Supply chain improvement programmes and expenditure analysis

In November 2002, with Aberdeen Group and Penton Media of the supply chain team, 157 global expenditure analysis process are studied. The study found that with global enterprises covering show one little secret: few companies truly understand their spending is, what to do with the product and which vendor.

Although the analysis about 80% of the surveyed companies believe spending on their success as "very important" or "essential", 13% analysis of supply chain managers feel that spending "important", remaining 5% thought it was "somewhat important," and nobody's choice "doesn't really matter". Surprising is that only 51% has a formal analysis of expenditures. In General, larger than a small business are more likely to be regular expenditure analysis. Expenditure analysis of standardization may prompt large companies to reduce the 16% of the total expenditure, and small and medium enterprises can only be 11.8% reasons.

If you do not pay attention to, or in a hurry or particular circumstances expenditure analysis, leads to segmentation of sales tactics, resulting in improper purchase decision and lost cost saving opportunities. According to Aberdeen's conservative estimate, spending analytical Enterprise lost opportunities for savings of $ 260 billion a year.

see this result, it is no exaggeration to say, insufficient expenditure analysis is a kind of epidemic, the enterprise cannot control costs to maximize business performance.

expenditure analysis of impediments

if expenditure analysis so critical, why is a challenge for many enterprises? Expenditure analysis has long been a time-consuming and labor-intensive process that requires consolidation and analysis from the internal and external data from multiple operational systems extract. No wonder, the most typical expense analysis project will take several weeks, or even months to complete. Another study found that Aberdeen investment activities occupy more than 1/3 a Manager to manage daily work time.

Aberdeen believes that the five obstacles hampering effective expenditure analysis is:

spending on different data source information from multiple business systems within the enterprise, including accounts payable, General Ledger, such as ERP and procurement systems. Key expense information also exists in external systems, including credit cards, purchasing cards (Procurement Card,P-card) system, automatic clearing house (ACH,Automated Clearinghouse), as well as outsourcing services provider business systems.

collects data from these disparate systems has been handmade, time-consuming process. Even worse is that most companies only expenditure information drawn from the internal financial systems. Such narrow orientation, so that business is not easy to see the full range of corporate spending, forcing the enterprise under the condition of incomplete information to develop procurement and supply chain management strategy.

inaccurate or incomplete expenditure data is needed for more effective expenditure analysis information in ERP and other non-structured system to find out. These messages often have errors or loss of critical data, such as vendor name, product attributes, or account code.

specializing in the limited classification capacity data error correction expenditures requires employees to use products and data property domain expertise, different employees have different professional skills, this can lead to data detection, cleaning and sorting activities produce unpredictable results. More complex is that companies try to automate this process, cleaning and sorting task to the data products and services, lack of understanding of IT personnel. This often leads to classification of expenditure information error.

trying to get out of recession in the global economy, cost control has become the new business mantra. Suddenly lost the ability to increase revenues, companies are forced to find ways to control costs in order to maintain profits.

now, most enterprises has been made in reducing internal operating costs out, and start looking at the extended supply chain costs. This is quite reasonable: expenditure on external suppliers body, is the largest one in most corporate spending, every $ 1 of income would probably spend 50 cents on top of this. In order to effectively control costs in this regard, first of all is necessary for thorough analysis of the company's expenditures.

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