Surprised by price increases? 70% of current contracts have price increase provisions?! We look at raw material market data from multiple sources, visualize & analyze historical pricing scenarios, & simulate planned purchases & what-if scenarios against forward price curves.
At the WMU ISM supply chain management program we teach our students to track commodity forward price curves. Here’s a quick video (see below) of Net Alpha’s cloud based materialx Decision Support service that is being made available to our students in class as they prepare to become future SCM managers.
I have asked a lot of SCM managers how they “prepare” to negotiate price increase requests from their suppliers. In particular, I was curious about how and where they get their data from (i.e., CME, COMEX, etc.). Many said their suppliers provide that information. I am not convinced that using data from your suppliers is a form of “Preparation” for the negotiation process.
What are buyers to do? Procurement organizations need processes and “tools” to mitigate and negotiate on these requests in a strategic, data-driven manner (and we/I need to do a better job of teaching it).
Some of our alumni have experienced this new service and love it. It looks at raw material market data from multiple sources, visualizes & analyzes historical pricing scenarios, & simulates planned purchases & what-if scenarios against forward price curves. Our grads will be ready. I have been collaborating with Net Alpha and they have a cloud platform called materialx that I am bringing into the classroom. It beats updating color coded excel spreadsheets.
Stay tuned for some white papers from the WMU SCM program based on the following price analysis & strategic cost mgmt research…Some of our alumni are already testing and / or implementing this cloud based service called materialx Decision Support from N-Alpha that allows procurement organizations, finance, & all other orgs that are exposed to raw material pricing changes, stay on top of market pricing from multiple sources & proactively assess its impact on future raw material purchases. It is now also serving as the basis for addressing price indexing implementations (formulas, alerts, etc.) by champions in a few larger orgs. This tool is quick & easy to use to prepare for price negotiations with suppliers, & often returns its investment (which is minimal to begin with) rapidly. This service also allows orgs to replace multiple spreadsheets & email threads with one tool that tracks pricing, facilitates collaborative decisions, revisiting past decisions & what led to them, & capturing organizational knowledge.
Supply Chain Management professionals, here’s a one min video showing how easy it is to track changes in forward price curves of commodities and seeing how they may impact your future purchasing decisions. All done automatically and updated daily.
Net Alpha Announces materialx Decision Support – A Cloud-Based Service for Supply Chain Management Organizations that Enables Better Raw Material Purchase Decisions
March 02, 2022 (PRLEAP.COM) Technology NewsBirmingham, MI – Net Alpha Financial Systems, LLC, the technology company developing solutions that are transforming the way manufacturers, producers, distributors, and brokers transact in raw materials, today announced materialx® Decision Support, a new cloud-based subscription service that enables supply chain management organizations to make better raw material purchase decisions.
materialx Decision Support is designed to make pricing data for raw materials more accessible and usable to procurement and other supply chain management professionals. The service combines access to a rich set of market data sources with powerful analytical tools, data visualization, collaboration tools, simulation, and tracking capabilities, enabling more informed and collaborative decision-making than previously possible. With materialx Decision Support, companies can unlock new levels of organizational transparency to the impact of raw material pricing on their purchasing plans, easily involve all stakeholders in purchase decisions, deeply understand the potential economic outcomes of those decisions, and continuously improve decision-making processes by analyzing the impact of past decisions utilizing the data that was available at the time such decisions were made.
“We’ve listened to dozens of procurement teams of various sizes in different industries that time and time again communicated similar challenges, especially following the last two years of the COVID-19 pandemic,” said Eyal Mizrahi, CEO and Co-Founder of Net Alpha Financial Systems. “Procurement teams are often asked when they knew about a substantial price change for a critical raw material, how they reacted to it, and how the change was communicated internally. We built materialx Decision Support to enable answering such questions. Procurement teams that have seen our solution have recognized immediately how it can transform their current processes which usually involve partial data, many spreadsheets, and email threads. The new service can also allow them to capture and harness organizational knowledge in a way that wasn’t previously possible.”
