duhu2000/spend-analysis

UNIVERSAL RULES (apply to every spend task)

• NEVER accept a vendor risk assessment that contains fabricated financial data -- label all estimates and flag where primary data is unavailable
• ALWAYS include specific recommended actions with deadlines in every output -- observations without actions are not acceptable

MANDATORY OUTPUT HEADER

TASK:          [e.g. Category Spend Overview -- Packaging -- FY2024]
CONFIGURATION: [Loaded: supply-chain.local.md / Not configured]
DATA SOURCES:  [ERP / Finance system / Web search]

SPEND ANALYSIS WORKFLOW

Three Strategic Questions Spend Analytics Answers

Question 1: WHO are we actually buying from? -> Vendor concentration analysis; consolidation opportunity identification

Question 2: WHAT are we paying? -> Price consistency across sites/BUs; contract compliance monitoring

Question 3: WHAT SHOULD we be paying? -> Market benchmarking; renegotiation trigger identification

Analysis Types

Type 1: Category Spend Overview

DATA FROM ERP (define period: typically last 12 months):

• Total spend by category (top level and sub-category)
• Spend by vendor within each category
• Spend by business unit / site / cost centre
• PO compliance: what % of spend had a PO before the invoice?

OUTPUT:

CATEGORY SPEND OVERVIEW -- [Period]
================================================================
TOTAL SPEND ANALYSED: [X]

TOP CATEGORIES BY SPEND:
[Category]: [X] | [N] vendors | [N] BUs buying | PO compliance: [X]%

TAIL SPEND ALERT:
[X]% of spend is with vendors who each represent <0.5% of total spend.
[N] vendors account for [X]% of total spend.
Opportunity: rationalise tail to reduce transaction cost and compliance burden.

PO COMPLIANCE ISSUES:
[X]% of invoices received without prior PO (by category and BU).
Non-compliant spend: [X] -- escalate to Finance and Procurement leadership.
================================================================

Type 2: Vendor Consolidation Analysis

TARGET: categories with >3 vendors where commodity characteristics suggest consolidation would deliver price advantage without unacceptable supply risk.

CONSOLIDATION CANDIDATE CRITERIA:

• Multiple vendors supplying same specification / same category
• No strategic reason for multiple sources (i.e. not deliberate dual-sourcing)
• Combined volume would be meaningful to a single preferred vendor
• Competitive market with multiple qualified alternatives

CONSOLIDATION OUTPUT (per candidate category):

CONSOLIDATION ANALYSIS: [Category]
---------------------------------------------------------
Current state:
  Vendors:       [N] active vendors
  Total spend:   [X]
  Price range:   [low] -- [high] per [unit] -- [X]% variance
  Price winner:  [Vendor at lowest price] at [X] per unit

Consolidated state:
  Target vendor(s): [1 or 2 preferred suppliers recommended]
  Combined volume:  [X]
  Target saving:    [X]% discount estimated at consolidated volume
  Annual saving:    [X] -- [X] (range based on discount range)

Risk assessment:
  Supply continuity: [Single source risk? Mitigation?]
  Switching effort:  [Qualification, trials, tooling -- estimate]

Recommendation: [PROCEED / PROCEED WITH DUAL-SOURCE / MONITOR]
---------------------------------------------------------

Type 3: Price Consistency Check

IDENTIFY: same item or specification being purchased at different prices by different business units or sites.

DETECT WHEN:

• Same vendor code, same item code, different unit price
• Same item description, different vendor, significantly different price
• Same contract but different sites paying different prices

PRICE CONSISTENCY OUTPUT:

PRICE INCONSISTENCY REPORT -- [Category] -- [Period]
---------------------------------------------------------
Item:            [Description and specification]
Vendor:          [Vendor name]

Site/BU         Price paid    Volume    Annual spend
[Site A]        [X]           [N units] [X]
[Site B]        [Y]           [N units] [X]
[Site C]        [Z]           [N units] [X]

Price variance:  [X]% between highest and lowest
Best rate:       [X] (Site [X])
Saving if all aligned to best rate: [X]/year

Action: Issue group pricing directive; notify all sites of best rate;
require contract compliance from [date]
---------------------------------------------------------

Type 4: Market Benchmark

USE WEB SEARCH MCP to identify:

• Published market price indices (commodity categories)
• Trade association price surveys (sector-specific)
• Publicly available tender results (public sector categories)
• Analyst market reports (technology, energy, logistics)

BENCHMARK OUTPUT:

MARKET BENCHMARK: [Category/Item]
---------------------------------------------------------
Your current price:   [X] per [unit]
Market range:         [low] -- [high] per [unit]
Your position:        [X]% above / below market midpoint
Data source:          [Specify source and date -- never fabricate]
Data quality:         [HIGH -- published index / MEDIUM -- survey /
                       LOW -- estimate only]

IF ABOVE MARKET: Renegotiation recommended
  Estimated saving:   [X]% -- [X]/year at current volume
  Timing:             [Contract renewal date or next review]
  Leverage:           [Market evidence + volume commitment]
---------------------------------------------------------

Savings Pipeline Format

PROCUREMENT SAVINGS PIPELINE -- [Date]
================================================================
IDENTIFIED OPPORTUNITIES:
[Category]  [Type]          [Est. Saving]  [Status]  [Owner]  [Timeline]
[Category]  Consolidation   [X]            Draft     [Name]   Q[N] 20[XX]
[Category]  Price alignment [X]            Active    [Name]   [Month]

TOTAL PIPELINE: [X]
CAPTURED YTD:   [X]
REMAINING:      [X]
================================================================

NEVER DO THESE

• NEVER fabricate market benchmark prices -- always cite source and date; if no reliable benchmark available, label as "no reliable benchmark found"
• NEVER recommend single-sourcing a critical category without documenting the supply continuity risk and mitigation plan
• NEVER report "savings" without defining the baseline clearly: savings vs. prior contract / vs. market / vs. budget -- specify
• NEVER include tail spend vendors in consolidation analysis without checking whether they supply something unique or critical

ALL OUTPUTS REQUIRE REVIEW BY A QUALIFIED PROFESSIONAL BEFORE USE IN BUSINESS DECISIONS.