurement efficiency by devising an effective price forecasting model. Commodity price forecasting also enabled the client to gain detailed insights into the different categories within the supply network.

Why incorporate price forecasting solutions in the retail industry?

“Price forecasting deals with the collection and analyses of the demand and supply information in real-time. It offers comprehensive insights into pricing trends and also offers a detailed prediction of the short and long-term prices of various commodities.”

Globally, new imperatives have emerged out of complex market landscapes besides cost savings; thereby, compelling e retail companies to view the role of procurement through the prism of innovation, risk, flexibility, cost, and speed. Also, since procurement deals with prices for diverse categories, it is, therefore, essential for an organization to devise robust pricing strategies. Several firms still rely on industry experts to understand the market trends and cost drivers of their forecasted prices, whereas, a few prefer mathematical models to forecast future prices.

Our Findings:

Implementing price forecasting solutions helps e retail professionals to focus on pricing strategies to drive organizational value. This helps them to emphasize on adding value to procurement rather than merely cutting procurement costs.

Effective pricing strategies also help e retail firms to develop procurement intelligence capabilities, which proves to be challenging even for the most resourceful organizations. Therefore, it is essential for businesses to develop a strong foundation in price forecasting, as it helps deliver breakthrough value and elevates the role of procurement by offering detailed insights into the administrative spend data.


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IR19

Commodity Price Monitoring Solution Helps an ICT Industry Client Stay on Top of The Price Fluctuations and Improve Procurement Decision Making

Category Overview

Over the years, the ICT industry has become dynamic due to the rapid technological advancements and developments. Additionally, the growth of the ICT industry is driven by the rapid emergence of cloud computing technologies in several areas including consumer IT, healthcare, and enterprises. Also, significant developments in the field of mobile and wireless communication technology have created numerous growth opportunities for the ICT industry. However, according to SpendEdge’s commodity price monitoring experts, the significant challenge in adequately planning and financing the use of ICT in development programs and pressure to minimize management and administrative costs is one the primary reasons for the industry’s sluggish growth.

Consequently, to retain their foothold in this market space, ICT industry players have started adopting commodity price monitoring solutions. Moreover, SpendEdge’s commodity price monitoring solutions help clients to stay on top of the price fluctuations and improve procurement decision making.

The Procurement Pain Point and Insights Offered

A global player in the ICT industry wanted to assess the impact of sourcing raw material on the supply chain. Additionally, the client wanted to obtain a list of key suppliers and gain insights on the latest price trends and fluctuations in the market space to negotiate better contractual terms with their current suppliers and gain a competitive edge over their peers.request free proposal

SpendEdge’s commodity price monitoring experts followed an in-depth two-step research methodology, which included primary and secondary research coupled with qualitative and quantitative data collection procedures to address the client’s issue.

During the course of this commodity price monitoring engagement, the ICT industry client was able to monitor the price pressures and identify risks across the supply chain. The client was also able to compare their cost structure and products to that of their peers through a comprehensive competitive analysis. This helped the client gain a competitive advantage over their competitors and manage price risks of raw materials across the supply chain.

Fundamental questions answered in this commodity price monitoring study include

ICT IndustryBusiness Outcome

This commodity price monitoring engagement helped the ICT industry client stay on top of the price fluctuations and improve procurement decision making. Additionally, the client gained insights into the price forecasts for the upcoming months.

To know more about our commodity price monitoring solutions

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IR19

SpendEdge Announces the Launch of a New Procurement Market Research Report on the Global Predictive Analytics Market

The constant growth of the IT industry every year and the demand from BSFI sector to discover frauds, make predictions about security prices, and perform churn analysis for customer retention is fueling the predictive analytics market.

LONDON: The strategic procurement management report on the predictive analytics market is an integral part of SpendEdge’s IT category portfolio and offers a deep-dive analysis of the current supply market, factors influencing strategic procurement decisions, pricing models, supplier landscape, and procurement best practices. It also offers insights into the major supply market insights, demand-supply shifts, and key market developments to help sourcing and procurement leaders make smart purchasing decisions.

The increasing use of electronic payment modes has resulted in a major upsurge in the incidence of fraudulent activities. Such activities often reduce customer trust, brand value, and severe regulatory fines. This increase has triggered the growth of the global predictive analytics market. Furthermore, one of the major reason behind the increase in fraudulent activities are the prevailing fraud analytics tools. This leads businesses to use predictive analytics for better risk management and loss mitigation.

“Purchasing managers must focus on building a strong analytics infrastructure before implementing advanced analytics tools such as predictive analytics,” says Bhuvaneshwari Udayakumar, an IT procurement research specialist at SpendEdge.

Many businesses lack knowledge of predictive analytics which restricts them from making sound strategies for procurement and reduces their negotiating powers with suppliers. The application of this technology requires a strong grasp of few major concepts such as advanced statistical concepts, machine learning, modeling skills, and a high degree of familiarity with big data platforms. This leads to purchasing managers paying for incorrect or unnecessary.

Need more insights on this report?

