Supplier Spend Analysis Definition

A supplier spend analysis is the process of reviewing and analyzing an organization’s spending on suppliers in order to identify opportunities for cost savings. The goal of a supplier spend analysis is to help an organization optimize its spending on suppliers by identifying areas where costs can be reduced.

There are several different approaches that can be taken when conducting a supplier spend analysis. One common approach is to categorize spending by supplier type, such as raw materials, services, or capital equipment. Another approach is to categorize spending by department or business function. Once spending has been categorized, it can then be analyzed in detail to identify patterns and trends.

One of the benefits of a supplier spend analysis is that it can help an organization negotiate better deals with suppliers. By understanding where an organization is spending the most money, negotiators can target specific areas for cost savings. In addition, a supplier spend analysis can help an organization improve its purchasing processes and procedures by identifying areas where there may be room for improvement.