Sourcing & Supply Chain Intelligence
Be a smarter buyer: Use Supply Chain Intelligence
Aurora GPS helps organizations continually optimize their purchasing activities using Supply Chain Intelligence techniques. Of course, organizations must work to reduce input costs, and Aurora WDC can help provide insights to guide cost reductions in key areas while at the same time protecting relationships with important suppliers. But perhaps more importantly is the ever present potential for supply chain disruption. That can come from natural disasters or political instability, from new entrants, or from materials shortages. Aurora WDC will help you understand the inherent risks at each stage of the supply chain so that you can implement mitigation strategies.
- Understand the risks and benefits of cost-reduction plans, balancing improved margins and vendor consolidation with supplier stress and lack of redundant sources
- Explore the complete supply chain for pinch points, instability and inherent risks
- Develop counter-strategies and mitigations to protect your business operations
Business Outcomes You Can Expect from Supply Chain Intelligence
- Benchmark your spending to your competitors and to your category
- Improve margins
- Protect key vendor relationships
- Reduce risks in your supply chain
- Plan for strategic sourcing redundancy
- Understand geopolitical and environmental impacts to your supply chain
Supply Chain Intelligence Mission Portfolio: Vendor Consolidation and Unintended Consequences
A mid-sized electronics manufacturer approached Aurora GPS to understand the risks and benefits of its plans to consolidate its supply chain from 120 vendors to 25. The financial team estimated the savings at nearly 15 points of gross margin – a compelling case. The CEO was concerned that severing ties with nearly 100 suppliers could have unintended consequences.
Aurora GPS rigorously and objectively mapped the entire supply chain and confirmed that yes, many of the suppliers were either poorly positioned in their market or the result of one-time purchasing arrangements. However, the company missed a critical supply chain risk: Its largest component supplier was not only a single point of failure, but also in the process of being taken over by a state-owned company in Southeast Asia who happened to be a direct competitor.
Armed with this information, the company did make significant consolidations but also established relationships with three other suppliers of the components in question. The net impact was still a double-digit margin reduction but also a more stable supply chain in the face of industry consolidation.
Three ways to engage with Aurora GPS for Supply Chain Intelligence services:
Engagement Level 1: Individual Vendor Analysis
Approximate timeline: 30 days
Engagement Level 2: Comprehensive Supply Chain Intelligence and Sourcing Review
Approximate timeline: 4-8 weeks
Engagement Level 3: Ongoing Supply Chain Intelligence Review
Approximate timeline: Ongoing