2014 User Group Meeting - Maumee Bay Lodge and Convention Center

Purchase Profitability Analysis

Presented by:Jerry Martz

What Drives Your Buyers/Traders?

This guy has serious motivational alignment issues…

How do you measure Buyer/Trader Performance today?

Volumes by: SupplierLocationTraderGradeTime frame

Adequacy of Supplier “coverage” & relationship mgmt.Other…

THE CHALLENGE:How to measure contribution to

profitability that would be realistic, accurate, reasonably managed

and consistent across all Buyers/Traders…

Purchase Profitability AnalysisTotal Volumes/$$ By Branch Location

Purchase Profitability AnalysisTotal By Trader By Supplier

Purchase Profitability AnalysisTransactions Detail

Purchase Profitability AnalysisVolumes and $$ Per U/M By Trader

Purchase Profitability AnalysisVolumes and $$ Per U/M By Supplier

Steps to Measuring Essential Supplier Profitability Data

1. Map raw materials purchased to finished grades sold.

2. Build cost structures by location & commodity.3. Establish estimated market pricing for finished

grades with recognized pricing authority.4. Selectively deploy and start monitoring PPA. Edit

data as needed.5. Fully deploy with brief overview - users browse &

analyze their way to success.

Purchase Profitability AnalysisPricing Spreadsheet Examples

In short…

“There’s no ‘i’ in T-E-A-M”But there is one in P-R-O-F-I-T

Purchase Profitability Analysis

delivers measurable resultsto gauge Supplier, Branch &

Buyer/Trader Profits