Case Study: Using Advanced Sourcing Optimization to Negotiate Metals Contracts.Abstract: The automotive industry is famous for its relentless focus on cost. A rapidly evolving competitive landscape means that automotive suppliers need to be more nimble and innovative. An automotive supplier approached MetalMiner for assistance with its annual contract negotiations for carbon steel and stainless steel. In a rising cost market, this manufacturer sought a more efficient means to evaluate and award contracts to minimize price risk, reduce supplier risk, and place more spend under management to solidify margins (ultimately improving EBIDA). The supplier’s top goal was to ensure a cost-competitive supply base without a loss in quality or delivery. It also sought to rationalize its supply base and reduce supply risk for select sub-categories.
Sourcing Robotics - Adoption and Automation of Best Practice Strategic SourcingAbstract: Automation for simple tasks drives savings and reliability but automation of complex tasks drives strategic benefits. Back-office functions such as invoice payments processing are usually the first tasks to be automated because they are easier to formalize into simpler rule-based systems. But it would be a mistake to conflate operational efficiencies with the strategic advantages that are possible when the more sophisticated aspects of executing large and complex sourcing projects are addressed by AI. But automation in it’s own right is not sufficient. We need to automate best practice rather than accelerate poor practice. In this white paper we chart the path to Automation of Sourcing that is 1) founded upon tools for best practice, 2) trained with data from best practice examples and finally 3) supported via automation of best practice. We refer to the stages in this evolution, collectively, as Sourcing Robotics because the AI is interacting with the real world in the form of decision making that is contingent upon responses from bidders. Various aspects of AI that include Machine Learning, Optimization and Robotics are relevant to different aspects of the sourcing lifecycle. This paper describes the conditions needed for full automation of sourcing, the progress to date and key milestones achieved as well as offering a look to the future to see what can be reasonably expected in the near term.
Optimization: Higher Adoption is Where True Value Lies CoverAbstract: Optimization is the ultimate sourcing strategy but it is grossly under-utilized. An honest appraisal of its failure to become the de-facto standard approach in all mature Procurement functions is overdue. That’s why this paper starts by taking a look at why adoption rates are historically low before discussing what is changing in the marketplace and how a radical increase in adoption could be just around the corner. As a buyer, you have heard a lot about optimization, but what you really want to know is if optimization can be used on your problem, scale appropriately, adapt to unexpected developments, and be driven without the help of an expert resource. If you cannot use the optimization solution, and, more importantly, cannot use the solution to interact with your team in the context of a sourcing event, it does not matter how revolutionary the platform is or how many awards the platform has won.
That’s why, in this paper, we’re going to address the often overlooked, but still critical, softer side of optimization in contrast to the harder, more technical side that is traditionally addressed. Why?
Sourcing Optimization for Public ProcurementAbstract: Keelvar has supported hundreds of government tenders in the European Union that require compliance with EU public sector directives. There is a dearth of literature on the subject because most government bodies are reluctant to venture into a territory where there is scant case law. This is despite most legal experts advising that optimization backed approaches for evaluating tenders are compliant and few would doubt that the process aids efficiency and speed.
This white paper examines the process of public sector tendering using optimization and the benefits attached in the context of European Union procurement rules. Adherence to US and other jurisdictional rules is not examined but lessons from the EU approach can be relevant elsewhere nonetheless.