for Supplier Assessment
PRICE® Cost Analytics (PCA) for Supplier Assessment is a quantitative methodology used to evaluate potential suppliers of both developmental and commercial off-the-shelf end items. The result of Supplier Assessment is establishing a portfolio of preferred suppliers for use during the proposal process and post-award.
Validating Quotations from Suppliers
A main issue in proposal analysis is the comparison of inconsistent data. The solution is normalization, which means the extraction of what comprises the differences. PRICE Cost Analytics intelligently produces normalized cost density or Manufacturing Complexity data to broaden the number of projects/products that can be used for comparison.
PRICE’s unique methodology assesses submissions for suppliers to rapidly determine if they are reasonable and provide the best value for the cost. PCA offers great benefits in the procurement of equipment—both subcontracted and off-the-shelf items including:
- The establishment of internal cost targets for RFPs
- The evaluation of bids compared to the cost targets
- The selection of the most appropriate suppliers
Many PCA users have had significant estimation and cost savings in their procurement activity using this method to their advantage. The qualitative benefits of the process include:
- Quick return on investment
- Different negotiation material based on technology cost drivers
- Larger data samples across the industry through normalization
- Proposal validation in minutes and detailed evaluation as necessary
- Better estimating accuracy for purchased items at the concept phase
- Understanding among suppliers that you can control them and that they will need more control themselves
The application of cost analytics in the supplier assessment process will help select the preferred supplier on a rational basis.
- Evaluate bids quickly
- Specify realistic and achievable cost targets
- Compare bids on a consistent basis
- Evaluate productivity between suppliers with the same technology
- Provide a common language between organizations and countries
- Improve accuracy of future bids for procurement or purchasing
Interested in a Capability Brief or Proof-of-Value for the PredictivePower for Supplier Assessment?