Vendigital’s talented team of procurement professionals use the very latest and most advanced methodologies and tools to create great solutions. Whilst working with our customers, we frequently install these systems and train internal teams in their use, allowing our work to be sustained and developed. These tools include:
Sourcing Optimisation
The key to success is to understand what is the right tool to use and when
to use it, and equally, what is not the right tool. For example, e-sourcing
can deliver outstanding benefits in all areas of spend. In many situations,
the use of an online auction is also extremely useful. We have developed
a unique analysis approach that determines if an auction would be beneficial.
In conducting this analysis, it also highlights those spend areas
that are not suitable, and if appropriate, what needs to be changed to
make them suitable. Watson Marlow used this technique and found the outcome
very satisfactory.
Strategic Purchasing Framework
Vendigital has developed Strategic Purchasing Framework tools to help understand
the nature of relationships with key incumbent suppliers. This allows
purchasing professionals to determine, for each project, the correct
approach to the marketplace and the right objective for the project.
Distance Sourcing Analysis
When considering sourcing from low cost economies, careful and detailed
analysis is required before deciding whether a category of spend is suitable.
To assist in the decision making process, Vendigital has developed a
unique “Distance Sourcing Analysis” tool which identifies
if a spend category is appropriate for long distance, medium distance
or even local sourcing.
The Distance Sourcing Analysis tool considers the four main characteristics of a spend category which have a direct impact on its suitability for long distance sourcing i.e. Logistics, Manufacturing Requirements, Design & Development and Transferability. Each of these category characteristics is divided into a further four sub-sections in order to specifically show what makes a spend category suitable for long distance sourcing or what might present a problem.
Detailed data for each spend category is entered through an easy to use interface and the analysis tool produces graphical and numerical reports on each category's optimum long distance sourcing position against each characteristic and sub-section. The level of deviation in each area leads to a recommendation to source from long distance, middle distance (for example Eastern Europe for a UK company), nationally or locally.
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eRFx is an acronym for Electronic Request For x - where x can be Information (RFI), Proposal (RFP), Quote (RFQ), or Tender (RFT).
Vendigital has developed a comprehensive eRFx platform that enables buyers
to communicate with multiple suppliers in an efficient and controlled fashion.
The benefit of these tools is illustrated below. The diagram shows how
attempting to involve just seven potential suppliers leads to a large number
of communications, each taking up a buyer’s valuable time. Each communication
also creates the risk of inadvertently giving each supplier a slightly
different picture, and of omitting relevant information.
Vendigital’s eRFx software can be used to:
In having all suppliers respond to the same questions and requests in the same manner via the eRFx platform the buyer will be comparing suppliers in a fair way – apples vs. apples.
The reality is that unless the contract is very large, the time required to handle all the communications is often not available and the number of suppliers is reduced to a point that makes the negotiation process manageable. The result is that true market price may not be achieved because the invited sample of the market is not representative of the whole market.
Vendigital's eRFx platform enables a buyer to deal with as many potential suppliers as is desired. The process supports simultaneous communications with each potential supplier all channeled by the buyer who has complete control and retains records of all communications.
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Vendigital provides full project management services. From the outset, the Vendigital team works closely with customers to find market price for its particular materials/areas of spend. Vendigital will then create the Requests for Quotation (RFQ) and undertake an extensive supplier headhunting exercise to ensure that a comprehensive supply market is assembled.
Tenders are then conducted using Vendigital’s eRFx platform and the price negotiated via online reverse auctions. Once a new optimum supplier has been identified through the Vendigital tender process the buyer’s next challenge is to implement the change of supplier. This can be time consuming, and at times political so the independent project management of this activity by Vendigital can prove very useful.
Vendigital would, through visits and questionnaires fully qualify potential suppliers with financial background checks and by obtaining samples of similar products. Vendigital would then advise on the best “match” of supplier for the buyer. Once a number of suppliers have been short listed Vendigital would request representative samples to prove the suppliers capability and finished product quality.
Once the suitability of a supplier has been confirmed Vendigital would collate a contract to detail the terms and requirements of the contract. Vendigital would then implement structured project management tools and reporting techniques to ensure that the performance of the new supplier can be monitored.
