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According to industry analysts, sourcing activities account for 30 percent of the time-to-market cycle for products. Based on this time, it is critical that solutions enabling supplier negotiations automate and streamline negotiation activities and bid analysis.
The automotive product development cycle can require more iterative negotiation types, such as request for information (RFI), request for proposal (RFP), and RFQ. The process also can require the ability to source entire multi-line-item bill of materials (BOMs) simultaneously. In addition integrating with change management and PDM systems is important as the engineers work closely with suppliers.
Effective management of product costs requires the buyer to understand total cost and supply risk across multiple tiers of the supply chain when analyzing and awarding bids. Constraint-based bid and allocation optimization can enable automotive manufacturers to quickly analyze bids and perform multi-supplier allocation.
This capability can take into account total landed cost and specific business rules, such as minority requirements and supplier performance in deciding the allocation.
Key capabilities of the i2 solution for supplier negotiations and bid analysis can include:
- An aggregated, normalized view of enterprise-wide spend and/or demand information and visibility of purchased items and materials to better leverage spend
- Ability to dentify and develop strategic supplier relationships, including supplier allocation analysis, new/alternate supplier identification, supplier performance evaluation, and supplier risk analysis
- Global company-wide procurement rationalization at an individual-item level
- Visibility and control over subcontractor spend, demand, and contract compliance
Benefits of the i2 solution for supplier negotiations and bid analysis can include:
- Improved turn around time for the quoting process
- Ability to have multi-round bidding and an audit trail of activities to avoid misrepresentation
- Enabled bid optimization
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