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14 October 2013 | Will Green
Technology offers buyers the ability to predict future demand and get the best price at the right time, the CIPS Annual Conference was told.
Sajid Ghani, managing director at PGRX Business Analytics, told buyers at the event that “big data” and analytical software had the potential for forecasting commodity prices, logistics and the demand landscape.
“There is huge opportunity if we can forecast what it might mean for the supply chain: What is the very best thing that can happen and how do I optimise my business around that?” he said.
“What will I be buying? How much will I need? Where should it be delivered? Why should I buy it? How much should it cost?
“When you’ve got seriously big decisions to make that are going to have some significant bottom-line impact, procurement has an opportunity to show a whole range of value.”
Ghani said research showed best-in-class users of analytics, where 69 per cent of employees had access to some form of the technology, had seen their operating profit grow by 30 per cent in the past 12 months, compared with an industry average of 7 per cent, where 40 per cent of workers used analytics. “Laggards”, where 18 per cent of employees had access to analytics, saw profits drop by 8 per cent.
He said data around key drivers and trends were “the lifeblood of what we do”.
“What is the strategy for data in your company and how are you going to govern it?” he said. “Make sure you have a good understanding of your data.”
Ghani’s comments were echoed in a separate session at the conference by Justin Sadler-Smith, Northern Europe leader at IBM Procurement Solutions. “The issue people have got in procurement is getting the right amount of data together to be able to go and predict, that’s the utopia,” he said. “Try and predict trends based on data, try to mitigate things before they happen. If you have that data you are able to present to an executive board, all of a sudden you’ve got influence.”