Goods Spend Analysis Report Essay Example for Free

Goods Spend Analysis Report EssayGathering complete and accurate selective information of total goods returning requires the addition to spend data from all relevant sources both within and outside the caller-up. Good data cannot be get a lineed when spend analysis is not support by stakeholders including customers, suppliers, and internal clients. Step Two Form a spend analysis team The company needs to realize that spend analysis is likewise critical to be assigned as an additional duty of purchasing department.A spend analysis team should be formed and dedicated to collect and analyze data and perform more strategic functions such as future spend forecast, budget review and adjustment, and program research. Step Three establish data quality and target an efficient data management process A considerable number of purchase orders or purchasing activities are not electronically transmitted in the company therefore the accuracy of purchasing records must be examined.In or der to obtain complete, accurate, and consistent data, all stakeholders should identify an effective data/record management process to ensure accuracy. Step Four Create a proper classification schema Its genuinely unlikely that the company will adopt an automated spend data management system designed for spend data extraction, cleansing and classification process. The spend analysis team will dupe to determine how to group spend data around distinct commodities with the concept of strategic sourcing in mind.Spend data should be categorized at the item level, providing visibility and allowing comparisons of detailed attributes across suppliers and commodities. Step Five Implement spend analysis reports on a periodic basis The monthly spend analysis reports should highlight the top suppliers, internal customers, commodities receiving spend. Other reports addressing accumulated savings and process improvement should also be enforced and shared with other stakeholders for the purpos e of involving them in advanced sourcing plans.Reporting will provide a high visibility into disbursal and help develop a cost-saving model to be used in strategic sourcing. Specific Key Triggers The company has a high percentage of single sourcing for direct commodities as they have signed contracts with the suppliers in Asia who manufacture different product lines for them. They have negotiated low rates for the products that will be manufactured and shipped to Canada and then directly distributed to customers (mainly retailers and gift stores).Since the company has a large customer base instead of a large supplier base, the key triggers to be considered for focus are high dollar apprise of direct goods or product lines, high dollar value of make-to-order for customers, high dollar value of substantiating goods for internal customers, and high number of transactions of indirect goods for internal customers. Procurement Strategy and Spend Analysis All the products must pass safe ty and lead testing in Canada before selling and distribution.The procural strategy the company currently employs is low cost with standard quality. The goods spend analysis recommended in this essay will work well with the companys procurement strategy. It is true that the company is struggling to reduce costs and cut spending at all levels, however, they cannot afford sourcing products with lower quality as the spending on inspection and disposal will dramatically rise. In order to monitor and manage spending properly, strategic spend analysis is the only effective tool they can use to achieve the goal.