Sourcing is a search process for the suppliers that can offer the best fit to the purchasing company on the criteria of costs, innovation and quality. The numbers of potential suppliers, the complexity of purchasing contracts (service, product, contract period, etc.), and the financial issues relating to stocks and the IFRS asset valuation, drive companies to use decision-support tools to optimize their procurement.
Eurodecision draws on its sound business analytics and supply chain experience to work on a range of key issues:
- Procurement optimization by increasing forecasting reliability to reduce inventories while sustaining the requested service quality level. There are generally four stages to consider:
– establishing robust, dynamic sales forecasts for the eligible items
– setting the inventory parameters and location to ensure procurement is properly managed
– defining the optimum order quantity/frequency pairing from factories or suppliers
– building and securing the business management KPIs (WCR*, SLA*, stock coverage, etc.)
*WCR =Working Capital Requirement, SLA = Service Level Agreement
- Help with assessing tender bids by addressing several considerations:
– minimum/maximum number of suppliers
– maximum volume to allocate to a supplier for enhanced risk management
– supplier commitment term and batch sizes, etc.
This approach efficiently builds in a variety of constraints, offers broader consultation, and manages the most successful sourcing solution.