Plan to spend time cleaning data
Though the integration went smoothly, an unexpected hurdle cropped up toward the end. In deployment, Perry learned what many leaders discover when they put supplier analytics in place--that cleaning and aligning the spend and supplier data between the systems and data feeds can be a quagmire. Properly mapping the data is a crucial step because it provides a mechanism to aggregate the spending and supplier information.
The data has to be cleaned as well. This aspect can cost $1 to $10 per SKU (stock keeping unit) the first time the data is cleaned, noted Hope-Ross.
"It was something I underestimated," said Perry. It took a manual effort to map the old data to the product codes in the new system, he added.
Since the project's launch, Dun & Bradstreet rationalizes Bayer CropScience's supplier data and merges redundancies to keep the vendor master clean every quarter. Data from the Bureau of Labor Statistics on inflation indices maps back to commodities, providing a benchmark for the prices of products. All this data helps Bayer CropScience's purchasing department do more meaningful analyses, making them a real proactive force for cost reduction within the company.
rtment do more meaningful analyses, making them a real proactive force for cost reduction within the company.
Purchasing earns its place
The spending visibility gained through spend analytics has also helped the purchasing group better prioritize the efforts of a small staff--a real improvement over the static queries and Excel spreadsheets that were used before the new tools.
"We were spending a lot of time on things that were small, like acquiring office supplies and copy machines, rather than R&D, contracts, and larger purchasing," explained Perry, adding, "We were missing a lot of opportunities."
The purchasing group now regularly meets with internal customers and is able to pull up the customer's cost centers on screen. The data consoles kick start what Perry calls collaborative discussions that begin with the question, "How can we help your business save money?"
"Very few people would question the value of increasing sales and increasing margins," said Hope-Ross. "And I would argue that this is the way you need to look at this. You really don't have a choice to put some management expertise behind improving this huge amount of spending in the quest for lower costs and improved margins."
Are you keeping track of procurement costs? TalkBack below or e-mail us with your thoughts.
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