Cost of Goods Benchmarking

High Level Design

Overview

To maintain profitability in any industry (and especially highly competitive ones), keeping cost of goods as low as possible is critical. Too often businesses lose sense of how their costs compare to others in the industry and in what areas they are overpaying. This dashboard allows a customer to get a sense of how their costs stack up again others by date, product area and region. It provides actionable information that a business can use to immediately lower costs.

Goals

The goal of this dashboard is to provide an understanding of the how a customer’s cost of goods compares to competitors and identify opportunities to lower costs. After identifying the lowest cost suppliers and the potential cost savings if the business were to switch to those suppliers, the decision makers can evaluate if the switch is suitable for the business.

Objectives

  • Understanding overall business costs and how it compares to competitors
  • For the categories I spend the most on, identify where I am paying a per unit price above the average
  • For the categories I spend the most on, find out the lowest cost supplier and what they charge
  • For the categories I spend the most on, calculate potential cost savings of switching
  • Evaluate offline the business case for switching and ultimately lower costs wherever possible

KPIs Architecture

Objectives

KPIs

Measures

Data Source

Understanding the a business costs and how it compares to competitors

Avg Order Cost

 

(avg([Cost]), all([Region Name]))

Fact Purchases, Dim Region

My Avg Order Cost as a % of Customer Base Average

([Average Cost], all([Region Name]))/avg([Avg  Cost])

Fact Purchases, Fact Benchmarking, Dim Region

Avg Order Price Paid

 

(avg([Cost]), all([Region Name]))

Fact Purchases, Dim Region

My Avg Order Price Paid as a % of Customer Base Average

([Average Applied  Unit  Price], all([Region Name]))/avg([Avg  Applied  Unit  Price])

Fact Purchases, Fact Benchmarking, Dim Region

Avg Order Volume

 

(avg([Quantity]), all([Region Name]))

Fact Purchases, Dim Region

My Avg Order Volume as a % of Customer Base Average

([Average Quantity], all([Region Name]))/avg([Avg  Quantity])

Fact Purchases, Fact Benchmarking, Dim Region

Identify lowest cost suppliers for top spending categories and see how I compare to the average

Quantity Purchased for 10 Categories by Total Cost

 

(sum([Quantity]), all([Region Name]))

Fact Purchases, Dim Region

Average Price Paid by Category

(avg([Unit  Price]), all([Region Name]))

Fact Purchases, Dim Region, Dim Category

Average Price Paid Overall

avg([Avg  Unit  Price]) + 0

Fact Benchmarking, Dim Category

For my top 10, identify the lowest cost supplier and calculate potential cost savings of switching

Total Cost Savings

sum([Category Name],((avg([Applied Unit Price]), all([Region Name]))-[Price of Cheapest Supplier])*([Total Quantity],all([Region Name])))

Fact Purchases, Dim Region, Dim Category, Fact Benchmarking

Lowest Supplier Cost by Category

min([Supplier ID],[Average Avg_Applied_Unit_Price])

Dim Category, Fact Benchmarking, Dim Supplier

Potential Savings by Category

((avg([Applied Unit Price]), all([Region Name]))-[Price of Cheapest Supplier])*([Total Quantity],all([Region Name]))

Fact Purchases, Dim Region, Dim Category, Fact Benchmarking

Potential Per Unit Savings by Category

(avg([Applied  Unit  Price]), all([Region Name]))-[Price of Cheapest Supplier]

Fact Purchases, Dim Region, Dim Category, Fact Benchmarking

Entities Relationship Diagram

Cost of Goods Benchmarking Dashboard

Implementation
Kit

The following resources will enable you to design your dashboard and data model with sample data and then apply it to your own data. Note that you will need to have a previously installed version of Sisense (you can use the free trial version if you’re not a customer).

Sample data and dashboard examples (direct download)

Documentation