enable cost management on a continuous basis
Today, brand owners depend on complex networks of outsourced design and manufacturing partners for their expertise and the cost advantages they provide. Procurement professionals negotiate component, assembly, and system contracts based on volume breaks and other performance factors with multiple types and tiers of partners.
“We see more companies investing in solutions to manage risk in supply networks, and part of that is understanding a multi-dimensional view to dynamic costs,” said Bryan Ball, vice president and principal analyst at Aberdeen Research.
“Multi-Tier Cost Management helps customers increase visibility and control in a world of accelerating supply chain complexity where demand is unpredictable and supply is not in your control,” said Mark Woodward, president and CEO at E2open.
captures frequent product and cost changes in an “execution BOM,” which is then integrated into multi-tier business processes for cross-network visibility and timely cost management.
“Not only are costs not static, prices paid to vendors do not always reflect the ultimate cost to the enterprise, as schedules and item-level pricing are frequently updated in the procurement process. For example, rebate schedules and programs can impact true cost, over a contract period, rather than just on the individual invoice or payment approval level,” said Jason Busch, founder of procurement blog Spend Matters. “A multi-tier approach can be transformational in obtaining a true picture of the overall cost drivers across the supply chain. There is not a replacement for this visibility.”