LevaData’s Annual Report Card on Strategic Sourcing and Procurement Uncovers Widening Performance Gap
SUNNYVALE, Calif.--(BUSINESS WIRE)--Oct 18, 2018--LevaData, the company that delivers applied AI to transform strategic sourcing and procurement, today released the results of its 2018 Cognitive Sourcing Survey on data-driven procurement capabilities by medium to large manufacturing firms, including those in high tech, consumer goods, industrial equipment, automotive, and life sciences industries.
The survey addressed the concerns of senior executives who oversee over $420 billion in annual direct material spending. Almost all of the respondents, 87 percent, believe that a data-driven procurement process is vital to achieving long-term value, cost reductions, and efficiency gains. This year’s survey showed that an increased number of manufacturing executives are making steady progress towards digital transformation — and the ones that aren’t are falling further behind.
“People know that digital disruption in the supply chain is already underway. Given this, we were greatly surprised to learn how many procurement managers are still using outmoded management tools,” explained Rajesh Kalidindi, founder and CEO of LevaData. “A world-class sourcing and procurement organization could examine at least 1.5 million data points affecting the supply chain, which is more data than any individual could possibly digest and respond to strategically. As more companies implement AI-powered strategic sourcing technologies, those that don’t will find themselves at a crippling disadvantage.”
A Significant — and Widening — Performance Gap
The LevaData survey documents key metrics of best-in-class versus average performers, according to supply chain executives. They include:
Strategic Control Across Supply Base: average organizations engage in competitive bids with just 40% of their suppliers at least once a year. Best in class organizations actively cover over 85% of their supply base at least once annually.
Cycle Time for Request for Quote (RFQ): 3-4 days versus 31 days.
Sourcing Event Frequency: Ongoing, regular discussions on a quarterly or more frequent basis versus once-a-year events.
Management Tools for Strategic Sourcing: Best-in-class procurement organizations use integrated market intelligence systems that provide a consolidated view of the market versus siloed business intelligence tools or information from direct supplier relationships.
Cross-Functional Collaboration: Best in class procurement organizations engage in cross-functional collaborative decision making across supply chain, finance, engineering, and external manufacturing organizations.
In reviewing these trends, Donald Farmer, a renowned data scientist and principal at Treehive Strategy, said his key takeaway was that “the real gap, and the real opportunity here, is to enroll more sources of insight from outside the organization, integrating them with historical data and internal insights, and then applying them to new and developing negotiation strategies. Organizations now have access to a much wider scope of information that is potentially relevant to sourcing decisions they make.”
Request a copy of the ebook summarizing the survey findings here.
LevaData helps global enterprises improve gross margins by reducing supply chain costs, with a focus on delivering measurable and accountable supply chain solutions and strategies that transform companies. The unique LevaData Cognitive Sourcing™ Platform allows customers to sense, recommend, act, and learn. Customers include leaders in the top global supply chain organizations, as well as medium-sized OEMs seeking to achieve best-in-class direct materials sourcing practices. LevaData is headquartered in Sunnyvale, California. For more information, visit www.levadata.com.
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CONTACT: for LevaData
Gabrielle Jasinski, 708-732-3913
KEYWORD: UNITED STATES NORTH AMERICA CALIFORNIA
INDUSTRY KEYWORD: TECHNOLOGY DATA MANAGEMENT SOFTWARE TRANSPORT LOGISTICS/SUPPLY CHAIN MANAGEMENT
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PUB: 10/18/2018 09:00 AM/DISC: 10/18/2018 09:01 AM