1. Spend (Supply Chain) Analytics Day I

2. Why do Companies have a Procurement Department ?
In conclusion, our major contract expires tomorrow, we have no idea what we want, and no knowledge of the market. It is time to pass this to the procurement team.

3. Let’s buy some Cauliflower

4. `2.50 `5.00 `20.00 Why you end up paying more?
Cauliflower is sold double the rate at APMC after adding transport charges
Cost in retail markets
A farmer is paid this amount to buy a kg of cauliflower

5. Spend Analytics…
An average company can save 11% with a modern spend analysis system.
~Aberdeen Group

6. Spend Analytics: The Whole Spectrum
2. Supplier assessment
1. Spend analysis
3. Supplier identification
8. Invoicing, reconciliation and payment
4. Sourcing
7. Order fulfillment
5. Contract management
6. Procurement

7. Top 6 Reasons for Spend Analytics

8. 1
Know exactly how much does your company spend with the supplier before negotiating a contract.

9. 2
Negotiate with the final legal entity not the subsidiary.

10. Final Legal Entity … ICRA Companies Group Credit Rating Management
Consulting
Software & Analytics
BPO
ICRA Techno Analytics Ltd
BPA Technologies Inc
100% wholly owned
ICRA Sapphire Inc.

11. Final Legal Entity … Adatis(UK) Adatis(Italy) Adatis(Canada)
90% Owned
Adatis(Canada)
60% Owned
Adatis(US)
90% Owned
Adatis(Germany)
45% Owned
Adatis(France)
50% Owned
Adatis(Switzerland)
50% Owned
Adatis(Canada)
40% Owned

12. How to obtain the Final Legal Entity …
Bureau Van Dyk
Dun and Bradstreet
DUNS Number
How Clean is your data?

13. 3
Concentrate your effort on the large suppliers

14. 4
Categorize your spend to know where to go

15. Categorize the data … What will be the category?
UNSPSC: United Nations Standard Products and Services Code
Segment or Market Sector
Family or Market Sub Sector
Class or Commodity Group
Commodity
How to categorization ? (Create Rules?) ?

16. 5
Who buys What from Whom and When and Where

17. Buy What? From Whom? Who Result of Filtering by Cost Center
Supplier
Commodity
Who
Cost Center
Result of Filtering by Cost Center
Result of Filtering by Supplier
Result of Filtering by Supplier & Cost Center
Result of Filtering by Supplier, Cost Center & commodity

18. 6 Stop Maverick Spend Maverick:
Someone who is independent and not a follower

19. Assignment (10 marks) . . .
Collect a bill from one of the chain stores like:
Metro
Spencers
Big Bazaar
Etc
The bill should contain at least 10 line items. (else use multiple bills)
Identify the UNSPSC Code of the line items.
Submit a scanned copy of the bill(s) along with your analysis.
Why we had the second UAT.
Impression of ICTEAS not being serious, cause we should be able to generate the right report, right accountability.

20. Project (30 marks: 15 fixed + 15 relative) . . .
The excel file contains a list of suppliers for Bad Idea Company.
Cleanse the data (PDF provided).
Use a distance algorithm (like Levenshtein) to calculate the distance between the suppliers.
Identify the suppliers that can be similar by selecting suppliers whose distance are less than a threshold (use a threshold around 5).
Verify from Google that these are not independent entities.
Your project should contain the following:
List of similar suppliers and their distances.
R Code or Rapid Miner Process
Why we had the second UAT.
Impression of ICTEAS not being serious, cause we should be able to generate the right report, right accountability.