Most companies today still search for parts one by one and don’t have a solution to help automate the process. However, there is a much better approach that companies can take to resolve part shortages. While it’s often challenging to get a comprehensive, holistic view of part locations and mitigate risk, innovative sourcing software can simplify the process in a number of ways.
Here we’ll go over the benefits of integrating strategic sourcing software into your company’s procurement & sourcing operations.
How Does Direct Materials Sourcing Software Resolve Part Shortages?
A tool like the one offered by Part Analytics is a cloud-based Software-as-a-Service (SaaS) platform that assists contract manufacturers, EMS companies, and OEMs with acquiring pricing information from all distributors. In addition, the platform provides information around supply chain risk within a few minutes based on parts’ end of life or obsolescence.
Using Part Analytics, customers can easily upload bills of materials (BOMs) to obtain all necessary information. The platform then reviews the bill of materials to calculate its risk. To make sure data is consistently up to date, the Part Analytics platform also refreshes data daily or weekly. This provides customers with the latest industry and market intelligence data.
Traditionally, organizations often rely on multiple spreadsheets and systems that can become difficult to manage. This is especially the case when an organization must manage tens of thousands of parts. With so many items to look for, it can be challenging to prioritize them. Using Part Analytics’ BOM IQ module, purchasing departments and procurement leaders can quickly identify high-risk BOMs according to lead time, part lifecycle, and availability.
In addition, Part Analytics gauges compliance risk and sourcing risk, based on whether the part is single- or multi-source. This enables organizations to focus primarily on low-risk BOMs and gain more time to source the parts required for high-risk BOMs.
Ultimately, Part Analytics gives you the chance to save more time, energy, and headache on sourcing parts and mitigating risk. You can automatically search for all necessary parts, along with alternative options on part lists and BOMs. You’ll also be able to spot potential disruptions in product design early on before they have the chance to become more serious problems.
Uncover Additional Savings Opportunities
Another key feature of Part Analytics is its ability to show pricing information, which can help organizations save in a few ways. The platform pulls pricing data from all distributors to identify the lowest price on the market for parts.
The platform also displays benchmarking and networking pricing, in which case OEMs or contact manufacturers purchasing parts can compare this pricing to the average price that others have paid for the same or similar parts. In turn, our customers can look for certain opportunities to negotiate with suppliers for the best possible price point.
With the help of this pricing feature, Part Analytics has contributed to significant cost savings for customers, with an average savings of 15%. Some customers have saved as much as 30%, with the added benefit of proactive mitigation of supply chain risk.
When tracking pricing, you’ll have the ability to view data from all major manufacturers. Within this expansive network, Part Analytics has access to over 500 million parts on the back end, with daily or weekly pricing updates that keep all data consistently relevant and accurate. This is just one more tool in the complete toolbox to help manufacturers not only resolve part shortages quickly, but also to mitigate the risk of additional shortages and make more informed sourcing and procurement decisions.
Subscription-Based Tools Offer More Agility & Flexibility to Users
Part Analytics operates through an annual subscription. For contract manufacturers, we’ll calculate pricing based on the number of BOMs our customers upload to the platform. Meanwhile, for OEMs, we price our subscription based on the number of BOMs along with total spend on the platform.
To avoid democratizing data, there is no limit to the number of users who can access the platform. This means that companies can give permission to anyone within their organization to access all data. As a result, Part Analytics can serve as the single point of truth for the entire organization and each team.
With consistent unfettered access to system data, all employees can stay on the same page with up-to-date information and insight into company activities. Employees will also be able to identify market trends and access in-depth market intelligence.
Preparing for Component/Part Obsolescence & Lifecycle Changes
Eventually, parts will become obsolete or reach the end-of-life phase. To give our customers enough time to react before parts reach these stages, Part Analytics offers insights on parts’ predictive information.
Oftentimes, OEMs don’t receive notification of obsolescence until the part has become obsolete. In these cases, organizations only have the option of spending as much as millions of dollars on purchasing 10 to 20 years’ worth of inventory. Conversely, if our customers receive notice within two years of parts reaching obsolescence, they can take the necessary steps to redesign the product and sufficiently prepare.
Another factor to consider is lead time, which has become a critical element to consider in recent years. Lead time is a particularly important consideration for passive parts, such as multilayer ceramic capacitors (MLCCs). This is due to the industry’s increased experience with certain issues regarding allocation and availability, in which case part manufacturers allocate inventory to OEMs. To help plan for lead times, Part Analytics provides users with available productive insight.
To further prepare your organization ahead of obsolescence, you can use Part Analytics to set up email alerts to notify teams as soon as items on shortage lists become available.
Additional Tools for Strategic Sourcing
BOM IQ
This module helps assess and mitigate risk, glean insights into BOM cost, and find savings opportunities. By implementing the other modules available through Part Analytics combined with BOM IQ, you can supercharge your supply chain.
Depending on your company’s needs, we offer other modules in our comprehensive solution, including:
Part IQ
The Part IQ module consists of an enterprise parts catalog that shows information about part usage, along with technical and commercial information.
Category IQ
Companies can assess supply risk and improve negotiations through the benchmarking of supplier performance at every commodity level.
RFQ IQ
Part Analytics makes it easy to convert insights into action through automated sourcing. Companies also save time on sourcing event preparation.
Executive IQ
Access a dashboard with a centralized view of savings opportunities, BOMs, and risk throughout your organization.
All of these modules work together to help give you complete control over your supply chain. Regardless of the challenges you face within your organization, Part Analytics will help overcome them to maintain operational efficiency.
Getting Started with Part Analytics
If you would like to experience the benefits of integrating Part Analytics to help resolve part shortages, we make it easy to incorporate the right solution.
When getting started, we can provide you with a demo of our platform. Following this demo, we conduct a proof of concept, which involves running your BOMs on the platform and revealing the results. In the process, our system can identify savings and risk mitigation opportunities. Once you have a good idea of the kind of ROI you can see with Part Analytics, we can begin negotiating an annual contract with you.
Our customers experience many benefits when they turn to Part Analytics for supply management. Using this innovative platform, you’ll be able to successfully avoid issues around part shortages and other potential challenges across your entire supply chain.
If you would like to find out more about what Part Analytics can do for you, reach out to us or request a demo today.
