The procurement process can be complicated for consumer products, food and beverage, and industrial manufacturing companies. It involves sourcing hundreds, or even thousands, of commodities and raw materials from many different suppliers worldwide. Often there are several systems in place to manage this process – including ERP, MRP, broker statement and siloed spreadsheets – making it challenging to track coverage, hedge performance, and spending.
The challenge
Even though commodity hedging was ranked as one of the highest financial issue for CFOs, and the cost of raw materials accounts for 40 – 60% of manufacturing costs, commodity hedging is still managed on spreadsheets.
A recent survey of over 100 mid-sized to large manufacturers revealed some startling numbers:
- 95% of companies do not have access to consolidated exposure and coverage report spend at least two days, and up to weeks, creating one. Many depend on their suppliers for this information.
Without a current, accurate picture of exposure, buying decisions are delayed, impacting budgets.
- 92% of companies use complex pricing structures and 100% of them manage this fully or partially in spreadsheets.
Spreadsheets make analyzing pricing difficult and make negotiating a good deal harder.
- 98% of companies need more than two weeks to create month end reconciliation reports – some require a full month.
Spending two weeks creating reports leaves less time for more valuable strategic analyses.
- 88% of companies said that the frequency of updates to raw material forecasts was not sufficient and mostly was a quarterly refresh.
Delayed responses to demand changes impact over- and under-coverage and Inventory, increasing costs.
The solution
Invest in an automated solution that can aggregate data from disparate systems and create an accurate, current view of truth in minutes. Eka’s procurement solutions help you track forecasted spend, coverage, and variance in real time. Buyers, risk managers, and executives can confidently make decisions knowing that everyone on the team has the same, most current information. Companies can standardize cost models, analyze how individual components have performed relative to the market, and evaluate global market buying and hedging signals.
Eka’s procurement solutions deliver the instant insight you need to cut costs and improve margins and hedge effectiveness. With Eka, you can simulate situations before taking action, and track exposure to your suppliers and markets so you can make better, data-driven decisions.
