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Direct Material SOURCing & PROCUREMENT

Those Who Depend On Direct Material Depend On Allocation.

To simply consider sourcing an act of consolidating spend and driving cost savings is nearsighted.

For many, the function is superseded by the relationship with a particular supplier, such as in joint design collaboration – and there is no question that there are many influencers to the process.

To optimize the part lifecycle for supply chain, the sourcing function has to be flexible, capable, and connected to the entire lifecycle.

  • Flexible: Parts differ, materials differ, production needs differ, etc.; therefore, sourcing must be able to handle the wide range of needs.
  • Capable: One cannot manage the whole process if resources are working outside of the process (e.g., emailing Excel spreadsheets); therefore, sourcing must be able to execute on complex sourcing events within a dependable, auditable system.
  • Connected: Efficiencies are lost, and risk increases, when having to manually transferring information; therefore, sourcing relies on seamless, connected collaboration and information syndication.

Success is defined by how effectively one can execute on these, and the stakes are too high to make a mistake.

ASTRAS helps you govern the entire sourcing process, reduce processing error, and facilitate optimal decisions.

NDA Management

Unlike blanket NDAs with indirect suppliers, Tier-1 suppliers are privy to design concepts and projects early in the cycle. Each engagement may come with specific non-disclosure requirements, leading to a large number of NDAs, by supplier and by event, to manage.

ASTRAS helps our customers overcome the NDA challenges by:

  • Enabling you to define NDA requirements by each event.
  • Maintaining a central repository of agreements as it relates to each event, or even as it relates to each particular supplier.
  • Maintaining metadata with each agreement for easy reporting by different criteria.
  • Supporting auto-renewal of NDAs as agreement term approaches.

eRFx

Abraham Maslow suggested that “it is tempting, if the only tool you have is a hammer, to treat everything as if it were a nail.”

An RFP for office supplies is VERY DIFFERENT than an RFQ accessing material cost specifications (e.g., material costs, product weight, scrap, sold scrap, packaging, freight, etc.) and manufacturing costs (process steps, machine hour rate, shifts, manufacturing time, max pieces, tooling costs, construction time, etc.). Yet, many try to ‘force fit’ direct procurement into solutions made for indirect procurement. Others too often buck the IT mandate and try to manage their most strategic spend through emails and spreadsheets – opening themselves up to errors and risk.

Use right tool for the job.

ASTRAS helps our customers overcome the eRFx challenges by:

  • Supporting all eRFx formats, whether Request for Bid (RFB), Request for Information (RFI), Request for Proposal (RFP), Request for Tender (RFT), Single-item Request for Quote or Multi-item Request for Quote (RFQ).
  • Providing easy access to supplier information (e.g., performance history, risk ratings, etc.).
  • Enabling PLM/ERP integration to ensure current part and production information is known.
  • Offering Microsoft Excel upload of RFQ templates (with formatting and formulas) to accelerate events, while minimizing errors.
  • Monitoring purchasing team activity and tracking performance criteria.

Audit

Naturally, auction participants assume a commitment from the buyer if they win. But, are all participants comparable? What if, after the auction, the buyer has to adjust pricing to compensate for other factors?

Audit your suppliers, as needed, pre-auction/tender to ensure you are taking all considerations into account.

ASTRAS helps our customers ensure “apples-to-apples” comparison by:

  • Establishing necessary information and processes for any comparison.
  • Ensuring those suppliers needing additional scrutiny are reviewed, whether new supplier, new factory, new part/material, or other.
  • Leveraging collaboration workflows to involve internal resources, supplier contacts, or 3rd party auditors for assigned tasks (e.g., factory audit, HSE records, etc.).
  • Centralizing all documentation.
  • Applying bonus/malus factors to the auction event.

Auction

Surveys show that leveraging a reverse auction service will yield 10% higher savings, on average, than traditional negotiation tactics. These savings are quantifiable and undeniable, yet some still find institutionalizing the use of auctions a struggle. Why?

In part/material auctions, it isn’t simply a final price. It’s game theory; It’s a blend of considerations and price levers; and, It’s about ensuring an optimal outcome for both your organization AND the supplier.

ASTRAS helps our customers overcome the daunting Auction challenge by:

  • Automating template import from eRFx results.
  • Supporting all major auction formats (e.g., English, Dutch, Japanese, Vickrey, selling, etc.)
  • Including of bonus/malus considerations.
  • Providing Realtime tracking of target price.
  • Enabling transparency to bidders, so they can bid with confidence.
  • Collecting and consolidating bids, with weighting.
Image of Allocation Astras supply chain software portal
Allocation supply part requisition software

Requisition

Allocation sourcing management software

Source

Allocation supply chain software readiness

Readiness

Allocation parts and material lifecycle supply chain management software system

Benefit From:

  • Lowering process costs by up to 80%
  • More effective sourcing events
  • Shortened cycle time to part qualification
  • Strong compliance
  • Increased supplier collaboration
  • Reduced supplier and part risk
  • Complete visibility, across functions
  • Assurance that your processes and best practices are followed every time
Allocation Clients Include The BMW Group
Allocation Clients Include Siemens
Allocation Clients Include Magna
Allocation Clients Include Schmitz Cargobull