- Manufacturing Use Case
OPTIMIZE SUPPLIER SPEND
How Profisee can help manufacturers further improve and optimize supplier spend through a consolidated global view of suppliers and materials.
Further Optimizing Supplier Spend
Either through organic growth or acquisitions, most manufacturers have multiple plants and business lines. In many cases, they will also have multiple ERP, procurement, or inventory management systems. This creates complexity, and makes optimizing supplier spend extremely time consuming, difficult, and error prone.
Data Domains
Supplier, Material / Part / Component
Business Problem
Difficulty rationalizing suppliers & parts
Teams Impacted
Procurement, Operations, Finance
MDM Impact
Optimized terms, volume discounts, inventory use
Business Problem
Data Strategy
Outcomes Business Problem
Overspending on Critical Components
- Inconsistent discount & payment terms: Different divisions acquire from the same suppliers, but with inconsistent terms negotiated discounts.
- Inconsistent credit terms: Purchases across business lines are made with different credit terms to the same supplier, impacting free cash.
- Inability to negotiate on volume: Without visibility into 100% accurate aggregated spend for each supplier, procurement teams are unable to negotiate optimized pricing and terms.
- Unnecessary purchases: Due to inconsistent data practices across business lines, total material and part inventory is obscured, leading to unnecessary material spend.
Data Strategy
Leverage a Supplier 360 for Business Insight
- Consolidate supplier data & terms: Even with multiple ERP and/or procurement spend, MDM creates a consolidated view of suppliers allowing organizations to easily identify inconsistencies and negotiate for optimized terms.
- Aggregate total supplier spend: With a consolidated view of all supplier activity across business lines, procurement can easily and accurate understand total supplier spend.
- Automate part/material cross-referencing: With robust fuzzy matching and machine learning, MDM can identify like parts and materials even when data is inconsistent.
Outcomes
Reduce COGS & Optimize Working Capital
- Negotiate better discounts to reduce COGS: With further optimized discounts, total cost of goods sold is reduced and margins improved.
- Negotiate better payment terms to optimize cash management: With consistent and optimized payment terms, cash management is improved.
- Leverage credit to optimize working capital efficiency: With consistent and well negotiated credit terms, working capital is freed up and cash flow improved.
- Avoid duplicate / unnecessary material spend & excess inventory: With unnecessary and duplicative material and part purchases avoided, capital is freed up, inventory costs reduced, and cash flow improved.
