Negotiation Strategy: Industry/Region Max
The video explains the "Industry/Region Standard" strategy in the ADA Platform, detailing how it calculates the average contractual payment terms for suppliers within the same industry or region as the selected supplier, providing a breakdown of standards, suggesting potential increases, and highlighting the identified suppliers and their associated opportunities.
Introduction to Industry/Region Standard Strategy
- The video discusses the "Industry/Region Standard" strategy, which focuses on the average contractual payment terms of suppliers within the selected spend file sharing the same industry and/or the same region.
Platform Functionality
- The ADA Platform scans the entire spend file for matched suppliers and identifies others in the same NAICS industry or geographic region as the targeted supplier, calculating the average payment terms.
Example Scenario
- The supplier in focus is currently paid in zero days, and the platform identifies a supplier, either in the same industry or region, within the spend file, with an average payment term of 37 days.Breakdown of
Strategy
- Clicking on the strategy reveals a breakdown, indicating that the industry region standard found 121 spend lines with a minimum of 10, a maximum of 90, and an average of 37 days.
Variations in Standards
- The breakdown further distinguishes between standards considering only industry or region, with different numbers of spend lines, minimums, maximums, and averages.
Suggested Increase and Potential Benefit
- The ADA Platform suggests increasing the payment terms by 37 days, potentially unlocking $57.8 thousand U.S. Dollars, with the reminder that the currency reflects the user's selection at the top row.
Supplier Details
- Information about the supplier's location in the Northern American region and its NAICS industry (electric lighting equipment manufacturing) is provided.
Detailed Opportunity Description
- Scrolling down, the video indicates that the ADA Platform did not identify any combination opportunities for both industry and region standards but found them separately, presenting detailed information on identified suppliers and their average payment terms.
Application of Strategy
- The video emphasizes how the platform applies the industry region standard strategy, showcasing its functionality in analyzing payment terms based on industry and region criteria within the ADA Platform.
0:00 - In this video, we will cover the strategy of industry region standard. The industry region standard is the average contractual payment terms of the suppliers within the selected spend file, sharing the same industry, and or the same region.
0:16 - So in other words, the ADA Platform looks across the entire spend file for the matched suppliers and looks for other suppliers that fall into the same NAICS industry or the same geographic region as the supplier which we're looking at.
0:32 - this example, this supplier is currently being paid in zero days and the ADA Platform's finding a supplier either within the same industry or region or combination of both within the and the internalized spend file on average being paid in 37 days.
0:51 - if we click on the strategy and scroll to the right, we can see a breakdown of this strategy. the industry region standard, we found 121 spend lines, the minimum being 10, the average being 37, the maximum being 90.
1:07 - For the industry standard. One day higher, that means it's just looking at the industry and ignoring the geographic region of this supplier.
1:17 - 123 spend lines, minimum 10, maximum 90, average 38, when just looking at the geographic region. And ignoring the industry, over 3000 spend lines, maximum 102, minimum 1, on average 37.
1:32 - suggested increase from the ADA Platform is 37 days. That would unlock 57.8,000 U.S. Dollars. Again, if you change the currency up on the top row, number would be reflected in that currency.
1:46 - This supplier is located within the northern American region and within the electric lighting equipment manufacturing nakes industry. If we scroll down, it will give in depth description of the opportunity here.
2:01 - So in this example, the platform did not identify any combination I'ma need. the strategy for both a combination does not apply, but it did find the industry and the region separately.
2:16 - So the ADA Platform identified a high level 123 suppliers belonging to the same industry with an average of 38 days and the region over 3000 at 37 days.
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