The Lowest CM/ODM Saving Opportunity allows users to see the CPN price vs. the lowest of two-or-more prices paid for substitute MPNs regardless of the CM/ODM manufacturing site.
Users will be able to demonstrate a direct lower price to their contract manufacturers for identical parts. It also promotes accountability to unified pricing with limited variance across partner networks.
Note: This opportunity should be examined after every data load and during quarterly business reviews.
Review CM/ODM Lowest Cost Opportunities
Filter to Only CM/ODM Lowest Cost Opportunities
When in the Review Opportunities module, (1) open the controls and (2) pick the CM/ODM Lowest Cost 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 opportunity of this type will present the user with the lowest of multiple corroborated costs for substitute MPNs and recommended the CM/ODM who can deliver that lowest cost with the percentage of cost savings that is attainable.
Reviewing the Details of a CM/ODM Lowest Cost Opportunity
In the top level of the opportunity details page, you can (1) see the amount of the opportunity in a comparative chart, and (2) select and action the opportunity.
In the table for the CM/ODM Lowest Cost Opportunity Details there are two key areas to review.
- Since this is a CM/ODM Lowest Cost Opportunity, you should review the CM/ODM and the Cost. In this example, the LevaData Platform is suggesting a switch from the current CM/ODM on the left to a new recommended CM/ODM on the right, and that this cost savings would be achieved in unit cost reduction from $6.144 to $5.373086.
- Alternatively, negotiating with the current CM/ODM to deliver the equivalent recommend price can achieve this cost savings.
- The total opportunity amount is calculated by multiplying the cost savings for this opportunity by the current demand for the quarter in question.
- In this case the cost savings would be $0.77 ($6.144 minus $5.373086)
- That cost savings would be multiplied by the current demand ($0.77 * 221800) to get an opportunity amount of $170,988.
If you want to quickly surface the unique elements of this opportunity, you can (1) select Show only changed values, then (2) the table will be filtered to only display the unique differences between the current and recommended part. For this example, we would be able to more quickly compare the CM/ODMs and their relative costs head-to-head without the other similar data present.
You should now be comfortable reviewing CM/ODM Lowest Cost opportunities to identify cost savings among your sourced contract manufacturers. As noted above, these opportunities will continue to arise whenever your organization loads new data into the LevaData Platform, and you should be inclined to review them at least as often as that occurs.