Market Intelligence (MI) is critical for any supply chain manager. MI helps businesses assess supply chain risk, evaluate supplier pricing proposals, and realize new operational efficiencies. However, many businesses rely on a limited, and in most cases outdated, set of market intelligence as the basis for decision making. Markets are constantly changing, but getting access to new information in real time can be difficult. Over the course of my next few blogs, I am going to examine what market intelligence is, how to get it, and how to use it in the decision making process.

So first, off, what is Market Intelligence? The Wikipedia definition of MI is “the information relevant to a company’s markets, gathered and analyzed specifically for the purpose of accurate and confident decision-making in determining market opportunity, market penetration strategy, and market development metrics.”

For supply chain managers, MI is information used to assess risk, ensure supply, and reduce total landed costs of products and services used to keep organizations running. Typically, supply-side MI would include:

Supplier Intelligence - At a high level, Supplier Intelligence includes the suppliers in a particular market, the financials of those suppliers, the types of goods and service levels each supplier provides, cost models, discount levels, and volume thresholds. Digging deeper, you might include information on mergers and acquisitions, relationships between distributors and manufacturers, standard industry KPI’s, and supplier plant capacities.

Product Intelligence– Product Intelligence includes the types of products and technologies available, the materials used for each product type, and the cost drivers for those materials. Additional product intel could include an assessment of the differences in products by manufacturer, as well as any upcoming technological advancements. Make vs. Buy assessments might also be included in this category.

Logistics Intelligence – Logistics Intelligence would include the common shipping methods for the products purchased, standard lead times associated with each, non-traditional shipping methods, appropriate inventory positions, inventory carrying costs, and options for vendor managed or consignment inventory.

Legal Intelligence – Legal Intelligence includes an understanding of contract clauses for a given commodity type - what clauses should be in an agreement and what terms and conditions buyers should be careful to avoid.

Trade Intelligence – Trade Intelligence includes an assessment of the political landscape, import restrictions, tariffs, regulations, weather, labor, and logistics issues of any country/region that can provide your organization with product.

Competitive Intelligence – Keeping to the supply-side, Competitive Intelligence includes a consideration of the percentage of market share your company represents for a particular commodity, as well as the market share of your competition. It should also include an assessment of your competitors purchasing habits and spend profile – are they ordering, managing inventory, shipping, the same way as you are, and if not, what are the advantages to their process over yours.

All these bits of information make up MI, all have a critical impact on the supply chain, and some are easier to get than others. In my next post I will examine the sources of MI and explore some best practices around collecting this information.
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Joe Payne

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