Flow chart for the optimal utilization of market intelligence to address sourcing challenges is divided into two parts, strategy (it includes scoping, internal analysis, external analysis and strategy development) and Process (it includes the sourcing execution and its implementation)
Scope of a project is starts from planning the project which determines and document the complete list of project goals ,project features, project functions, project deliverable, project task and project completion with ultimately cost. optimal utilization of market intelligence
A multinational food and beverage company located in Australia wants to renew its contract for the supply of natural gas which is the primary source of energy for multinational food and beverage company to heat their ovens (Multinational F&B Company Saves Millions in Energy Sourcing through GEP’s Market Intelligence) .
For this purpose multinational food and beverage firm needs to define their project function like scope, time, cost and quality. Project scope will limit the outcome results and provides boundaries for the contractor company. The time will establish a time frame for a project to be done within a specific period. It also includes the deadlines, benchmark and milestones. Cost will define the budget of MFB to complete the project within the time frame. In last a project will have to focus on the quality of outcome which is the ability to process to satisfy both stated and implied requirements defined by the stakeholder. optimal utilization of market intelligence
A team charter is that document which is formed in a group to give a dedicated direction and limits he boundaries in a team. It contains the team purpose (value of gathering people together to find out acceptable solution) duration and commitment (Amount a and time required for a group to accomplish a task), scope (Natural gas supply in a cost effective way), desired end results (client’s company want to find out a suitable supplier in terms of cost and contract duration) along with the desired deliverable. optimal utilization of market intelligence
Analyzing the business requirements of the MFB internally is called internal analysis. In this case company required a suitable supplier with deliverable, like supply of natural gas at suitable price for suitable time duration to form a contract (Multinational F&B Company Saves Millions in Energy Sourcing through GEP’s Market Intelligence).
For this purpose they have not much data available in terms of natural gas price because in past it was not stable due to the frequently change in local body rules and regulation. Due to this situation MFB faces difficulty to find out a suitable supplier (Multinational F&B Company Saves Millions in Energy Sourcing through GEP’s Market Intelligence).
An incumbent company offers them to provide the services to provide a supplier in desired budget and will also suggest a suitable time frame of the contract. For this purpose the incumbent company GEP did lot of research on analytics of natural gas prices and also make contact with regulating bodies about the change in regulation (Multinational F&B Company Saves Millions in Energy Sourcing through GEP’s Market Intelligence).
In general supply and demand are the key factors which drive the commodity prices throughout the world. Apart from these factors there are too many other factors which have huge impact on its price. In the case of the MFB, client’s company did have the complete in sight of the natural gas supplier market and it was unable to done a research itself due to the instability of the market due to changes in the regulatory bodies and not enough data available about suppliers. To find out a supplier of natural gas they decides to take consultancy from GEP consultant firm which have the expertise in identifying the international market trends and impact of regulatory changes on the price of natural gas. For this purpose they done a lot of research and suggest a supplier for MFB (Multinational F&B Company Saves Millions in Energy Sourcing through GEP’s Market Intelligence).
For this purpose GEP’s Expertise make in depth and targeted research on natural gas market. This research was based on the discussion with the local regulatory bodies to gather intelligence on supply markets and the factors on which they can make negotiations. Supplier market intelligence provides a transparent trend of natural gas pricing in the Australian market along with the factors which impact on price forecasting due to the local and global developments.
On the other hand, negotiation points help them to minimize the impact of uncertainty on natural gas pricing. Additionally GEP also reviewed the pipeline tariff along with the three contractor’s status with the Australian natural gas producers. This research provides guidance to understand the impact of source and transmission pipeline on the pricing strategy along with too many other factors which can influence the natural gas price. There are different factors which influence on sourcing like pricing pressure or competitive pricing, supplier identification or validation, dual sourcing, risk management and low cost regions. The GEP’s team also identifies that increase in use of shale gas and the increase in LNG export has significant impact on the natural gas prices in Australia (Multinational F&B Company Saves Millions in Energy Sourcing through GEP’s Market Intelligence).
Sourcing execution and Implementation:
To find out the best supplier it’s necessary to have knowledge about all suppliers along with quotes. The supplier companies are, AGL, Dodo power and gas, Energy Australia, Lumo energy, Origin energy, Red energy, simply energy, momentum energy, click energy, Alinta energy. On the bases of market intelligence and in depth insights from category experts GEP’s not only identify the best NG supplier for the client but also give him consultancy to enter into a contract along with the idea contract time period based on the current market situations. Based on the downward price pressure the client was recommended to enter into short term contract, due to which client signed a year-long contract along with 10 % saving in Price (Multinational F&B Company Saves Millions in Energy Sourcing through GEP’s Market Intelligence).