Pricing and Purchasing Service
Understanding supplier costs
Enhancing supply chain efficiencies
Global Insight Pricing and
Purchasing Service
When it comes to planning purchases, setting budgets, and bidding
proposals, it can be tough to make the right decisions. Global Insight’s
Pricing and Purchasing Service can help:
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

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Benchmark buys versus market prices
Understand market fundamentals and the
impact on supplier’s cost structures
Effectively assess supplier quotes
Enhance strategic timing of buys to
capture maximum savings
Improve project cost estimation process
Global Insight Credentials
For over 25 years, Global Insight has been
the recognized leader in providing detailed
price and wage projections to
companies around the world.
Our credentials are
second to none.
23 offices
in 12
countries
325 experts
fluent in 30+
languages
140+
advanced
degrees
170
industries
and 200+
countries
covered
Commodities and Wages
Our Pricing and Purchasing Service contains detailed global
information for over 800 commodities and wages.
Detailed Global
Historical Data
Global
Material
Prices and
Wages
Forecasts based on
market fundamentals
Extensive historical market data combined with our projections
can help you more effectively manage your supply chain costs.
Assess Supplier Quotes
Assessing supplier quotes is simple with the Cost Analyzer.
This Excel-based tool lets you access our commodity cost
structures and detailed market projections.
By analyzing an
industry’s cost
structure and endmarket demand you
can easily determine
if a price hike is
justified and whether
there is room for
negotiation.
Assess Supplier Quotes
For example…Your circuit board supplier has increased their price
by 3%. Is it justified?
Labor
(Represents 37% of cost)
2.5% Increase
Capacitors, Resistors &
Various Components
(Represent 33% of cost)
1% Decrease
Semiconductors
(Represent 10% of cost)
2% Increase
Equipment/Components
(Represent 15% of cost)
2% Increase
Solder and Supplies
(Represent 5% of cost)
0% Increase
The increase
is too high.
An increase of
1% is justified
Benchmark Costs
Margin Analysis – How Firm is that Quote?
Our Cost Analyzer allows comparisons of market prices to suppliers’
costs, including productivity adjustments that tell the real story.
Construction Machinery and Equipment
1.25
1.20
1.15
1.10
1.05
1.00
0.95
0.90
2000
2001
Prices
2002
2003
Input Costs
2004
2005
2006
2007
Productivity Adjusted Input Costs
A total market
perspective, which
includes
demand,
It appears
as cost,
productivity,
andare
market
though you
drivers,
allows
you to
getting
a good
identify
industry margins
deal…
and evaluate supplier
…until you
performance.
include
productivity
Armed
with this data,
adjustments.
you can go back to the
table and negotiate a
better price.
Understand Markets
Understanding the market is key to projecting price changes. All too often,
purchasers make the mistake of using last year’s increases to forecast this
year’s prices. About half the time, they are paying more than they need to.
Prices are at a Turning Point
Global Insight
forecasts whether
costs will rise or fall,
allowing you to
negotiate the best
price or determine the
best time to buy.
2.7
6.0%
2.4
4.0%
2.1
2.0%
1.8
0.0%
1.5
-2.0%
1.2
-4.0%
0.9
-6.0%
0.6
-8.0%
1996
1998
2000
2002
2004
2006
Global Insight Industrial Materials Price Index, Jan 2002=1.000
Industrial Production, G7 Economies, Year-Over-Year Change
Avoid Cost Overruns
Choosing the right index is critical to projecting future expenses. Too
broad or too narrow a category might cost you millions.
(Pct Chg)
The Wrong Index Can Cost Millions!
8
Our Pricing and
Purchasing Service
simplifies this
process by offering
over 1000 different
proxies, enabling you
to find the closest
possible match.
6
4
2
0
-2
-4
2000
2001
PPI, Aircraft
2002
2003
2004
2005
PPI, Nonferrous Forgings
2006
2007
2008
CPI (All Urban)
TRANSPORTATION EQUIPMENT
15 Producer Price Indexes
AGGREGATE
14
Labor CostsINFLATION MEASURES
16 Producer Price Indexes
MEASURING
AND Indexes
CONTROLLING
19 Producer Price
– Stages INSTRUMENTS
of Processing
10
Price
Indexes
9 Producer
Consumer
Price
Indexes
6
1 Labor
GDP Costs
Price Deflator
1000+ Indicators
PAPER
ENERGYAND PACKAGING
9
3 Market Prices
14
15 Producer Price Indexes
5 Labor Costs
With our vast selection of
global prices, wages, and
exchange-rates, you can
select the indicators most
applicable to your supply
chain…
…and we instantly present
past commodity/wage
performance and future
trends, allowing you to
benchmark purchases and
project future costs.
