Bridging the Decision Abyss with Actionable Intelligence
What is the decision abyss, and how can we bridge it? These are critical questions for procurement professionals right now. That’s why we just held a two-hour session with the Art of Procurement on Navigating the Decision Abyss: Managing Direct Spend in Chaotic Times. Here are some of the main points we discussed.
The decision abyss lurks inside your organization.
First, a decision abyss develops when the supply chain planning team makes forecast decisions without having proper visibility into the parts that go into products. Many large manufacturing operations have limited visibility into, collaboration with, and communications between sourcing and supply chain organizations. Whether it’s a lack of collaboration or limited access to advanced tools, the siloed approach to decision-making leads to considerable lost opportunities for cost savings and risk mitigation. It also hampers the ability to make quicker, more informed, and better decisions when purchasing materials.
The decision abyss is everywhere.
From new product introduction to existing products, a lack of visibility at the part level means you’re leaving money on the table.
- New product introduction––There are always reasons why suppliers are trying to increase prices. However, if you don’t have good data, you can’t negotiate better pricing. By getting a part-level view of your bill of materials, you can quickly understand part costs and risks, which leads to more sophisticated price negotiations with suppliers.
- Existing products––Many large manufacturers don’t know if the price they are paying is a good or bad one because they are often working with limited or disparate data. Tapping into a platform that aggregates community, market, and internal data quickly and proactively surfaces better pricing and emerging risks.
Data to the rescue––conquering the decision abyss.
What really matters for companies in the decision abyss? Making better decisions. Most organizations lack access to good, clean, and easy-to-understand data to support informed decision-making. It is a hard battle to win if you are simply using a spreadsheet or talking to only the supplier. At LevaData, we’re addressing the decision abyss problem with our integrated platform. We use a lot of data—more than most organizations are using. By pulling in dozens of internal, market, and community data sources, our platform contextualizes this information. We help bridge the decision abyss by improving visibility, collaboration, and communication across direct materials sourcing and supply chain organizations.
Leveling up. Changing procurement’s role in the organization creates new value.
Procurement teams have historically been underserved and are increasingly being asked to do more with less while also being expected to make better decisions. A siloed structure, limited data, and spreadsheet-based decision tools make procurement’s job harder. Adding the incredible pressure from finance, suppliers, and supply chain creates a recipe for burnout. But a culture shift can literally change how direct material sourcing gets done and repositions procurement from a cost-saving force to a top- and bottom-line value driver for the organization. Here’s how to get started.
- Bridge the communication gap––Define rules and a common language to communicate inside your organization.
- Think of data as a language––Good, clean data positions procurement as a lighthouse for your organization. When armed with contextual data, procurement’s new role will be making more informed, better decisions. After all, adding value resonates with everyone inside your company.
- Crawl, walk, run––Because we’re talking about shifting mindsets and culture, start with limited projects. As you start to gain traction, it will be easier for everyone to see what’s possible when they start tapping into all this data.
Changing how direct material sourcing gets done.
There are lots of vendors that aggregate and visualize data at the product level. LevaData gets more granular by providing detailed data at the part level. We understand that a single part can delay the manufacturing of your product. That’s why our platform helps you know everything you need to know about a part with an easy-to-understand interface. As a sourcing professional, you can look by product, part, or ingredient and find cost savings and risk at the part level. Simply stated, LevaData helps you do your job better. And by doing that, we’re also helping to elevate the value of procurement inside your organization.
Watch the webinar now to learn more about my thinking on the decision abyss.