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Pricing and Purchasing Service Understanding supplier costs Enhancing supply chain efficiencies.

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Presentation on theme: "Pricing and Purchasing Service Understanding supplier costs Enhancing supply chain efficiencies."— Presentation transcript:

1 Pricing and Purchasing Service Understanding supplier costs Enhancing supply chain efficiencies

2 Global Insight Pricing and Purchasing Service When it comes to planning purchases, setting budgets, and bidding proposals, it can be tough to make the right decisions. Global Insights Pricing and Purchasing Service can help: Benchmark buys versus market prices Understand market fundamentals and the impact on suppliers cost structures Effectively assess supplier quotes Enhance strategic timing of buys to capture maximum savings Improve project cost estimation process

3 For over 25 years, Global Insight has been the recognized leader in providing detailed price and wage projections to companies around the world. Our credentials are second to none. 23 offices in 12 countries 325 experts fluent in 30+ languages 170 industries and 200+ countries covered 140+ advanced degrees Global Insight Credentials

4 Commodities and Wages Our Pricing and Purchasing Service contains detailed global information for over 800 commodities and wages. Extensive historical market data combined with our projections can help you more effectively manage your supply chain costs. Detailed Global Historical Data Global Material Prices and Wages Forecasts based on market fundamentals

5 Assess Supplier Quotes Assessing supplier quotes is simple with the Cost Analyzer. This Excel-based tool lets you access our commodity cost structures and detailed market projections. By analyzing an industrys cost structure and end- market demand you can easily determine if a price hike is justified and whether there is room for negotiation.

6 Assess Supplier Quotes Solder and Supplies (Represent 5% of cost) 0% Increase Capacitors, Resistors & Various Components (Represent 33% of cost) 1% Decrease Semiconductors (Represent 10% of cost) 2% Increase Equipment/Components (Represent 15% of cost) 2% Increase Labor (Represents 37% of cost) 2.5% Increase The increase is too high. An increase of 1% is justified For example…Your circuit board supplier has increased their price by 3%. Is it justified?

7 Our Cost Analyzer allows comparisons of market prices to suppliers costs, including productivity adjustments that tell the real story. Margin Analysis – How Firm is that Quote? Benchmark Costs It appears as though you are getting a good deal… …until you include productivity adjustments. A total market perspective, which includes demand, cost, productivity, and market drivers, allows you to identify industry margins and evaluate supplier performance. Armed with this data, you can go back to the table and negotiate a better price. Construction Machinery and Equipment

8 Prices are at a Turning Point Understand Markets Understanding the market is key to projecting price changes. All too often, purchasers make the mistake of using last years increases to forecast this years prices. About half the time, they are paying more than they need to. Global Insight forecasts whether costs will rise or fall, allowing you to negotiate the best price or determine the best time to buy. 0.6 0.9 1.2 1.5 1.8 2.1 2.4 2.7 199619982000200220042006 -8.0% -6.0% -4.0% -2.0% 0.0% 2.0% 4.0% 6.0% Global Insight Industrial Materials Price Index, Jan 2002=1.000 Industrial Production, G7 Economies, Year-Over-Year Change

9 Avoid Cost Overruns Our Pricing and Purchasing Service simplifies this process by offering over 1000 different proxies, enabling you to find the closest possible match. Choosing the right index is critical to projecting future expenses. Too broad or too narrow a category might cost you millions. -4 -2 0 2 4 6 8 200020012002200320042005200620072008 PPI, AircraftPPI, Nonferrous ForgingsCPI (All Urban) The Wrong Index Can Cost Millions! (Pct Chg)

10 With our vast selection of global prices, wages, and exchange-rates, you can select the indicators most applicable to your supply chain… 1000+ Indicators …and we instantly present past commodity/wage performance and future trends, allowing you to benchmark purchases and project future costs.

11 Compete Globally The Cost Analyzer contains over 250 international price and wage indexes and a wide assortment of exchange rates. The service tells you how much wages are today… and how much theyll grow tomorrow. Where to Locate a Manufacturing Facility? 2004 Compensation and Annual Percent Change in Unit Labor Costs $5.00 $10.00 $15.00 $20.00 $25.00 $30.00 $35.00 U.S.TaiwanKoreaGermany Hourly Manf Comp -4.0% -2.0% 0.0% 2.0% 4.0% 6.0% 8.0% Pct Chg Hourly Comp - leftUnit Labor Costs - right To compete globally, you need to assess multiple locations around the world. Effective global expansion requires consistent price and wage intelligence across countries and regions.

12 More than just a database, Global Insights Pricing and Purchasing Service gives you the analysis behind the numbers, enabling you to understand industry fundamentals and the drivers of price changes. Analysis Behind the Numbers

13 With Global Insights Pricing and Purchasing Service, you will: Achieve greater accuracy in cost benchmarking, quotation analysis, and project-cost estimation Gain more leverage in contract negotiations More effectively set purchasing budgets and defend them with management Improve supply chain management Get the Upper Hand

14 The Savings Add Up Our Pricing and Purchasing Service finds the hidden money in your supply chain to maximize savings! The Center for Medicare and Medicaid Statistics uses our detailed price and wage forecasts for setting reimbursement rates for health facilities. The U.S. governments Defense Contract Audit Agency (DCAA) uses our inflation projections to evaluate contract proposals for many federal agencies. A transportation equipment manufacturer used our Pricing and Purchasing Service and saved $2.2 million in one buy. A diversified machinery manufacturer used the Cost Analyzer and saved $60 million in one year.

15 Contact Us Find the money hiding in your supply chain. Call us today: North and South America Mark Ulmer +1.202.481.9229 Europe, Asia and Africa Jenny Sleep +44.20.7452.5199 For more information:

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