Free Essay

Spend Analysis

In: Business and Management

Submitted By birenpatel24
Words 260
Pages 2
Spend analysis is performed in an organization to manage the spend tactically and strategically. The main objective of performing spend analysis in Rexel Canada is to achieve cost savings and to determine with which vendors it will be beneficial to maintain long term relationship in order to get better pricing and to get maximum service. Rexel Canada is an electrical components distribution company dealing with around 3500-4000 vendors. Thus it becomes very necessary to do good spend analysis to monitor organization spending. Spend Analysis is also important for various business strategies such as budgeting, inventory management and spending patterns.
Steps used to conduct Goods Spend Analysis
• Procurement department coordinate closely with accounts payable department to collect the data on annual spend for products and services at divisional level and matches with our ERP.
• Gathered data is divided into Direct Spend and Indirect Spend
Direct Spend includes organizational spending on goods and services related to business.
Indirect spend includes spending on operational expenses such as stationeries, overhead expenditure etc.

• Data collected is cleansed to rectify the error of duplication such as supplier's names spelled differently and treated as different suppliers.
• Making sure the companies listed in our ERP recently merged with other listed vendor is not considered as separate vendor and thus considered as one vendor.
• Converting the amount spend into one common currency i.e. CAD. (Rexel Canada purchases its products from US vendor in US Dollars)
• Vendors are further divided into different category of product as Rexel stocks and sell one type of product from different vendors.…...

Similar Documents

Premium Essay

Should Americans Spend or Save

...Should Americans Spend or Save? Money is the monitory exchange in transactions. How Americans spend and save is determined by our limited choices of resources. Consumers make rational and irrational choices. Our decisions are directed by our social, emotional, psychological factors and level of income also affects our decisions. The market gives us choices by the production of goods and services they produce. To produce the consumable goods businesses have to sell and buy raw materials, labor, plant & equipment. The market and government a force behind what is presented for consumption. The government is a direct force of these goods and services. Government tries to create a balance of economic determinates by imposing taxes to raise revenues and establishing rates at which the private sector can borrow money to consume. Government tries to create a stable economy where the amount produced equals the amount consumed. There are many parts of our economy and each plays an important role in economic efficiency. Consumer spending accounts for the biggest portion of our nations GDP at 70%. Businesses are 17% of GDP they are important because they create the jobs, good and services for the consumer. Governments roll in overall GDP is 19%. Net exports and imports create the remainder of our GDP. The GDP is the ratio by which we measure the total spending, total costs of goods sold that equals our total income. Spending is increased when the level of......

Words: 934 - Pages: 4

Premium Essay

Leave to Spend More Time with Family

...for the departure must be stated. Human Resources cannot delve further into the reasoning even if it seems much too vague or ambiguous. Unfortunately, if an executive or high-ranking employee terminates his or her position with an organization by stating he or she intends to spend more time with family, but, in reality, is either seeking other employment opportunities or, perhaps, has knowledge that the company he or she is working for is failing financially, than he or she has committed an ethical breach. The individuals discussed in this case study are placed in a legal technicality category of an ethical breach. (Jennings, 2012). As stated in this case, although the employees divulged his or her intent to leave to spend more time with family, this could technically be correct because once the employee is no longer employed, he or she may have more time to spend with family. Therefore, it must be determined that the proclamation made to Human Resources at the time of departure cannot be misconstrued as a falsehood. Consequently, if the employee knew his or her intentions were to accept another position or was planning to seek other opportunities, stating his or her intent to leave to spend more time with family gives a false impression and provides misleading information. A company’s executive branch has a reputation to uphold. The better a businessperson’s reputation for integrity, honest and decency, the better chances of victory in the business world. By......

Words: 879 - Pages: 4

Free Essay

Goods Spend Analysis

...MODULE 2 SESSION 1 STUDENT ID # 2001691 GOODS SPEND ANALYSIS ASSIGNMENT Goods spend Analysis is the process of organizing a company’s spend, leveraging spend data for the purpose of gaining visibility into cost reduction, performance improvement and uncovering hidden savings opportunities. Spend Analysis consist of three different components which are; Suppliers, Customers and Commodities and Services. Each component should be measured in dollars and number of transactions which should be a potential source of improvement and cost saving. I believe spend Analysis serves three internal user groups in a company which comprises of: ❖ Leadership of the organization usually the chief executive officer and chief Operating officer who needs up-to- date reports to drive strategic direction. ❖ Managers, Accountants or Chief Financial officer who need to drill down into a spend data set to explore specific areas of interest or track down payment specifics. ❖ Sourcing power users who need to locate, drive, and monitor the next set of savings initiatives. Goods spend Analysis consists of both direct and indirect spend and my organization deals with both. I will be discussing the various steps I will use in conducting goods spend analysis in my organization. The first step is to identify the system containing spend data in my organization; there are many......