materialx Decision Support includes information feeds from Chicago Board of Trade (CBOT), Chicago Mercantile Exchange (CME), Commodity Exchange (COMEX), London Metals Exchange (LME), and New York Mercantile Exchange (NYMEX), with additional data sources to be offered in the immediate future, all of which can be evaluated, analyzed, modeled, and tracked through a single intuitive interface. Like all materialx platform solutions, it is a cloud-based service, so there is no software for customers to build, deploy, or manage, allowing customers to onboard within minutes. For more information on materialx Decision Support, please visit: https://n-alpha.com/solutions/decision-support
About Net Alpha Financial Systems and materialx
Net Alpha has developed a suite of software tools that help buyers and sellers of raw materials realize digital transformation with minimal investment. The company’s materialx platform provides a suite of cloud-based services that transform how raw materials with variable and negotiated prices are evaluated, transacted, and settled. The services include materialx Decision Support for procurement and supply chain management organizations that wish to maximize the strategic value of raw material pricing data and collaborative decisions, as well as materialx Sales Engine, a transactional platform designed for raw material producers, distributors, and brokers that look to grow revenues by deploying a competitive online presence. The materialx platform-as-a-service is a low cost, rapidly deployable alternative to developing and managing expensive in-house systems. The platform was purpose-built to meet the information and transaction needs of buyers and sellers of raw materials through advanced evaluation and analysis, collaboration, negotiation, execution, and tracking tools. For more information, or to arrange a demonstration of a materialx solution, please visit www.n-alpha.com
___
WSJ: U.S. suppliers’ price increases picked up (11.3%!) in June & remained near historic highs. https://lnkd.in/g_pFJ_QH. Has Strategic Cost Mgmt (i.e., Price Analysis) become a lost art? Will you be ready when your supplier asks for a price increase?
I have asked a lot of SCM managers how they “prepare” to negotiate price increase requests from their suppliers. In particular, I was curious about how and where they get their data from (i.e., CME, COMEX, etc.). Many said their suppliers provide that information. I am not convinced that using data from your suppliers is a form of “Preparation” for the negotiation process.
Time to stay on top of this stuff (both on the way up & down).
Supply chains top CFO business risk concerns: “#1 – raw material costs” https://lnkd.in/gK2nRVUs. Pre-covid: According to a Deloitte 2019 Global Survey of over 1,200 execs directly involved in cost mgmt, cost reduction remained an essential business practice all around the world, with the vast majority of surveyed companies (71%) planning to cut costs over the next 24 months (2020-22). Hmmm, how did that go?
https://lnkd.in/guZexE_s
What are buyers to do? Procurement organizations need processes and “tools” to mitigate and negotiate on these requests in a strategic, data-driven manner (and we/I need to do a better job of teaching it).
In the Fall, we will also be looking at raw material market data from multiple sources, we will visualize & analyze historical pricing scenarios, & do some simulating on planned purchases & what-if scenarios against forward price curves. I have been collaborating with Net Alpha and they have a cloud platform called materialx that I am bringing into the classroom. It beats updating color coded excel spreadsheets. https://lnkd.in/ghjfe3gh
https://lnkd.in/gMuhMNf6
https://lnkd.in/gQZ7HfWb
Great read & spot on – Rising Interest Rates: Maybe It’s Time to Bring Back the Forgotten Art of Price Analysis, May 4, 2022 | Robert Handfield Ph.D. https://lnkd.in/gTjJfyaQ
More material on how to respond to supplier price increases:
https://lnkd.in/g6Uxkuby
https://lnkd.in/ggknMbZM
https://lnkd.in/gTMCPGXv
https://lnkd.in/gC2THQWB
https://lnkd.in/gp5naJxE
https://lnkd.in/gGRaKtVK
https://lnkd.in/gMuhMNf6
https://lnkd.in/gQZ7HfWb
https://lnkd.in/gvCpr6T5
https://lnkd.in/gPVMbWd6
https://lnkd.in/g6qdMvcS
https://lnkd.in/gwFjDfx7
https://lnkd.in/g494sxYr
https://lnkd.in/g6Uxkuby
Price analysis is a subject that is often overlooked in supply chain education.
Reads…
How should companies use competitive bidding?
https://lnkd.in/gS9vCRQ6
Assume a supplier estimates the following costs on an RFQ
https://lnkd.in/gxFBz3_U
ROI and Your Core Competency (i.e., SCM?)
https://lnkd.in/euh2rFdU
To stay competitive, companies are forced to outsource commodities and focus on their core competency
https://lnkd.in/g-DHtt8X
The primary elements for sourcing a supply partner
https://lnkd.in/ga2xtDsi
What does it mean to be hollow? Sourcing Strategy matters!
https://lnkd.in/gHB-nzeJ
The most reprinted article in the Harvard Business Review: The “Core Competence” Article
https://lnkd.in/gDsHme-r
You have every legal right to say you want a “cost breakdown”
https://lnkd.in/gygd5bzs
Procurement 101: Explanation on Commodities
https://lnkd.in/g_nEgvhJ
How do companies outsource strategically?
https://lnkd.in/gevbRKEq
POs & Advanced Contract Mgmt: https://lnkd.in/gcpHEEvw
How SCM managers “prepare” to negotiate price increases. https://lnkd.in/gVrdpuer
What is SCM?…