At its core, procurement in logistics refers to the sourcing of materials that a company needs to manufacture its products. Namely the process within the supply chain focusing on purchasing raw materials, replacement parts, operating supplies, and other necessary items for the manufacturing process to work.
But, the activities for procurement in logistics does not end with the purchasing of materials and items. It also concerns the storing, organizing, and shipping of these materials to and from the warehouse. As such, a procurement logistics team is also responsible for product sourcing, selection policies, terms and conditions, communication and purchasing strategies to assure the cost is kept as fair and as low as possible.
So, how can we at Prognos help you optimize your purchasing and logistics activities?
The importance of performing a logistics cost analysis
Cost is an important aspect to consider not only in logistics but in all business decision making within an organization. A company usually has hundreds, maybe thousands of different costs associated with their activities. Where do you even begin?
In the end, not all of the costs are worth spending time on. They might be too small to matter in the bigger picture, or they are simply as optimized as they can be. For this reason alone, a company needs to perform a regular logistics cost analysis of its logistics activities. The purpose of a logistics cost analysis is to identify savings opportunities and gather the necessary information to make informed and better spending decisions, increase efficiency, and gain leverage in negotiations.
We want to be clear that Prognos platforms are NOT logistics cost analysis tools capable of automating the process of creating a cost analysis. We can however be an important part of your cost analysis activities where we’re able to support you in the following ways:
- Consultancy services: We offer end-to-end spend/cost analysis consulting services where we help you create a logistics cost analysis manually from scratch.
- Should-cost trackers: After you’ve performed a logistics cost analysis and found out what areas need and can be improved, you can leverage our different tools to negotiate within those areas. The should-cost trackers allow you to track market price development and use the data to ensure the vendor price is fair over time within areas exposed to competition.
Just remember that the should-cost price is only a benchmark. By utilizing competitors to the specific carrier you can push it even lower, where Prognos should-cost trackers help you ensure the right price over time, thus allowing for longer collaborations with vendors.
Access vital data to get the most out of your suppliers with Prognos
Knowledge is power, and data is knowledge.
Which is essentially what we supply our clients with. We give you access to all the necessary cost data tailored according to your needs and situation to bring your purchasing and logistics activities to the next level, enabling you to act upon identified cost-saving opportunities and giving the upper hand in your vendor negotiations.
Our platforms gather data from multiple sources all over the world to give you up-to-date data in one place where you can access indices for raw materials, manufacturing costs, taxes & transportation costs, labour costs, and currencies:
- From our platform, Prognos Tailored, you can access interactive, continuously updated, reports where you can drill down in your materials, compare the prices to your cost development, export the graphs, or export the underlying data for further analysis. The reports are customized for you by Prognos, leaving you to focus on the negotiation strategy and not digging for the data. You also get access to several different features including should-cost trackers, selected indices, and country focus.
- With Prognos Online you get access to over 8 000 indices on raw materials, components, wages, and currencies in an interactive online tool capable of transforming the data to fit your needs for your procurement in logistics.
Get in touch with us today and learn more about what benefits our platforms provide in terms of procurement in logistics.
Frequently Asked Questions
Benefits of Prognos procurement tool for the logistics industry
- Logistics cost analysis
- Should cost trackers
- Access to updated market data
Common problems in logistics procurement
- Risk management
- Spend inefficiency
- Lack of cost management
- Data inaccuracy
- No transparency
Adopting logistics procurement software can help tackle common problems faced in procurement in the logistics industry and align your procurement strategy in the right direction.
What is procurement management?
Conducting a logistics cost analysis helps you select the most cost-efficient choices that optimizes your purchasing and logistics activities