You saw a situation where spend analytics could be used over and above the standard analysis of the transactions http://faoblog.com/processes-ap-spend-analytics-contd/

Spend analytics has a lot of application.

On the purchase side, some areas where it can help are:

  • Purchase logistics and execution
  • Replenishment
  • Vendor Credit Analysis
  • Contracts/Deals Management
  • Order Consolidation
  • Cost of purchases optimization
  • Freight Planning/Scheduling
  • Allocation
  • Replenishment Optimization
  • Repacking & Shipping
  • Trailer/Yard Management
  • Cross-Docking
  • Physical Inventory Check
  • MIS
  • Reverse Logistics

Why analyze?

Spend analysis helps with how optimize procurement costs across geographies and also helps assess strengths and opportunities for handling spikes and troughs in a planned manner.

Analysis Leads to Understanding

How healthy is the procurement channel and the dedication of employees for optimizing costs incurred by them? It help in:

  • Know your supplier’s potential.
  • Learn which products are good and reliable.
  • Find out which businesses are becoming prohibitive, adding extra cost to your end product.
  • Understand your requirement trends and the cost of urgency.

Analysis Leads to Cost Savings Opportunity

Businesses can use Spend Analysis to:

  • Reduce cost.
  • Plan your purchases based on your sales demand.
  • Help local businesses.
  • Attract new vendors.

 

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