Words: 993 - Pages: 4

Premium Essay

Why Are Data Analysis Skills and Thinking so Important to Spend Analysis? Can’t Software Applications Be Used to Generate the Information Needed Automatically?

...Why are data analysis skills and thinking so important to spend analysis? Can’t software applications be used to generate the information needed automatically? Not all data presented to you may be important to make strategic decisions. One can make sense out of a large data when data analysis skills and thinking are employed. These skills help one identify the more meaningful information and understand patterns, consistencies or irregularities, to make sound decisions. Flanagan of Pepco Holdings, in the article provided, shared that one will be better able to assist internal clients in planning spend strategies and also better understand supplier’s cost proposals. Analysis is important because most automatically generated results do not provide the information needed. It is important to know what data is meaningful and understand what the output of the data means and how to employ it in a real world application How might structured process such as Six Sigma methodology be useful here? Data analysis is important for a company’s continuous improvement efforts. Six Sigma is a business process improvement tool to significantly minimize mistakes at a stringently high level. The methodology of Six Sigma itself, when followed correctly (i.e. DMAIC), will allow a person to identify process inefficiencies and address them to generate cost savings, deliver quality of service and achieve more consistent good results. Why is it important to get other functional areas,...

Words: 464 - Pages: 2

Free Essay

The Abcs of Spend Analysis

...1. Why are data analysis skills and thinking so important to spend analysis? Can’t software applications be used to generate the information needed automatically? In today’s world, advanced technology has provided us with a lot of tools to help sift through and process huge amount of data. However, in spite of all this, the fact remains that data is useless without the skills to analyze it. Critical thinking is still a skill inherent only to humans. Software applications are much capable of generating data automatically, however, only one equipped with data analysis skills can translate that data into information that can support corporate decision-making. Equipped with the right data analysis skills, one would be able to select the significant data from the wide array available and turn it into actionable information. These skills are important in spend analysis as the most critical stage is making sense of the output and deriving strategic solutions based on the information available. The employment of data analysis skills and critical thinking in spend analysis is necessary to reach the goal of enjoying the benefits of spend data management which include reduced material and services costs, better supplier and product management, and lower inventory costs. 2. How might a structured process such as Six Sigma methodology be useful here? The Six Sigma Improvement Model known as DMAIC can be used in implementing spend management in the enterprise with the aim of......

Words: 892 - Pages: 4

Premium Essay

Goods Spend Analysis in Your Organization

...Individual Exercise Goods Spend Analysis in Your Organization Describe components of a goods spend analysis for your organization. Please feel free to bring any relevant information about your organization to class. There are three components to the exercise that must be handed in: 1. Show the steps you would use to conduct goods spend analysis for your organization. PO Mgmt Dept Fulfillment Buyer Accounting Payable Procurement Manager Procurement Category Buyer CFO Provide Primary spend data Accountably sign Spend analysis Approve Spend Analysis Draft Spend Analysis Verify Primary data Steps to conduct goods spend analysis Internal Goods Users 2. Describe specific key triggers and why you chose them. In general, we conduct goods spend analysis based on company management, procurement management and some other special reasons. Company management purposes: * Cost analysis * Budget, Forecasting and Planning Procurement management purposes: * Periodical summary, e.g. quarterly, monthly, semi-annual, annual * Top suppliers cognation for long-term relationship development * Quarterly major suppliers review of purchasing volume, capability and performance PO amounts and price review under Master agreement or stage prices * Negotiation/bidding preparation, e.g., category volume, suppliers’ history PO amounts, delivery, etc * KPIs as cost saving, purchasing amounts, workloads, etc. Special...

Words: 428 - Pages: 2

Premium Essay

Service Spend Analysis

...Subject: Services Spend Analysis 1. XXXX is an engineering and research company. Accordingly, there are many procured services that support daily operations. The following exercises will discuss procurement in services and Human Resources. XXXX’s HR service provider provides employee recruiting, distribution of employee benefits and employee contractors. The business process outsourcing of Human Resource Management is a critical operation that warrants examination. The HR Service Provider manages contract employees for XXXX. Professional contractors who work at XXXX consume significant spend activity. The contractor may serve in a variety of specialized occupations and non-technical positions. Depending on the job, the hiring of a contractor may be considered both direct and indirect spend for the services rendered: engineering, quality, information technology, supply chain, human resources and others. Professional occupations working directly with production materials will proportionately have a higher weight as a direct spend activity; while employees in Finance that provide support services are indirect spend activities. As such, the HR service provider is an important vendor that is able to source technical staff for XXXX that the local market may not provide. 2. This section will discuss the steps to conduct a spend analysis for HR Services. The ERP can be used to export Purchase Order data that can be used to generate metrics, charts and useful......

