Sourcing Optimization

Issues and Challenges

One of the most strategic things a company can do in the area of global trade is to optimize its sourcing decisions. What are the lowest cost sources of supply for the products procured internationally? While most companies have already rationalized their sourcing decisions, a common pitfall is the omission of details that can greatly affect cost. Beyond the purchase price of the goods, transportation costs, lead times, service levels, etc. - which most companies already factor into sourcing decisions - what about the detailed duties, taxes and fees?

Many global companies use disparate processes and systems, as well as outdated information, resulting in lower margins and higher costs. By adopting control and management systems to accurately calculate total landed costs and analyze all costs to fulfill customer orders, companies can better manage and understand the impact of sourcing decisions across the design-to-deliver process.

How Amber Road Can Help

Amber Road’s Sourcing Optimization solution provides a comprehensive view into extended design-to-deliver costs. The solution allows for comparisons of various sourcing scenarios and actual landed costs to improve purchasing decisions. By providing specific inputs, such as product classification, source and destination countries, INCOTERMS, etc., organizations can better understand the effect on total landed costs when variables are changed. Modifying and reviewing all scenarios allows procurement professionals to gain a more complete picture of estimated and actual costs, time to delivery, route, and compliance implications associated with each sourcing decision.