Supply chain management has seen a strain since the covid-19 pandemic. Despite uncertainties, it forced companies to recognize and make new routes, form new collaborations to ensure a reliable flow of services and products.
Supplier market assessment and analysis is an essential strategic business requirement. Factors like greater social and political instability, constant fluctuation in market conditions, and movement of the labor market increased the need for businesses to implement better procurement solutions.
A supply market analysis report shows the overall market changes, pricing information, significant suppliers and their capacities, and cost-cutting opportunities.
It thus equips businesses with robust and insightful supply market assessment. Using the following steps, you can create a supply chain market analysis to get the needed intelligence importance for your business growth.
1.Define Your Aim, Extent, and Commodity Profile
The main goal of executing market analysis can differ. However, a shared goal is to build critical insights to fuel insightful decisions and enhance your competitive position. Every organization is distinct.
So, you must see that your organization is fully aligned with its stakeholders before performing the analysis. It is also imperative to know the extent of your project. Understand the depth and breadth of your endeavors and develop a precise understanding of the commodity profile that you will investigate.
2.Investigate the Market and Cost Structure for Your Commodity
It is essential to know the way pricing functions for the different services and goods you are interested in. Various factors can affect the ultimate price you pay. They include the cost of the materials, labor cost, and cost of transportation.
Apart from that, energy and utility requirements and overhead costs can also influence the end price. It can also happen that the availability of a commodity is affected by a specific time of the year or geopolitical events.
The commodity’s availability is also subject to new laws that come into effect. The second step is finding out about all these things.
3.Execute a Thorough Supplier Analysis
It’s essential to recognize the significant players in your specific market. After you identify them, research them thoroughly. You need to comprehend the context in which they are functioning.
So, research every aspect, from their geographic locations to their target audience base. You should also explore their competitive advantage. Moreover, you can also research any risky situations or lawsuits they held against them in the past.
Studying about their financial backgrounds is also not a bad idea. A SWOT (Strengths Weaknesses, Opportunities, and Threats) can help carry out such research.
4.Recognize Key Market Indicators
Identifying the right indicators for your product can be challenging. However, it indeed plays a significant role in research, conclusion, and your business strategy.
The appropriate indicators can enable you to comprehend the present state of the market. When you monitor them over time, these indicators become predictors of what’s next to come in your market. Four critical categories of indicators you can measure include the following.
- Economic indicators – They include inflation and production rate, and pricing trends.
- Pricing and dices – They include Producers Pricing Index (PPI), Consumer Pricing Index (CPI), or Import/Export Price Indexes.
- Employment indicators include the percentage of the fully employed workforce and unemployment claims.
- Production measurements include industrial production rates, gross domestic product, and capacity utilization rates.
A professional supply market analysis report aims to help businesses with strategic direction and process enhancements for negotiation management, contract sign-off, and sourcing decisions.
5.Gather Your Findings and Present Final Recommendations
You must develop and implement your findings adequately for your organization. Only then will they boost your competitive advantage and minimize risks in your supply chain. This step requires you to be mindful of the context and culture of your company.
Carrying out your market analysis can be difficult. But with careful planning and deep research, the result can be very effective.
You can also consider professional supply market intelligence that is a result of investigation through primary sources like industry experts and researchers. Thus they assure that you can position yourself rightly and make cost-effective supply chain decisions.
The post 5 Steps to a Supply Chain Market Analysis first appeared on Technology Magazine.