How To Get Spend Analysis Right

Purchasing.com has a great three-part feature on the ABCs of spend analysis. The package covers how to acquire the data skills necessary for spend analysis, how to bring that data together, and how to change the way your company sources. These stories coincide with Purchasing.com's yearly survey of distributor performance.

Here are of the highlights.

Acquire the Data Skills:

"With current software and computing, there is so much data available. The key is to understand what is important, where to find it and develop mechanisms to mine and process the data quickly and easily."

"Configure data sets based on a structure that sets place holders for what you want to measure, even if you don't have the data yet. Know where you're going with your data so you don't have to backtrack later and modify data structures all over again. Try to set aside space for categories you'll need that might be empty now but crucial in the future."

"Some results from spend analysis can be surprising, such as discovering the reason for long leadtimes or the fact that using different suppliers for prototype and production parts can add unnecessary costs."

(Photos above by yomanimus, CC 2.0)