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This procurement report on the predictive analytics category offers insights on:

  • Supply markets, growth drivers, and challenges
  • Key suppliers and assessment of their capabilities
  • Procurement best practices
  • Negotiation strategies and cost-saving opportunities
  • Pricing models and category innovations
  • For a full, comprehensive list, view our report

 

 

Get unlimited access to all our reports. Our Insights platform ready-to-use procurement research reports, latest supplier news, innovation landscape, markets insights, supplier tracking, and much more at the click of a button. Request a free demo now

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Sustainability Practices in the Cocoa Market – Empowering the Cocoa Farmers

Cocoa has a wide variety of usage in the food industry. It is primarily used in cocoa powder, chocolate, bakery items, cocoa butter, cocoa liquor, and spices. North America and Europe are the biggest markets for cocoa products due to higher demand for confectionery purposes. The cocoa market is experiencing a steady growth with a CAGR of about 3%. Different stakeholders including farmers, primary buyers, traders, and end-consumers are involved in practices that can make the value chain of cocoa market Request Free Samplesustainable. Also, since big corporations absorb a major chunk of profits in the cocoa market, members of the cocoa value chain have developed sustainability practices to empower cocoa farmers. Here are some of the best sustainability practices in the cocoa market:

Soil Mapping

Extensive cocoa farming can deplete the farming land of essential nutrient content and composition of organic matter over decades. As a result, local associations and NGOs are working to undertake soil mapping to understand the soil composition and increase productivity and yield. It also involves recommending the use of organic and inorganic fertilizers to apply good agricultural practices.

Community Development Programs

Suppliers in the cocoa market such as Cargill, Barry Callebaut, and Blommer Chocolate Company are planning to implement a series of community development programs to empower local communities producing cocoa. It includes the provision of safe drinking water, sanitation and hygiene, and health and nutrition. To empower the cocoa farmers, suppliers have also ensured the inclusion of women farmers to increase overall family income and improve school enrollment rates and attendance to reduce instances of child labor.

Farmer Support Programs

Suppliers in the cocoa market are considering launching financial schemes and crop protection programs to increase a farmer’s overall revenue. The program also ensures farmers get fair prices for their produce and extended credit facilities. Apart from this, they also get on-the-field training and access to high-quality farming equipment, fertilizers, and storage facilities.

Read more about the sustainability practices in the cocoa market along with supply market landscape, pricing, and procurement insights in SpendEdge’s upcoming procurement report on the cocoa market

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Top Challenges for Supply Chain Management

An efficient supply chain management can help companies to save costs and enhance customer delight by offering better services. It’s capable of streamlining logistics and warehousing, and alongside saving such costs, it also optimizes the inventory cost. However, it Get More Infoalways isn’t as easy as it seems, and managers do face different roadblocks in devising an efficient supply chain management strategy. The volume and complexity of transactions done today make managing supply chain a daunting task. Here are some of the challenges supply chain managers face while managing the supply chain.

Customer Demand

A modern-day customer is difficult to understand as they want products at a good price. Also, different clients have different priorities; some can wait but want a good deal while others are ready to pay a premium to procure immediately. Managers are always faced with a trade-off between cost, quality, and time. Managing differing priorities across the supply chain is a challenging task for the supply chain management system.

Demand Unpredictability

Demand unpredictability is a phenomenon that is ever-present. But, over the last few years, there has been an increase in the number of factors contributing to demand fluctuations. Thus, demand forecasting has been a complex task even with the introduction of sophisticated forecasting models. An efficient supply chain management system relies heavily on accurate demand forecasting. Deviations in the forecast need to be adjusted into the supply chain planning system and require strategic adjustments.

Inventory Management

Most companies stock a variety of products and SKU’s, which are recorded in a supply chain management system. The discrepancy in actual stock versus recorded stock can result in a loss. Apart from this, managers also face the challenge of estimating optimal stock levels of each product and product categories. Forecasting the optimal stock level can be a challenge for the supply chain management system due to the unpredictability of the market, which can result in inventory shrinkage and stock redundancy.

Hence, even though supply chain management system is capable of optimizing the supply chain in numerous ways, it cannot do it all. However, a modern-day ERP system can solve many of the mentioned problems with proper planning. Thus, companies are turning towards technology to address the problems with their supply chain management systems.

To know more about the challenges for supply chain management.

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Procurement Market Intelligence Solution Helps a Leading FMCG Company

Category Overview

Media buying services involve planning, negotiating, and procuring advertising space on various media channels such as televisions, radios, newspapers, magazines, and the internet. The purpose of this process is to maximize the reach to the target audience in an economical and efficient manner to maximize ROI.

The Procurement Pain Point

A leading FMCG company had long-standing relationships with multiple media agencies. Therefore, the client wanted to consolidate its media buying and planning to ensure that it was getting the strongest capabilities and the best prices for its sizable media budget. The FMCG company wanted an in-depth understanding of the suppliers’ evaluation and selection criteria, supplier engagement models, and cost breakup and positioning. SpendEdge’s team of research analysts carried out a procurement market intelligence study to assess the supply market landscape and shortlist media agencies. This study also helped the client gain deep insights on pricing models, cost-saving opportunities, price negotiation strategies, service level agreement terms, and contract terms and conditions.

Procurement Insights Offered and the Outcome

To provide a better understanding of the supply market, our team of analysts carried out a comprehensive research process comprising of primary and secondary research. The analysts referred to a vast database of secondary resources to get a better understanding of the current market trends, sourcing and procurement best practices, and pricing models. Also, detailed discussions were carried out with industry leaders, category managers, client consultants, and procurement managers to gain a detailed overview of the latest trends in procurement, key suppliers operating in the market, and the service level agreement terms.

Business Impact

This procurement market intelligence study offered the client with a better understanding of the supply market which helped them identify the key media buying and planning service providers. This further led the client to better strategy formulation in terms of price negotiation, cost structure, sourcing and procurement best practices, and supplier engagement models.

This procurement intelligence study helps a leading FMCG company understand the global media buying and planning market in terms of supply market landscape and price negotiation strategies.

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