Words: 704 - Pages: 3

Premium Essay

Spend Analysis

...Spend Analysis Lisa Fitzsimons BUS 307 Instructor Peter Thuleen 02/23/2015 Spend analysis is a process that an organization can perform that will allow them to identify wasteful spending and increase company profits. A spend analysis will also show spending patterns and bottlenecks that occur, which will increase company long-term savings (Sharfaei, 2013). This process may be difficult and time consuming, however, with cooperation with each department and proper data analysis and presentation, a spend analysis will be extremely beneficial in the long run. The following information describes what a spend analysis is, skills and tools needed for the data analysis, how a Six Sigma methodology will help with a spend analysis, and what makes up the analysis team who will work to create the spend analysis. What is a Spend Analysis Spend analysis is the application of quantitative techniques to purchasing data in an effort to better understand spending patterns and identify opportunities for improvement. This process involve collecting, cleansing, classifying, and analyzing the expenditures within an organization with the purpose of reducing procurement costs, improving organizational efficiency, and monitoring organizational compliance (Bozarth & Handfield, 2012). A spend analysis can be used to identify a number of different questions regarding where is the bulk of company spending, how much is the organization spending with their suppliers, and does the......

Words: 1298 - Pages: 6

Free Essay

Spend Analysis

...SCOPE OF WORK The work performed by the contractor shall include, but not be limited to, all labor, tools and material to prepare surfaces and apply paint as described below: General 1. Prior to starting work, the contractor shall check color and product to assure conformity to specified color and finish as described on the builder's decorator information sheet. 2. Materials shall be applied without runs, sags or cracking. 3. The contractor is responsible for material damaged by paint and should cover material such as brick, concrete, roofing, cabinets and floors to avoid any potential damage. 4. The painter is to leave in the home a minimum of one quart of each color and/or stain for touch up. Each can is to be clearly marked. Builder will supply the cans. Interior 1. Any excessive drywall damages or missing rim is to be brought to the attention of the field manager prior to priming the house. 2. All dust must be wiped off walls and molding prior to applying all coats of paint. Floors must be swept prior to starting work. 3. Drywall is to be primed at 4 mils wet film thickness. Drywall can be sprayed, but it must be back rolled. 4. Sanding is required on all trim and drywall after the prime coat. Sandpaper grit #100 or finer should be used. Damage resulting from over sanding drywall will be the painter's responsibility to repair. 5. All point ups are to be sanded by painting contractor. 6. All rough trim is to be filled and sanded......

Words: 877 - Pages: 4

Free Essay

How to Spend Money Wisely

...How to spend money wisely Have you ever been emptied your pocket? I would feel it so uncomfortable when I need to purchase for the necessary things. Hence, spending money wisely is always a good idea, no matter how much we have. The next question is how I could save our money smartly. It might be easy to read or hear from others, but it’s really hard to follow up. Personally, overspending my purchases on anything that unnecessary stuffs was my weakness. However, experiencing to plan it as steps to follow; such as, questioning on any purchases, intelligently managing my money, and wisely purchasing helped me to save up to thirty percent of my every single paycheck. Moreover, bringing myself a financial plan. Normally, financial experts suggest us to chase after our financial plan to know where exactly our money is going. It sounds complex a bit, but I believe it helps us much. I am bad with keeping my receipts for any cash spending, so I got suggested to remember note them out in my notebook or the note on my phone for how much cash that I already purchased for the day. It helps me a lot to create my monthly expenses, the information that I harvest, so I could decrease my expenses and I would know exactly how much I could save. Then, avoiding to be impulse purchasing. First of all, with respects for any pennies I made by hours, to give honest answers for whatever questions that I have to wonder myself before purchasing stuffs. My trick is at least go preparing five......

Words: 1327 - Pages: 6

Premium Essay

How Do You Spend?

...RP #9 November 24th, 2015 How Do You Spend? I’ve noticed that over the years, I don’t like parting with my money. When I’m out shopping, I look for the best possible price in a product. Once I find it, I still consider deeply if I really need the product or not. If it’s something I don’t think I’ll need, I’ll wait til the next day to see if it would have been an impulsive buy or something that can be of value to me. If it is something I buy right away, it would be that the deal is too great to pass up or it’s something I need without question. Even then, when I check out, I hate to see my money leave my account. It feels as if I stress a little about every transaction. Spending my money builds an emotional pain of deciding if what I bought would benefit me or not, but the only way to find that out is to buy the product and use it. My girlfriend on the other hand is the exact opposite. Almost anything she see’s that is of interest of her, she’ll buy it. She doesn’t buy everything she wants, but she’ll be more than likely to buy it right now then wait like me. When she see’s the deals, my guess is that she thinks she’s saving money on that product rather than buying it full price or there won’t be another deal like it. If it’s Black Friday, I would understand more but because she might not be thinking through if she really needs the product or not, she only sees the great deals/savings. Even if there’s no discount on the product, if she likes it she’ll buy...

