“Yes – I hear what you say – but how can I prove your product will give me as good a return on investment as you say?” A good question!
I had shown one of our existing customers, who we had worked with for a number of years our Cost Management software and as most people who had seen it, they were interested. He was not known for pulling punches though.
“Well…” I replied. “One way is for us to perform what we call a ‘Spend Analytics.’”
A sceptical eyebrow was raised. I carried on.
“Basically a Spend Analytics allows us to take a reasonable number of your components – somewhere between 100 and 300 or so parts. You provide the 3D models, and if these don’t include the material, and various finishing processes such as painting, the 2D Drawings, as well as the number of parts you want to produced, over what period of time, and if possible in what batch sizes. Also – importantly, you provide us with the price you have paid – or expect to pay – for these components.”
The eyebrow had lowered a little.
“We then run the Solid Models through our Technology, providing the material, finishing and any other relevant information provided and then aPriori will provide a “should cost” price for each of these parts.”
“We then produce a number of graphs – identifying the parts that have the largest discrepancy between the aPriori “Should Cost”, and the cost you are paying. The graph may look something like this … once it’s been sorted – aPriori provides a number of ways of allowing this to be done, to identify the outliers – to not only see which components are more expensive, but perhaps which suppliers have the biggest gap between the should cost and the cost you are paying.”
“After this we identify the biggest miscreants – the biggest outliers – giving you the starting point to enable you to re-negotiate the price of those components.”
The owner of the skeptical eyebrow frowned.
“Well, that’s surely something I could get my people to do manually, without your software!” he replied.
My turn for the raised eyebrow!
“Yes of course, but how long would it take to do 300 parts manually, and where would you start? Perhaps you could do 10 or so a day? aPriori will do 300 parts or so in a few hours, adding on time for setting up and interpretation, you’d see which were your 20 costliest outliers in a few days, and you could be spending your time on re-negotiation!”
He was beginning to look more enthusiastic.
“We performed one of these spend analytics on a company in the US – we identified around 20 outliers, and of these the company received re-quotations from their suppliers for 13 parts, and with the volumes they were buying they showed a saving of over $600,000. Not bad for a couple of weeks work!”
“Of course, after you’ve saved money on your first 300 – you can start on your next 300 straight away!!”