Savings from Supply Chain Initiatives

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Integrated Supply Chain Analytics

Harness the power of integrated supply chain analytics to unlock substantial savings and strategic advantages. Our service focuses on deploying advanced analytics tools that analyze large datasets to identify inefficiencies and pinpoint areas where costs can be significantly reduced. By integrating these analytics into your supply chain operations, we provide you with a granular view of spending patterns, inventory levels, and supplier performance. This deep insight facilitates more strategic decision-making, enabling you to optimize inventory turnover and reduce holding costs, leading to a leaner, more responsive supply chain. Our analytics-driven approach ensures that you capitalize on every opportunity to enhance efficiency and reduce operational costs, driving better financial outcomes and boosting your competitive edge.

Strategic Supply Chain Impact

Strategic Supply Chain Impact

Strategic supply chains account for 50 to 70 percent of total business costs. By integrating best practices into supply chain improvements, companies can realize significant financial benefits. Aligning these initiatives with overarching corporate objectives, employing efficient methodologies, and meticulously tracking outcomes are essential strategies for boosting profitability. 

  • Cost Reduction Strategies: Implementing efficient methodologies.
  • Performance Tracking: Monitoring supply chain enhancements.
  • Corporate Financial Impact: Tangible cost savings.

Ariba's Savings Pipeline Management

Ariba’s sophisticated solution revolutionizes procurement processes by optimizing the management of the sourcing pipeline, meticulously tracking savings initiatives, and furnishing enterprises with actionable insights. This advanced system significantly boosts efficiency, reduces manual inaccuracies, and enhances transparency in upcoming sourcing operations. 

  • Strategic Supplier Partnerships: Collaborative supplier relationships.
  • Process Optimization: Streamlining operational workflows.
  • Technology Integration: Leveraging digital solutions for efficiency.

SAVINGS FROM SUPPLY CHAIN INITIATIVES

Maximizing Corporate Financial Impact

Cost Reduction

Implementing strategies to minimize expenses and increase profitability through efficient operations.

Process Optimization

Streamlining workflows to enhance productivity and achieve operational excellence across departments.

Risk Mitigation

Identifying and addressing potential threats to ensure business continuity and resilience.

Supplier Management

Establishing strong partnerships to optimize supply chain performance and foster collaboration.

Data Analytics

Leveraging insights to make informed decisions and drive continuous improvement initiatives.

Innovation

Embracing new technologies and methodologies to drive growth and stay ahead in the market.

Negotiated Saving Realized Saving
Definition

Savings on a new or existing deal or contract that was driven by the Procurement team in collaboration with their business partners
Portion of identified savings that finance confirms will have a direct impact on the budget / forecast or be used to offset expense increase else where
Business Drivers
Aligned with Contract Negotiator’s goal to maximize value of each contract for their business partners
Aligned with business goal of expense reduction.
In Scope
  • Negotiated savings from “baseline” (defined below) for new or existing contracts
  • Rate Reductions
  • Savings from a proposed increase
  • Innovative recommendation resulting
  • Savings that has a direct impact on the budget or forecast or used to fund spending in other areas
  • Must be tracked (cost center impacted, effort accelerated, etc.)

Out scope
  • Favorable outcomes (example: additional work added to the contract for the same cost)
  • These will be captured separately for reporting purposes
  • Business unit driven scope or volume
  • Any identified savings that does not meet the above criteria
  • Favorable outcomes and business unit scope or volume changes

Measurement
  • Contract of 1 year or less:
  • Savings over the 12 months following contract signing
  • Contract of more than 1 year :
  • Savings over the 12 months following contract signing + NPV of Out Year Savings (5% Discount Rate)
  • Savings confirmed by Finance through performing budget analysis (operating or capital) and analysis of impact to the Income Statement.

High Level Process
  • Establish Baseline: starting point for negotiation as agreed upon by the business partner.
  • Upon Contract Signature, calculate difference between final price and baseline using the method described in the above Measurement section.
  • Confirm savings with Procurement Management.
  • Same as left + …
  • Submit identified savings and backup materials to Expense Management team
  • BU / CU Liaison will work with local finance teams to determine realized savings.

Negotiated SavingRealized Saving
Definition

Savings on a new or existing deal or contract that was driven by the Procurement team in collaboration with their business partners

Portion of identified savings that finance confirms will have a direct impact on the budget / forecast or be used to offset expense increase else where

Business Drivers
  • Aligned with Contract Negotiator’s goal to maximize value of each contract for their business partners
  • Aligned with business goal of expense reduction.
In Scope
  • Negotiated savings from “baseline” (defined below) for new or existing contracts
  • Rate Reductions
  • Savings from a proposed increase
  • Innovative recommendation resulting

Savings that has a direct impact on the budget or forecast or used to fund spending in other areas
Must be tracked (cost center impacted, effort accelerated, etc.)

Out Scope
  • Favorable outcomes (example: additional work added to the contract for the same cost)
  • These will be captured separately for reporting purposes
  • Business unit driven scope or volume

Any identified savings that does not meet the above criteria

  • Favorable outcomes and business unit scope or volume changes
Measurement 
  • Contract of 1 year or less:
  • Savings over the 12 months following contract signing
  • Contract of more than 1 year :
  • Savings over the 12 months following contract signing + NPV of Out Year Savings (5% Discount Rate)
  • Savings confirmed by Finance through performing budget analysis (operating or capital) and analysis of impact to the Income Statement.
High Level Process
  • Establish Baseline: starting point for negotiation as agreed upon by the business partner.
  • Upon Contract Signature, calculate difference between final price and baseline using the method described in the above Measurement section.
  • Confirm savings with Procurement Management.
  • Same as left + …
  • Submit identified savings and backup materials to Expense Management team
  • BU / CU Liaison will work with local finance teams to determine realized savings.

Sustainable Supply Chain Practices

Adopt sustainable supply chain practices to drive long-term savings and enhance corporate responsibility. Our consultancy service assists businesses in implementing eco-friendly practices that not only reduce environmental impact but also decrease costs and improve brand reputation. By optimizing resource usage and reducing waste, we help you achieve more efficient operations which contribute to both profitability and sustainability goals. Our approach includes evaluating your current supply chain processes, recommending sustainable alternatives such as green logistics and circular economy models, and supporting the integration of these practices into your everyday operations. This strategic shift not only aligns with global sustainability trends but also attracts eco-conscious consumers, providing a significant advantage in today’s market.

Enhancing Supply Chain Efficiency

Streamlining Operations for Optimal Performance

In the current competitive market, enhancing supply chain efficiency is critical. Businesses can reach peak performance and secure a competitive advantage by implementing streamlined processes and adopting innovative technologies. Strategic planning and ongoing improvement efforts are key to reducing costs, shortening lead times, and boosting overall operational efficiency, thereby meeting the dynamic demands of customers and evolving market conditions.

The adoption of technology is crucial for maintaining a leading position in today’s supply chain environment. By integrating state-of-the-art software solutions and automation tools, businesses can significantly improve efficiency, enhance visibility, and increase agility throughout their operations. This technological integration supports streamlined management and robust growth across all facets of the supply chain.

Data Analytics

Extracting insights for informed decision-making.

Automation

Streamlining processes to enhance efficiency.

Innovation

Driving continuous improvement and competitive.

FAQ

OUR KNOWLEDGE

Stay Updated With Our Consulting Services

Stay informed about our latest consulting offerings and industry insights.

Efficiently manage suppliers and costs to maximize value.

Enhance competition, reduce costs, and expedite decision-making.

Validates initiatives, ensures accountability, and drives continuous improvement.

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