Words: 408 - Pages: 2

Premium Essay

School and the Time You Spend in It

...The time you spend in school. Instead of having kids sitting in school for hours and hours a day I believe that short sweet and simple school days should take over. There is generally a lot of wasted time during the school day and everyone could receive benefits for shorter days. The teachers would have a lot more time on their hands to grade papers. With all their extra time they can devote more time to their students and any help they may require. The kids would benefit because no one wants to be in school hours on end. Kids would have more free time in their day. They would not need to stress over getting homework done on top of playing sports or any extracurricular activities that promote kids being healthy. They would also benefit because if they start to fall behind in school they can easily stay after class and get the help they need while not worrying about a ride home or missing the bus. Both teachers and kids alike would benefit from the sleep they receive from, not staying up all night trying to get homework done. The overall stress of going to school and having a thousand things running through your head would be eliminated. They both spend more time with family and friends. They have all this free time to get school work done could improve on people being social and stepping away from their cell phones for a change. Today’s school system only focuses on tests to grade how well kids are doing. You see one side of the story with tests. The schools should follow...

Words: 861 - Pages: 4

Premium Essay

Goods Spend Analysis

...Individual Assignment Goods Spend Analysis Prepared by: Date: January 13, 2012 TABLE OF CONTENTS 1. Introduction 3 2. Goods Spend Analysis: How is it conducted? 4 3. Key Triggers 5 4. How spend analysis fits the procurement strategy 6 1. Introduction Spend analysis is the process of collecting, cleansing, classifying and analyzing expenditure data with the purpose of reducing procurement costs, improving efficiency and monitoring compliance. It can also be leveraged in other areas of business such as inventory management, budgeting and planning, and product development. There are three core areas of spend analysis - visibility, analysis and process. By leveraging all three, companies can generate answers to the crucial questions affecting their spending, including: ▪ What am I really spending? ▪ With whom am I spending it? ▪ Am I getting what’s been promised for that spend? Spend analysis is often viewed as part of a larger domain known as spend management which incorporates spend analysis, commodity management and strategic sourcing. Companies perform spend analysis for several reasons. The core business driver for most organizations is profitability. In addition to improving compliance and reducing cycle times, performing detailed spend analysis helps companies find new areas of savings that previously went untapped, and hold onto past areas of savings that they have already negotiated. Benefits of Spend Data......

Words: 865 - Pages: 4

Free Essay

Spend Analysis

...Spend Analysis & Data Analysis Robert Knieriem BUS 307 Professor Ray May 21, 2012 In today’s fast paced, technology heavy corporate world, data that pertains to any and every business aspect, regardless of size has become ever more important in daily operations and decision making. The data that results from these operations and decisions and its collection, analysis and concluding into upcoming decisions will have a deciding factor in how well or how poorly the company operates in the future. This data is made on its own, but putting it together and making sense of it all remains the challenge today’s companies have and continue to deal with. Data analysis and critical thinking skills are important to spend analysis because this information put out requires a human element to understand what is really being put out. As mentioned by Purchasing, data is only data until it’s analyzed and acted on, and only then does it become valuable information to the company. Further, today’s companies who actively collect data are finding themselves looking for those with the knowledge and skill to analyze this data and allow the company to act upon it (Bozarth & Handfield, 2008). Even with today’s most powerful software which simplifies the task of collecting and maintaining this data, the process of analyzing and understanding of this data requires the human touch and only someone with this background and knowledge can put the data into easy to read, easy to understand...

Words: 1022 - Pages: 5

Premium Essay

Bus 307 Week 3: Spend Analysis

...2012 Spend Analysis I. Introduction The current condition of the economy in the United States (US) and increased economic pressures has reinvigorated many companies to rethink their purchasing practices. One of the best ways for a company to evaluate its spending patterns is through a spend analysis. “A spend analysis is the process of determining what is being spent, with whom and for what” (Hingorani, 2010, p. 58). In order to accomplish this task companies must use software programs to import and aggregate data from multiple systems. This paper will explore several components of the spend analysis process including the risk of using software programs alone to analyze spending patterns; how Lean Six Sigma processes might be useful when developing a spend analysis process, and why it is important to involve multiple functional areas, most notably finance. II. Relying on Software Alone While software programs offer a great platform for organizing data they do not provide a method of cleansing data. What I mean is, spend data can be housed in many different databases, and trying to consolidate the data correctly can prove to be very difficult. Ever heard of the saying “garbage in, garbage out”? That is exactly what you might get relying solely on software programs to complete your spend analysis. This is where analytical skills and critical thinking become very important when setting up a spend analysis process. First, you must......

Words: 1043 - Pages: 5