Spend Intelligence: Spend Awareness Follow

Our users have large amounts of spend data and need to know how their total spend breaks down into different perspectives. To that end, Spend Awareness is the default page of Spend Intelligence.

Filtering the Data Presentation by Time Period

The first thing a Spend Awareness user will want to do is set the time period in order to have a target comparison (e.g. year-to-year or quarter-to-quarter) that they want to cross-examine the spend. Spend Awareness is meant to compare two time periods.

1. The Scope Filter that is standard across the top of the LevaData Platform interface applies across the Spend Awareness page and more clearly indicates calendar/fiscal quarters if your organization uses fiscal offsets. In addition, all presentation metrics reflect the chosen scope.
2. The default My Overview presentation displays Commodities spend for the chosen time period; however, other options are available from the dropdown.
3. The default third panel shows a Timeline Segmentation of Contract Manufacturers; however, there are numerous other options available from both dropdowns.

Timeline Selection Business Rules for Spend Awareness

When selecting time periods in the scope filter, the following rules apply and are dynamically updated in the Spend Awareness interface as soon as the selection is completed:

1. If the User selects two or more time periods, then the oldest time period will be considered as the reference time period and the newest time period will be the current time period.
2. If the user selects only one time period, then the system will consider it as the current time period and relative previous time period will be considered the reference period.
3. The Current and Reference time period will always be in the same unit of time, i.e comparison will be between Year-over-Year (YoY) or Quarter-over-Quarter (QoQ).
4. If the user selects multiple units of time, then quarter will take precedence over year.

In the example above, the user has selected Q3 2023, Q4 2023, and Q1 2024.

• Following rule 1 above, the oldest time period (Q3 2023) is the reference time period and the newest time period (Q1 2024) is the current time period.
• Following rule 4 above, since the user has selected both years and quarters, quarters take precedence and are used for the comparison. This is indicated in Step 1 on the interface where it indicates "Latest Fiscal Quarter" is the period being referenced.

If the user had only selected 2024 and 2023, then Year 2024 would be the current time period and Year 2023 would be the reference time period.

Awareness of Core Metrics

In the first panel at the top left are the Core Metrics of Spend Awareness that define supply chain complexity including

1. % Spend Change is the percentage comparison in spend amount between the two time periods selected with that amount being the major metric in focus and the reference period and amount being the minor metric on each side.
2. % Demand Change is the percentage comparison in demand amount between the two time periods selected with that amount being the major metric in focus and the reference period and amount being the minor metric on each side.
3. The counts are listed for CM/ODMs, Global Commodity Managers (GCMs), and Manufacturers, and they are grouped together.
   • Manufacturers has a Normalized count adjacent to it to inform you of how many Manufacturers you have loaded into our platform versus how many we have in our normalized manufacturer naming conventions where LevaData aggregates common naming conventions for the same manufacturer.
4. MPN to CPN Ratio has unique MPN and CPN counts. This helps to mirror topline values from your own internal spend systems while breaking them down by key values to present awareness you would not otherwise have.
   • MPN to CPN Ratio is the featured middle metric under the sub-heading Part Resilience.

As mentioned in the time period selection section, comparisons displayed are always between a current period and a reference period and those two periods are either a set of years or quarters depending on what you selected in the scope filter.

If you click any other element of the Spend Awareness interface, the other metrics will update to reflect that filtering:

For example, selecting just the $181.153 million in spend on Passives in Commodity Overview will update the core metrics to reflect only that specific Passives spend. As you navigate through the Spend Awareness interface, keep an eye on the impact to your core metrics.

Contextual Perspective

The second and third panels are the Contextual Perspective of key metrics with change amounts for specific time periods, allowing the user to view network flow by a variety of dropdown values. Using this tool provides insight into spend changes to uncover any insights which may need attention.

Toggling views of spend and segmentation (via the view by dropdown) enables cross-analysis of sourcing areas which need attention. Tracking the flow of spend across each step-by-step selection in the dropdown interface permits deeper context of where spend is directed and what liabilities may exist.

The center value of the My Overview section and the total value of the third chart panel will both reflect the total spend from the date range selected by the user.

