Deloitte Analytics

Deloitte Managed Analytics

Supplier Evaluation Analysis
Making intelligent purchasing decisions can be essential to
improving your bottom line, as procurement can account
for as much as 50% or more of a companys costs. But
with supplier networks and customer markets expanding
globally, gaining visibility into the behaviors that drive
spending and addressing root problems is becoming
more difcult. Supplier data source systems typically lack
the reporting and analysis capabilities required to locate
top-performing suppliers, enhance collaboration among
suppliers, and carefully match procurement strategies with
customer demand.
Todays most effective supply chain organizations are not
only controlling costs, but also nding the suppliers that
t their specic business models while integrating every
component of the supply chain to generate an immediate
and positive impact on their product, costs, and customer
satisfaction levels.
The Deloitte Managed Analytics (DMA) Solution
DMAs Supplier Evaluation Analysis application is a
managed analytic solution that integrates procurement
data from multiple source systems and presents it to users
over the web through interactive reporting dashboards
and scorecards. The application provides leading industry
metrics and key performance indicators to monitor supplier
performance. It creates drillable reports and scorecards to
investigate performance from a high-level view down to
individual purchases and shipments.
The DMA Supplier Evaluation Analysis reports provide
visibility into procurement operations, costs, and supplier
performance. Users can view past and present supplier
performance to identify improvements and poor variances
against the plan. Reports rank suppliers and display detailed
metrics such as Purchase Price Variance (PPV), percentage
on time, percentage of items rejected, and per-unit
acceptance. Scorecards display supplier performance
based on PPV and on-time delivery percentage as well as
total on-hand inventory levels and actual vs. forecasted
spending history.
Potential Benets
Improve overall supplier performance:
Rank suppliers on cost compliance,
on-time delivery, item ll rate, order lead time,
quality defects
Provide access to key performance
information to customers, suppliers, and
third-party service providers
Perform complex supplier cost variance analysis
and determines root cause factors such as
Purchase Price Variance (PPV), mix and volume
changes, foreign exchange impact, and cost
infuence from inventory costing methodologies
Monitor and enforce compliance to
minimize leakage
Get a turn-key solution in place rapidly:
Integrate and organize data across systems
Leverage prebuilt analytics and integration
technology
Focused IT and business resource support
Fast, low risk approach:
Rapid deployment in 10 to 12 weeks
Fixed cost deployment
Deep domain experience
Software-as-a-Service (SaaS) delivery model
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Opportunity Flags
DMA Supplier Evaluation Analysis can provide value to
organizations that wish to improve performance in the
following areas:
Integrating and using procurement data from multiple
source systems from all suppliers
Monitoring supplier performance across any dimension of
the business
Presenting daily updates on supplier performance and
procurement operations
Reducing costs and wasted effort in procurement activities
Finding the best and worst-performing suppliers to resolve
supply chain problems
Viewing variance against plan and the underlying causes
of variance in price and performance
Enhancing collaboration and performance among suppliers
by sharing supplier scorecards
Key Business Questions Answered:
How can you identify savings opportunities and prioritize
projects to maximize savings?
How can you monitor and enforce compliance
procurement strategies?
Which suppliers are the most compliant in terms
of costs, on-time delivery, etc.?
How can you determine year over year supplier
cost productivity?
How can you rank your suppliers on critical criteria such
as cost compliance, on-time delivery, item ll rate, etc.?
Do your suppliers have access to their daily performance?
What can be done to improve supply chain
collaboration among customers, suppliers, and
third-party service providers?
Sample Reports:
Supplier Evaluation
Purchase Price Variance (PPV)
Supplier Cost Productivity
Supplier Scorecard
Supply Chain Benchmark Scorecard
Sample Metrics and Key Performance Indicators:
Total spend
Number of items purchased
Number open and closed purchase orders
Number of items received
Average item cost
Supplier defect rate percentage
Supplier on-time delivery percentage
Supplier invoice accuracy percentage
Supplier inventory on hand
Supplier purchase price variance
Item substitutions
Overall supplier score and rank
For more information, please contact:
Rich Cohen
Principal
Deloitte Consulting LLP
+1 215 446 3435
ricohen@deloitte.com
Steve Morandi
Deloitte Managed Analytics
+1 781 810 2508
smorandi@deloitte.com
Dan Spillett
Deloitte Managed Analytics
+1 201 736 7509
dspillett@deloitte.com