Manufacturing companies such as consumer products (CP), food and beverage, and industrial that use commodities and non-commodities in the production of finished goods are challenged to view budgeted spending, actual spending, projected spending, and coverage across the organization. These companies typically store information in multiple systems and buyers at these companies track spending in individual spreadsheets. As described in "The Need for Commodity Analytics in Commodity Management Software," the exploding quantity of data available today drives complexity in decision making. Those companies who are best equipped to leverage the data available to them to make the best decisions will gain a competitive advantage. What manufacturing companies need is a single, integrated solution that tracks and analyzes both commodities and non-commodities with real-time data.
Issues with ERP
To track and analyze budgeted spending, actual spending, projected spending, and coverage, procurement groups nearly always use an ERP or other in house system in combination with spreadsheets which hinders visibility. It is impossible to get a timely, complete view of risk when multiple systems are used to track physical commodities and financial derivatives. An organization that uses spreadsheets to track exposures cannot know the impact when market prices change.
Multiple Systems
Further compounding the problem is that departments within an organization such as procurement, treasury, and finance are using different systems which makes consolidation challenging. To foster executive decision making, information from multiple departments must be gathered to generate analyses – a time consuming and labor intensive process typically only performed monthly or quarterly.
A Better Way
With Eka’s Procurement Analysis app, manufacturing companies can monitor, analyze, and manage the enterprise-wide budgeted spending, actual spending, projected spending, and coverage. They can simulate projected spending and perform detailed spend attribution analysis.
Manufacturing companies can view coverage and price risk and perform market simulations to see the resulting impact on coverage. Alerts notify users when coverage has breached corporate governance policies.
Benefits of Eka's Procurement App
- Enable executive decision making that leverages predictive analytics for optimal conclusions.
- Make the most profitable decisions by performing analysis on budgeted spending, actual spending, and projected spending.
- Predict the impact to coverage with market simulations before taking action.
- Make course corrections by pinpointing contributing factors with attribution analysis.
- Maintain coverage within corporate governance policies.
- Focus on business strategy instead of operational tasks such as collecting data and preparing reports.
Eka’s Commodity Analytics Cloud is powered by its Intelligence Engine.
The engine performs high speed calculations in an in-memory data grid to deliver predictive and prescriptive analytics. The models analyze the vast collection of internal and external data as well as structured and unstructured data. The Intelligence Engine is not bound by volume or memory constraints and utilizes state-of-the-art pattern recognition and learning algorithms to optimize decision making. Eka’s team of data scientists are continually updating the algorithms based on real-world results to ensure perpetual forecasting improvement.
Features of Eka's Procurement App
Manage commodities and non-commodities – Meet the needs for procurement across the entire organization including both commodities and non-commodities.
Integrate data easily from multiple systems – Bring together large volumes of disparate information from systems such as ERP and spreadsheets to run analyses and gain answers immediately, instead of waiting a week or longer.
Simulate market changes, coverage, spend, and variance – Run complex forecasting models and scenarios, ask “what if” questions to determine expected results. Evaluate how projected changes in market prices, supplier costs, and demand can affect the bottom line.
Include gains and losses of hedge programs in spend analysis – Include the impact of hedges in spend and coverage for accurate reporting. Record hedges for all types of trades including forwards, futures, calendar spread, product spread, exchange, over-the-counter (OTC), swaps, and average trades.
Use cost models to set budgets – View forward looking coverage by cost component and against changing market prices. Learn individual cost contributors. Enable automatic corrections of coverage.
View historical spend – Understand supplier behavior and pricing trends. Gain improved analysis of spend behavior.
Gain advanced risk management – Run multiple models based on business and portfolio.
Leverage visualization and data warehouse tools such as QlikView and Tableau or Eka’s commodity intelligence cubes – Perform ad hoc analysis by creating customized reports needed for the business. Feed the analytics data into a data warehouse or visualization tool.
Use data from external systems via commodity intelligence cubes – Leverage commodity intelligence cubes to gain an integrated data ecosystem that pulls in data from internal and external systems such as Bloomberg and GlobalView. Slice and dice data to perform previously impossible multi-dimensional analysis.
Set up monitors – Get alerts when certain spend and coverage thresholds are reached. Track key performance indicators. Determine which components are most likely to exceed budget.
Run analysis – Enable business users to answer questions directly without delay instead of relying on outside departments to run analyses. Find and share answers instantly, even when requirements change.
Customize – Create additional insights without the help of IT that address specific questions.
Eka's Solution for Procurement
Eka's is the only commodity planning and procurement solution to integrate advanced analytics to better manage budgets, demand forecasts, spend, coverage, and hedges. Part of Eka's Commodity Analytics Cloud platform, the Procurement Analysis app enables manufacturers to leverage analytics to more effectively manage both physical commodities and non-commodities, as well as financial derivatives, and view budgeted spending, actual spending, projected spending, and coverage across the organization.