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Analysis in purchasing

Buyers must proceed analytically when evaluating suppliers, products and prices. In the following article we name the most important analyzes that matter. By keeping all data in databases, inorder supports all analysis requirements. We also provide various dashboards that help to visualize data and make critical aspects visible. We are happy to implement customization requests for you.

NEW Function - Procurement Analytics:

Data becomes analysis and analysis leads to decisions. Never again make decisions without data based on gut feeling!

We can now quickly and easily create procurement analytics dashboards and adapt them to the needs of the stakeholders. In addition to the data from inorder, our procurement dashboard also uses data from other databases. In this way we make the purchase analyzable with a click.

Just like inorder (adaptable, web-based, optional to IT infrastructure):

Analysis of suppliers

Supplier management includes evaluating the supplier as a company. This applies to existing and potential suppliers. How strong are you in working together? What is your product range like? Are they inexpensive and, above all, flexible? What about meeting delivery dates? What are the options for connection? (Admittedly: We are more interested in the connections as a software manufacturer.) Are there any major suppliers with whom difficulties exist or are to be expected? Then supplier management would have to quickly look for potential alternatives.

Purchase prices

A supplier moves in a world of costs that depends on his internal conditions. Understanding this world of costs is a key to success for an above-average purchasing performance, because this results in the prices that the supplier has to invoice his customers. With a good understanding of this world of costs, for example, price increases can be forecast. 

In the same way, options for price reductions are more apparent. The cost side of the supplier includes his raw material, his personnel and production costs. It is important to assess the extent to which he himself can possibly reduce his costs and pass this reduction on through lower prices.

Negotiation terms

Every supplier (seller) knows that he has to negotiate, but not everyone is good at negotiating. If so, it would have to be analyzed to what extent usable results can still be achieved with the seller of the supplier - from a purely psychological and tactical perspective. In some industries with fast product cycles and often changing conditions, there is often negotiation. It depends on the flexibility of both sides. Negotiation and savings potential can be made visible through clearly structured data.

Analysis of global sourcing options

In principle, every company can buy its supplies globally. Of course, this also entails risks and also requires legal and commercial expertise in foreign trade. It is to be analyzed to what extent foreign suppliers are really cheaper and to what extent they are trustworthy. The final step is to weigh the price advantage against the effort and risk.

Price analysis of raw materials

The suppliers often produce semi-finished products from raw materials and justify their own price increases with increased raw material prices. That may or may not be true. Smart buyers, for their part, observe developments on the raw material market and thus estimate the extent to which the supplier really needs to tighten the price screw. The supplier's personnel costs - also a popular argument - should be monitored. Perhaps the supplier is too expensive because of a suboptimal personnel policy. This wealth of data can be made visible with the help of transparent dashboards.

Analysis of contracts and inherent risks

Contracts should provide security for buyers and sellers. It is worth analyzing them from this point of view. This includes a comprehensive supply of information. What are other supplier contracts like? For example, how long does a competitor stay with its suppliers? Which suppliers are there in this sector? This is the only way to correctly assess opportunities and risks and adequately reflect them in the contract. inorder supports you in document analysis.

When was the last time you checked your contracts for bonuses? Currently (October 2019) we are comparatively advanced in research with deep learning in contract data analysis, for example to automatically report kickback payments from the system. If this is of interest to you, please contact us.

Supplier Relationship Management

Supplier Relationship Management (SRM) is the management of relationships with suppliers. It includes the evaluation of the suppliers and leads to the selection of reliable and inexpensive suppliers who give the purchasing company a competitive advantage through better delivery conditions. The direct connection of the suppliers in inorder guarantees the loyalty to suppliers and the control of changing metrics. The stored catalog releases the buyer from the task of carrying out supplier analyzes and evaluations again for every requirement. Price changes must be actively approved by the buyer.

The buyers receive support from inorder in the procurement process through:

  • Maintaining relationships through consistent communication
  • Evaluation of complaints (in both directions, including that of the supplier to the company, for example in the case of late payments)
  • Constant improvement of agreements
  • Interlinking of the ERP systems of the company and the supplier in order to be able to automatically trigger and auction orders
  • Analysis of weak points
  • Permanent research on the market with regard to potential suppliers

inorder manages all purchasing data and sources of supply. This includes information on deliverable products, possible risks, conditions and quality. The supplier's ERP system can be connected to inorder. The added value arises from the bundling of all data available to the applications in the system landscape. 

eProcurement systems

eProcurement Module:

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We'll do it together Shopping as easy as online shopping.