Innovative data-driven supplier selection process

Innovative data-driven supplier selection process

Prior Situation / Scenario:

  • Selection process for spare parts suppliers has rules, but lack adherence
  • Subjective inspector’s judgment influenced final decision with no control which suppliers were chosen
  • Bids granted to expensive providers

Client Challenges:

  • Identify badly awarded bids
  • Quantify how much the process would improve if clearer rules are applied
  • Evaluate suppliers on past performance in order to decide new contracts

Strata Solution/ Key Enablers:

  • EDA (Exploratory Data Analysis) explore the behavior of inspectors and providers, with comparison of awarded and non-awarded providers for each claim, considering relevant objectives including cost, quality and delivery of spare parts

Outcome:

  • We develop a tool that allows to select the best supplier based on data and analytics.
  • 4% saving achieved on cost of suppliers
  • Provider quality indicator was created based on their past performances to track performance.

Results:

Identified almost 30% of inspectors chose a more expensive provider. Proposed a series of rules based on data that, if applied, would reduce this margin of error. If would translate into significant savings for the entire company.