Procurement has always been a bottom-line motivated function, yet the tools to do proper cost evaluation and optimization are often lacking. Efforts to apply activity-based costing proved to be too time consuming, so averages and standards remain. This means that individual decisions may not be ideal; or specific selections optimize a part of the product cost at the expense of the whole.
Goals and Objectives
Automated product cost optimization provides procurement with the objective, timely and relevant tools they need to make informed and ‘total system’ product cost (direct procurement) decisions.
Enterprise Hardware, Personal devices, Cloud, Big data/analytics, Mobile, Applications, Connectivity Services, Cognitive, Blockchain
Use Case Summary
Automated product cost optimization is an automated tool that monitors cost reductions of ECNs, innovation tradeoffs (Make vs. Buy) as well as all costs that make up COGS – materials, logistics, carrying, and fulfillment. It also addresses network/regional differences while also enabling true optimization on all inputs and offering a forecast of future spending.