Opportunity Type: Multi Source Follow

Multi Source Savings Opportunities are the difference in CPN price vs. the lowest of two-or-more prices paid for substitute MPNs within the same manufacturing site (CM/ODMs)

Global Commodity Managers (GCMs) can save on price by diversifying share to other low-price suppliers. Organizations want to optimize price across their entire supplier network and be confident that they have competitive sourcing and backup options within their supply chain. Discovering multi source opportunities helps with all of this. Additionally, this is one of the most confident negotiation benchmarks if GCM chooses not to alter share award.

We do not recommend going all-in to 100% distribution share in any potential multi source situation. Balancing the share and awarding more share to lower cost by demonstrably reliable suppliers is natural supply chain optimization.

Review Multi Source Opportunities

Filter to Only Multi Source Opportunities

When in the Review Opportunities module, (1) open the controls and (2) pick the Multi Source Opportunities Type, then (3) Apply.

Examine the Opportunities Table

The Opportunities table will by default be sorted by Opportunity ($) amount in descending order; however, you may also want to sort by Opportunity %.

Clicking into an individual opportunity of this type, the savings percentage is predicated on the difference in CPN price versus the lowest of two-or-more prices paid for substitute MPNs within the same CM/ODM.

Reviewing the Details of a Multi Source Opportunity

Looking at the example below, we can (1) see a 50/50 split in part spend for the same customer part number across the same CM/ODM.  The customer part number (CPN) is the same, yet (2) the substitute MPNs are different and the recommended MPN is 15% cheaper than the other current MPN.

Identifying this information, and depending on many variables in your sourcing strategy, it may be advisable to shift some additional split to the recommend MPN and away from the current MPN.

Conclusion

You should now be comfortable reviewing Multi Source opportunities to identify substitute MPN savings between your existing CM/ODMs. These opportunities will continue to arise whenever your organization loads new part/pricing data into the LevaData Platform, and you should be inclined to review them at least as often as that occurs.