Achieving the Lowest Supply Chain Costs through Decision Guidance Systems (Adobe Acrobat)

Decision Guidance Systems provide supply managers with a powerful tool to handle complex sourcing issues. Supply organizations have several hundreds of items on one complex bid. Satisfying both user and multiple business unit objectives requires software that allows the sourcing team to rapidly analyze an unlimited number of alternatives. Doing so enables the firm to realize a higher percentage of implementable savings over traditional sourcing evaluation tools. Decision Guidance Systems There has been a great deal of interest about using e-tools to improve the strategic sourcing process. These e-tools include eRFIs, eRFQs, and reverse auctions. While these solutions have provided significant returns they are often limited in their ability to handle complex sourcing issues. Decision Guidance software overcomes these limitations by its ability to quickly analyze any number of different scenarios quickly. The sourcing team can then present various scenarios to users, business units and management with the resulting savings. Decision Guidance systems are based on a set of high end algorithms which allow the supply manager to quickly solve complex buying scenarios. Some of the benefits from this software are its ability to: 1) collate critical decision making information; 2) cross reference these decision criteria against the buyer’s constraints; 3) provide decision alternatives and what if analysis quickly; 4) revise and run new scenarios instantly; 5) guarantee an implementable solution. Analyzing Complex Solutions Why would a supply manager need such powerful software solutions? It is not atypical for an organization to have several hundreds of items that are sent out on one complex bid. Given the physical number of items and complexity of involving several business units there are thousands of different scenarios that could be plausible sourcing outcomes. “As an analogy to the buyer’s problem when evaluating all the potential outcomes from suppliers bids consider the potential outcomes from a fi ve card poker hand. If you include the order in which the cards are drawn the number of potential outcomes is 2,598,690. How many potential outcomes could you have with 20 locations 15,000 SKUs and hundreds of potential