I am surprised by the number of supply chain and purchasing professionals that use the terms Total Cost of Ownership (TCO) and Strategic Sourcing as excuse for inaction. Don’t misunderstand me. I believe in total cost and in business strategy. Most supply chain consulting and university programs have these concepts imbedded in them as they […]
Purchasing: The Status Quo Will Cost You Read More »
Over the 4 years since our firm launched our electronic component benchmarking tool set, we’ve concluded there are only 4 reasons that companies don’t benchmark their electronic component spend for competitiveness. Okay, there might only be two reasons? In their 15th release of Management Tools and Trends – 2015, Bain and Company tabulated opinions of
Benchmarking – Tried & True. What about your component spend? Read More »
When we assess a new client’s spending against market pricing, we usually see a distribution of prices made up of overlapping distributions. The profile suggests three distributions. The first is a fairly tight distribution of good pricing positioned where half of the distribution is seen to the right of the mode value (peak with small
Market Price Normalization Improves Competitiveness Read More »
To companies focused on operational excellence, Lean Principles and the discipline of Benchmarking are considered two complimentary and indispensable tools toward achieving world class performance. Getting Lean is all about identifying and getting rid of waste, where waste is defined as any non- value adding step that customers are unwilling to pay for. Benchmarking is
Wanted: Lean and Benchmarking ‘Sensei’ Read More »
Since my company, Lytica Inc., introduced analytics based price prediction for electronic components, many major EMS and OEM companies have saved millions of dollars by applying this technology to their materials spending. As with the disruptive technologies described by Clayton Christensen in The Innovator’s Dilemma, those stuck like deer in the headlights clinging to a
Purchasing: Do You Really Understand Pricing? Read More »
I have been absent from the blog scene for the past few months because I have been working in China with an LED light bulb manufacturer. This is an exciting, fast-paced, high growth industry under intense pressure for cost improvement and product innovation. While working with this company, I am getting a refresher on Chinese
Take the Embedded Inefficiencies Test Read More »
I was speaking with my Purchasing Manager last week; Patrick is a very capable and effective purchasing professional who has become addicted to Lytica’s fast track cost reduction methods. We discussed surprising things that we have seen in procurement which we label as crimes because they rob shareholders of value. In no particular order, I’d like
Top 7 ‘Crimes’ Often Committed by Purchasing Read More »
Lytica Inc. tracks current prices paid – not distributor website prices – on about one million electronic components and uses this information to assess our clients’ spending competitiveness and estimate appropriate pricing for their worst price components. In many cases, we assist customers in implementing better pricing in their supply chain. From this vantage point
6 Obstacles to Achieving Cost-Reduction Goals Read More »
As we approach the holiday season, I am writing my final blog of 2013 about humanity; that is humankind rather than kindness, compassion or charity. Humans make mistakes; on average, about 2% of the time. Fortunately, we have found ways to catch these mistakes so that their impact does not make it through to affect
Treat yourself to lower costs for the holidays Read More »
If the supply chain psychiatrist were to run a word association test, the expected answer to associate with the word registered would be screwed! While this may sound harsh, many OEMs are unknowingly caught in a registration system that has long-term consequences for materials cost. Registration is a process, used by manufacturers, which rewards a
Registered & Screwed Read More »
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