In my last post I reviewed the importance of Market Intelligence (MI) to supply chain managers, and also discussed some of the different types of MI. In this post, I will review typical ways to collect this information.

A simple example of MI would be a commodity report that detail plant capacities for steel production. Organizations that make steel-based products will use these reports to determine which mills to buy from and forecast future costs.

The importance of market intelligence is the example above is easy to see. Without commodity reports, managers would find it difficult to predict supplier outages, budget for price changes, or know when to hedge.

However, real MI is much more complex than this example. Working in a vacuum, an individual supply chain manager may have access to this information. But what if there are conflicting numbers? What if this information is outdated, or markets have changed since this report came out? What if the truly relevant information for this supply chain manager isn’t factored into this report?

The manager might recognize these issues, and supplement their commodity reports with updates from suppliers. Surely the supplier will have their finger on the pulse of the industry, and can provide me with more up to date information if needed. In many cases, supplier updates will come during quarterly lunch meetings, or even more likely, a phone call to a supplier right before a major report or budget is due. The interesting thing to note is that suppliers are likely getting their information from similar reports. If a manager’s goal is to corroborate information, the likelihood is the supplier input will match the input of a commodity report. If their goal is to triangulate their information, getting different input from different sources and seeing how they correlate, than more information is still needed. So where else can you get it?

One good source is industry publications, and I break these up into two types, buyer and supplier. An example of a buyer industry publication might be Parcel magazine. This publication is tailored to those that utilize parcel services, basically, customers of the industry. A supplier publication is quite different. These publications, which focus on the supplier as their readership, are great to find insider information or general industry information that your supplier may not share with you. It’s also a great way to better understand your suppliers business. Electrical Wholesaling Magazine is a good example of a well written supplier-focused industry publication.

Another good source of MI are Subject Matter Experts (in-house or outsourced). Many companies will hire former sales or operations people from their supply base and bring them in as category managers. If they still have access to the same networks they can provide inside information that is not readily accessible through publications.

The outlets described above (commodity reports, industry publications, SME’s) are all the traditional ways to collect market intelligence. Most companies will utilize one or two of these methods to collect MI and stop there. However, none of these methods take into account the fluidity of markets. Markets are dynamic, constantly changing, and to keep your finger on their pulse requires constant, real time, data refreshment.

Real time market intelligence can only come by through constant market gathering and analysis of market information. Most category managers will learn something new each time they go through a sourcing event, but constant active market sourcing is not feasible (if you want to maintain any good relationships with suppliers). This is where the use of more dynamic or non-traditional data collection methods come into play, normally by collaborating with resources outside the organization. In my next post, I will review how to collect dynamic market intelligence.
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Joe Payne

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