Examine a Contract Manufacturer

For example, to look at the spend for one of our top contract manufacturers we can set My Overview dropdown to Contract Manufacturer and click one of them (Jabil for example), and then set the third Panel to Commodity View and Top Spend Change Chart to view spend by commodity at that CM in the current time period (2024) and previous time period (2023).

By changing the chart type to Supply Chain flow and retaining Commodity view we can see the distribution of commodity spending for this CM. Supply Chain Flow amounts reflect the total sum of all values displayed for the time period selected.

Clicking an item in supply chain flow is going to filter the lower view detail table.

Examine Global Commodity Manager Performance

Users may want to examine spend across commodities and commodity managers to determine if there are positive or negative developments in their relative performance and what the underlying data indicates.

By (1) selecting Commodity in My Overview and (2) picking an individual commodity (e.g. Plastics), then (3) selecting Commodity Manager and Top Spend Change in the third panel, we get a breakdown of the commodity manager spend managed within that Plastics commodity.

Now we can compare how the example GCMs who manage Plastics purchases have seen spend and demand changes year-over-year.

In this example above we can see that Jess manages the most spend, and all of the GCMs have seen roughly the same demand increase year-over-year (~6-7%), but Kelly has seen a disproportionate increase in Spend (4x over the other two GCMs). Why might that be?

By (1) selecting only Kelly in the Top Spend Change View by Commodity Manager, then reviewing the Detail table below we can see that (in this simple example) Kelly manages (2) one plastic part which has increased in cost from $2.25 (2023) to $2.52 (2024)

For comparison, we can (1) select Jess and review the three MPNs that Jess' manages. In the (2) detail table below we can see the 3 MPNs, one with flat cost, one with a 10% cost increase, and one with a 15% cost decrease.

In this case, Jess has offset the cost increase on one plastic frame with a cost decrease in another plastic frame. The overall spend under management has seen lower composite increase when compared to the previous commodity manager.

View Grouping, Segmentation and Perspective Detail Table

At the bottom of the Spend Awareness interface is a Detail Table which allows you to see the most impactful changes identified for confirmation or mitigation. The interface requires minimal clicks and configuration to direct to your ideal perspective for contextual insights and underlying filtered details are always available at any point.

Review Plastics Example in Detail

Returning to our preceding example, let's review the Detail Table for Plastics parts comparing 2024 to 2023. The prioritized detail table has (1) sliding filters on spend, spend % change, % change in MPN Cost, and demand % change. The largest amounts of Spend in the detailed time period will be highlighted with blue backgrounds to draw your attention to them. The objective of looking at spend detail at this level should be to try and find unexpected (2) spend and demand changes between the (3) two examined time periods.

Detail Table Calculations Defined

• Spend % Change = how much part spend has increased (positive %) or decreased (negative %).
• MPN Cost % Change = unit cost percent changes for a given part - increase (red/orange) or decrease (green/blue).
  • When looking at comparative years, the MPN Cost % Change will be calculated by the following Formula: percentDifference(median({MPN Cost}),[{fiscal_date} ASC],-1,[MPN,{CPN Description},{CM/ODM},Manufacturer,Supplier,uom])
  • In this formula, the median of the MPN Cost within the year is compared with the most recent fiscal year before that. The data is then grouped by MPN, CPN Description, CM/ODM, Manufacturer, Supplier, and Unit of Measure.
• Demand % Change = how much demand has changed - increase (positive / blue) or decrease (negative / orange).

Tips for Reviewing the Detail Table

• If unit cost (MPN Cost % Change) hasn't changed (i.e. equal to 0%), then demand and spend have changed in equal measure.
• If demand has increased, you will want to see MPN Cost % Change decreasing as you are likely buying at greater bulk and should be seeing price discounts from vendors.
• Quarters take precedence over years, so if you have selected one or two quarters but then also selected another year, the table will display all of those values by quarter.
  • For example, if you time filtered to “2023, 2024[Q1,Q2]” then the detail table will display Q2 2024 to Q1 2023 from left-to-right / newest-to-oldest.

Resetting Spend Awareness

Users can refresh their browser to reset the screen to baseline values and remove all existing report filters.