Why do we bother to collect market intelligence on the strategic commodities we are sourcing? The solution is that if we do not we might be subjected to unnecessary supplier risk and any competitive advantage we thought we’d may be lost. Supplier risk can be present anywhere, anytime and with any provider. Supply market intelligence is a present buzz-phrase currently gaining rapid vulnerability. It is basically an update of distribution market analysis and could be described as the process of collecting, filtering, distilling and presenting information related to a provider’s supply markets. A properly implemented and educational supply market study requires that considerable and disparate quantities of study materials be collected through secondary and primary research. Traditionally, supply market evaluation has included creating a commodity profile, analyzing cost structures, researching providers, and identifying key market indexes. Having the ability to able to build a supply market analysis for a given product is a skill that is essential for each supply chain professional to master
Primary research is information gathered through interactions with different individuals typically through meetings, one-on-one structured interviews, focus groups, and polls. Main research with current and potential sellers is often more valuable and enlightening than secondary research. The deluge of information available on the world wide web, can be accessed equally by countless users. Primary research is a vital element towards developing a competitive advantage. This is the fun bit. Secondary research is data gathered from existing literature, books, broadcast media, and other anti inflammatory sources. This is normally easier to collect than main and is often valuable in connection with the effort expended. Intelligent measures to take towards really knowing your product
- Create the commodity profile
Find out the international product classifications and record the commodity definition. Consult widely and get a thorough comprehension of the important technical and quality problems.
- Determine the price structure.
Over and above the usual adding up of raw material costs, labor, transportation, energy, overheads etc, you can be more innovative. Listed companies are required to publish financial statements and do presentations on their business outcomes. Scour this advice for clues to their price profiles.
- Research all providers
This requires effort and focus and is an on-going procedure. Establish if the global market is fragmented or merged, where the low-cost providers are, new distribution channels and any pending mergers or buy-outs. This is a place is where you will require support from the specialist organizations offering procurement market intelligence services, particularly where they aim unlisted companies. Customized dashboards are available which are designed especially to monitor activity in your commodity.
- Identify key market indicators.
The good news is that most regional and global market indicators are regular, reliable and free. Economic and indexes monitor high level commodity prices, production prices, GDP and employment figures. You can also set up alerts so that you do not miss any vital events or developments.
