LevaData survey reveals performance gap in procurement

Tuesday 30 October 2018 13:49 CET | News

US-based fintech LevaData has issued a survey on Strategic Sourcing and Procurement uncovering a widening performance gap in the procurement industry.

LevaDatas results of its 2018 Cognitive Sourcing Survey on data-driven procurement capabilities by medium to large manufacturing companies addressed the concerns of senior executives who oversee over USD 420 billion in annual direct material spending. Nearly all of respondents believe that that a data-driven procurement process is vital to achieving long-term value, cost reductions and efficiency gains. LevaDatas survey showcased an increased number of manufacturing executives making progress toward digital transformation.

The survey documents key metrics of best-in-class versus average performers, according to supply chain executives, such as:

  • Strategic Control Across Supply Base - average organizations engage in competitive bids with 40% of their suppliers at least once a year. Best in class organizations cover over 85% of their supply base annually.

  • Cycle Time Request for Quote (RFQ) - 3-4 days versus 31 days.

  • Sourcing Event Frequency - Ongoing, regular discussions on a quarterly or more frequent basis versus once-a-year events.

  • Management Tools for Strategic Sourcing - Best-in-class procurement organisations use integrated market intelligence systems that provide a consolidated view of the market versus siloed business intelligence tools or information from direct supplier relationships.

  • Cross-Functional Collaboration - Best in class procurement organizations engage in cross-functional collaborative decision making across supply chain, finance, engineering and external manufacturing organisations.

A key takeaway from the survey was the real gap and opportunity to enroll more sources of insight from outside the organisation and integrate them with historical data and internal insights. By developing negotiation strategies, organisations will have access to a wider scope of information that is relevant to potential sourcing decisions.

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Keywords: LevaData, US, e-procurement, Strategic Sourcing, Procurement, digital transformation, Cycle Time Request for Quote, 2018 Cognitive Sourcing Survey
Countries: World