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Goods Spend Analysis Report

Goods Spend Analysis Report

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Published by y-hammoud
goods spend analysis
goods spend analysis

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Published by: y-hammoud on Jan 30, 2012
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03/15/2015

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Goods Spend Analysis
Assignment #1 (Module 2)
 Name: Yasser HammoudID#: 2002659Course : Procurement and Supply ManagementInstructor : Brian FlemingDate: January 18, 2012
 
#1. In order to conduct a goods spend analysis for my organization, the following steps must betaken in the initial phase of this project:a. Corporate Buy-in: Despite its benefits in terms of cost savings, repetitive functions and improvedcustomer service, the top management may not be willing to undergo such change and therefore,such issue must be addressed at the high executive level. Management should be convinced throughmotivation and education who in turn will lead others to accept and realize the importance of thegoods spend analysis for their organization. b. Staffing: Once the organization is convinced that goods spend analysis is vital for the organizationas a whole and in fact is a requirement rather than a choice, then a designated team should be formedand responsibilities should be assigned. Team members must give this project a seriousconsideration and should be professional, experienced and result oriented.c. Realistic Goals: Setting a realistic goal for the good spend analysis team is a challenge. The teamleader along with all team members should clearly identify their objective of what they want toachieve as a result of their mission. Once the objective is identified which will be: cost savings andadministrative efficiencies then the team should design a road map on how to reach their goal.d. Data Management: In order to reach their goal and achieve accurate results, the team mustprepare a reliable data base of information. Therefore, before the initiation process, the teammust extract, validate, cleanse, classify, enhance and classify data. By managing and preparing thedata in such way, then the team will be ready to start the analysis process without any issuesregarding data and ultimately reach their goal of strategic sourcing based on the validity of theinformation available to them and consequently a lower product cost, higher product quality and
 
more efficient supply chain process within the whole organization. A challenging part of preparingintegrated data that the company could face is when procurement for the same product is done inmultiple locations or branches without proper coordination among supply chain operators within thesame organization. In such case, the goods spending analysis team will require more time, effortsand higher expenses in order to import and consolidate data which to be used for the analysis.e. Communications and Reporting: The team must generate precise and meaningful reports to theappropriate authorities within the organization by highlighting important information on spendingwho in turn will make strategic sourcing decisions which will lead to new contracts awards andmonitor compliance. Reporting period should also be decided by the executive team based on thecomplexity of the business and its nature as well as their operational and future plans.#2. Specific key triggers for suppliers and their importance for the goods spend analysis teamshould be highlighted and given a great emphasis. Such triggers could be one or more of thefollowing list of concerns:a. High dollar value of commodities or services. b. High number of transactions for commodities or services.c. High dollar value for suppliers.d. High number of transactions for suppliers.e. High dollar value for internal customers.f. High percentage of sole source for any commodities, services, suppliers or customers.The common denominator among the above triggers is the word “high” which clearly indicates that

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