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The online auction is a well-proven mechanism for undertaking price negotiations with multiple potential suppliers. Proven to be more effective than traditional "across the table" techniques, a correctly run auction provides buyers and suppliers with the ability to determine market price for an item without having to physically be in the same location.
Online negotiations take a number of forms from the online reverse auction where a single parameter such as price is considered through to value auctions where multiple parameters such as payment terms, consignment stock, line-side delivery etc. can be negotiated simultaneously.
In an online reverse auction, invited suppliers place successively lower bids for a defined contract. The bidding event typically takes around 30 to 90 minutes. A successful outcome during this bidding period is naturally dependent upon the preparation preceding the event.
Vendigital's online auction platform has been instrumental in delivering consistently eye-catching results for our customers. This tool is used by our own teams when conducting full e-sourcing projects for our customers and is also available for buyers to incorporate into their own procurement toolkit so that they can run their own online bidding events
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This tool analyses spend related data and identifies potential purchasing savings opportunities.
The new on-line version of the Savings Optimiser was launched in January 07. This allows our customers to carry out spend analysis and opportunity identification on their own as well as via the more established route of Vendigital assisted Savings Optimiser workshops.
The on-line Savings Optimiser retains all the functionality of the previous versions, including Propensity for Leveraged Tendering, Strategic Purchasing Framework, Relative Time & Return, Category Rankings and the Purchasing Project Planning tool.
In addition, the on-line Savings Optimiser uses a new technique called Market Calibrated Prediction Technology (MCPT) in order to calculate its output. Monthly feeds on material price trends and quarterly calibrations based on the latest actual Vendigital purchasing project results are fed into the Optimiser. By taking this market information and the spend data entered by our customers and applying a number of complex algorithms the Optimiser predicts the likely range of savings which are potentially achievable as well as showing the more strategic attributes associated with each spend category.
Once the initial data is entered, it only needs to be updated after each major purchasing activity or as spend patterns change. A versatile range of editing and saving functions allows you to analyse spend at any time by site or by spend category on a regional or global scale, and the live market feeds mean the output is always as up to date and as accurate as possible.
Whether or not you are an existing user of the previous Savings Optimiser please contact us for more information on the benefits this powerful tool can bring to your company.
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The Vendigital Spend Management System (SMS) is an on-line application that complements traditional ERP or MRP systems. Designed by purchasing professionals for purchasing professionals, the SMS provides instant accessibility to current and historic spend data via a secure and user friendly interface.
The SMS takes a monthly feed of delivery information from existing ERP / MRP systems. Data integrity is maintained to an extremely high level through an exception and validation process through which buyers correct identified erroneous or missing data each month. By conducting this on a monthly basis, the exercise remains small and manageable and the data remains clean.
Data is viewable by part, supplier, supply category, manufacturing site, buyer and platform. For multi-site companies this means consolidation and leverage opportunities are easily identifiable.
Also included is market price tracking functionality. Individual part numbers can be linked to up to 3 material indices. The SMS will track actual pricing against these indices and will raise an alert if the price of a component deviates by more than a specified amount from the market price. Other alert functions include contract expiry, rebate threshold alerts and amortisation volume alerts. All of these act as an additional pair of eyes for a buyer and are tremendous aids to managing spend and ensuring unnecessary cost is not incurred.
In addition, the SMS has extensive reporting and analysis functionality. Sensitivity analysis allows the creation of “what if” scenarios to ascertain exposure to raw material or currency fluctuation. For example, you could run a report to find out what the financial impact would be to your company if stainless steel rose by 20% over the next 12 months.
Reports are fully bespokable and can be configured to report spend in a number of different ways as well as savings, based either on actual deliveries or on forecasts for the coming months.
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A vital element to the success of a market pricing project is to create a representative marketplace. For some items there are hundreds of potential suppliers and it is important to speak to a representative sample of the total marketplace to ensure that market price will be determined. For other items, there may be only a handful of companies in the world that are potential suppliers and it is important to find them to create a liquid marketplace. Either way, Vendigital has extensive experience, supplier databases, overseas agents, specialist resources and the linguistic skills to help you identify the optimum supplier wherever they may be in the world.
"For a global manufacturing business like Britax, having an agile and competitive supply chain is critical to our long-term growth in profitability. By working with Vendigital, we’ve had the highest-quality resource focused on achieving this across our procurement spend."
Andrew Stafford
Former CEO
Britax Childcare
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