TRANSPORTATION
and LOGISTICS
STEEL
8
Consumer
Price
Indexes
11 Market Prices
7
16 Producer Price Indexes
3
4 Labor Costs
MAINTENANCE,
REPAIR and OPERATION (MRO)
FABRICATED METALS
7
Chemicals,
Plastics,
Petroleum & Rubber
29 Producer Price Indexes
7
Construction
&
Building
Materials
4 Labor Costs
10 Primary & Fabricated Metals
6
Paper, Printing,
& Packaging
NONFERROUS
METAL
PRODUCTS
7
Non-Electrical
and
Transportation Equipment & Machinery
17 Market Prices
7
& Other
Electrical Equipment & Machinery
24 High-Tech
Producer Price
Indexes
2
Miscellaneous
3 Labor Costs
CORPORATE EXPENSES
CHEMICALS AND ALLIED PRODUCTS
13 Corporate Overhead
13 Market Prices
9 Travel Expenses
35 Producer Price Indexes
7 IT Services
7 Labor Costs
8 Health Care Benefits
BUILDING MATERIALS
DEFENSE/AEROSPACE PRICES AND WAGES
22 Producer Price Indexes
11 Producer Price Indexes
9 Miscellaneous Price Indexes
8 Average Hourly Earnings
4 Labor Costs
5 Employment Cost Indexes
ELECTRONIC COMPONENTS
LABOR COSTS
2 Market Prices
110 Average Hourly Earnings ($/Hr.)
26 Producer Price Indexes
52 Employment Cost Indexes
5 Labor Costs
CONSUMER PRICE INDEXES
NONELECTRICAL MACHINERY
38 Indices
33 Producer Price Indexes
5 Labor Costs
ELECTRICAL MACHINERY
19 Producer Price Indexes
Compete Globally
To compete globally, you need to assess multiple locations around the
world. Effective global expansion requires consistent price and wage
intelligence across countries and regions.
The service tells you
how much wages are
today…
and how much they’ll
grow tomorrow.
Where to Locate a Manufacturing Facility?
2004 Compensation and Annual Percent Change in Unit Labor Costs
Pct Chg
Hourly Manf Comp
The Cost Analyzer
contains over 250
international price and
wage indexes and a
wide assortment of
exchange rates.
$35.00
8.0%
$30.00
6.0%
$25.00
4.0%
$20.00
2.0%
$15.00
0.0%
$10.00
-2.0%
$5.00
-4.0%
U.S.
Taiwan
Hourly Comp - left
Korea
Germany
Unit Labor Costs - right
Analysis Behind the Numbers
More than just a database, Global Insight’s Pricing and Purchasing
Service gives you the analysis behind the numbers, enabling you to
understand industry fundamentals and the drivers of price changes.
Get the Upper Hand
With Global Insight’s Pricing and Purchasing Service, you will:




Achieve greater accuracy in cost benchmarking,
quotation analysis, and project-cost estimation
Gain more leverage in contract negotiations
More effectively set purchasing budgets and defend
them with management
Improve supply chain management
The Savings Add Up
Our Pricing and Purchasing Service finds the hidden money in
your supply chain to maximize savings!
 The Center for Medicare and Medicaid Statistics uses our detailed
price and wage forecasts for setting reimbursement rates for
health facilities.
 The U.S. government’s Defense Contract Audit Agency (DCAA)
uses our inflation projections to evaluate contract proposals for
many federal agencies.
 A transportation equipment manufacturer used our Pricing and
Purchasing Service and saved $2.2 million in one buy.
 A diversified machinery manufacturer used the Cost Analyzer and
saved $60 million in one year.
Contact Us
Find the money hiding in your supply chain. Call us today:
North and South America
Mark Ulmer
+1.202.481.9229
[email protected]
Europe, Asia and Africa
Jenny Sleep
+44.20.7452.5199
[email protected]
For more information: www.globalinsight.com/Pricing
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