How does one get a detailed understanding of the supply market?
Solution: In order to develop effective sourcing and negotiation strategies, it is imperative that teams have a detailed understanding of the supply market. Applying the findings to the SWOT and Porter’s Five Forces framework allows companies to develop robust category strategies.
Supply Market Analysis is broken down into 3 phases
- Industry Overview
- Supplier Analysis
- Market Forces and Trends
AIMDRIVE-AI leverages AI to promote proactive Supply Market Analysis by enabling the following:
- Market Profiling
- Industry Code Identification: AIMDRIVE-AI automatically identifies the industry code and description once the category is entered, making it easier and more efficient for teams to analyze the market and categorize suppliers.
- Market Size & Growth Opportunities: By gathering and analyzing ICPs from major players, AIMDRIVE-AI provides valuable insights into market dynamics, helping teams understand the overall market landscape and identify potential growth opportunities.
- Historical Price Trends & Price Drivers: AIMDRIVE-AI analyzes historical price trends and price drivers, giving teams insights into market behavior and helping them anticipate price fluctuations in the future.
- Supplier Analysis
- Supplier Profile Creation: AIMDRIVE-AI enables teams to create company profiles for major suppliers by analyzing cost and pricing data.
- Market Forces and Trends
- Cost Drivers Identification: By developing industry cost profiles (ICPs), AIMDRIVE-AI helps sourcing teams understand the cost drivers in the market. This enables teams to make informed decisions about cost optimization and sourcing strategies.
- Porter’s Five Forces Analysis: Using data-driven models, AIMDRIVE-AI aids in conducting Porter’s Five Forces analysis, helping teams identify market opportunities, assess supplier power, and evaluate potential competitive threats.
- Price Analysis and Benchmarking
- Supplier Quote Comparison: AIMDRIVE-AI enables the comparison of supplier quotes against market benchmarks, ensuring the competitiveness and fairness of pricing. By analyzing ICPs, AIMDRIVE-AI helps identify discrepancies in supplier pricing, ensuring pricing aligns with industry standards.
- Price Trend Insights: AIMDRIVE-AI provides insights into price trends and key price drivers, helping teams understand pricing dynamics and make informed pricing decisions.
- SWOT and Pareto Analysis
- AIMDRIVE-AI supports teams in conducting SWOT and Pareto analysis by developing ICPs and Should-Cost Models, which help identify weaknesses in suppliers’ price quotations by comparing them with industry standards.
- Risk and Opportunity Assessment
- Identifying Opportunities for Cost Savings: By analyzing cost drivers and supplier performance, AIMDRIVE-AI helps identify opportunities for cost savings and supply chain efficiencies, enabling teams to optimize sourcing strategies.
- Strategic Recommendations
- Data-Driven Sourcing Strategies: AIMDRIVE-AI provides actionable insights to help develop customized sourcing strategies based on real-time data, supplier performance, and market trends.
- Quick Adaptation to Market Shifts: Real-time data from AIMDRIVE-AI allows teams to adjust sourcing strategies quickly in response to evolving market conditions, ensuring strategies remain aligned with business goals.