SPA’s Strategic Purchasing Analytics help distributors to quickly and reliably identify and capture cost savings opportunities that are often overlooked in the course of day-to-day cost management.
The data volume and analytical complexity that come with managing the costs of thousands of SKUs can be daunting. As a result, distributors commonly tackle the challenge from a reactive rather than a proactive posture, doing their best to mitigate upcoming cost increases with imperfect data, while rarely finding the time to initiate cost reduction negotiations with their vendors. The outcome of this process is significant missed cost savings opportunities that typically represent 2% to 4% of COGS.
SPA’s Strategic Purchasing Analytics module applies a statistical framework to the problem, efficiently and comprehensively assessing dozens of relevant variables across your entire product portfolio to quantify and prioritize cost savings opportunities and then package those findings into actionable recommendations.
The Strategic Purchasing Cube is a representation of SPA’s statistical model which scores each vendor and each item across three primary dimensions: profitability, cost-to-serve, and leverage.