Routinely harassing part suppliers with demands for across-the-board price cuts? is a common practice, but this changed at Peoria, Ill.-based Caterpillar Inc, when, two Caterpillar managers, Nelson Jones and Syamala Srinivasan, pioneered an alternative, a unique part analysis software tool that quickly and easily recognizes cost-reduction opportunities in a design configuration. The goal, as they saw it, was to automate the identification of logical opportunities for cost-reduction collaboration.The technology was spun off in 2003 and is now commercially available from Peoria, Ill.-based startup Akoya Inc.

Sandor's Michigan State University professor of supply-chain management comments: "The world was waiting for the Akoya solution, a software capability that routinely allows buyers to look at large and complicated bills of material and make sense of the parts' cost relationships to one another. It's one of the most compelling needs of the procurement and supply chain world," says Sandor.

Akoya's software is able to take input from the company's existing files and, through regression analysis, identify pricing and cost trends as they relate to part configurations. Simply put, Akoya's solution can quickly compare the characteristics of thousands of parts with the assumption that similar characteristics should have similar costs. At that scale manual methods might take years. "If OEM's adopting the software continue to browbeat their suppliers, at least they will browbeat with some specifics that they can both agree on and are actionable," jests Sandor.Consider feature-based cost analytics a tool for both purchasing and engineering, adds Sandor. "Engineers need to know the cost implications of their design decisions."

Another company in the similar space highlighted by "SpendMatters" is Apriori.

Source: 1, Via Spend Matters

Prashanth Rai