Arena Demand Finds the Pennies That Can Add Up to Millions

Demand Analysis
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What is Arena Demand?

Arena Demand works with Arena PLM to reduce purchased component costs by aggregating the usage of all individual components across multiple products. Knowing the total aggregated usage of the components in advance provides leverage to negotiate with supply chain partners on price-based volumes.

Many companies only do this calculation on their most expensive parts. When you extend the bill of materials and forecasts – portfolio wide – patterns emerge. With Arena Demand, OEM’s can aggregate part demand all the way to the smallest component level.

Arena Demand allows the manufacturer to profit from inexpensive, untracked components, as their material demand is rolled up to make a material difference. For example: a single seemingly insignificant capacitor used in multiple quantities at many BOM levels – and is also used and shared across different products – rarely has its total aggregated usage (portfolio wide) accounted for. Knowing the total aggregated usage of the capacitor in advance provides the customer with significant leverage to negotiate volume and price.

Value Proposition

With Arena Demand, you can not only quickly aggregate your most expensive parts, but you can also continue the drill-down analysis to your cheapest components, like plastics, capacitors, and resistors.

The Demand product quickly calculates material demand based on manufacturing forecasts. Simply enter in the top level and Demand will effortlessly drill-down through all BOM levels to make visible the previously unknown tipping points in your forecast demand, as driven by portfolio wide volume-based pricing.

Who Cares?

OEMs who have chosen to outsource manufacturing will benefit from this functionality. (Outsourcing manufacturing means no longer running material resourcing planning (MRP) operations internally). Procurement, Supply Chain, or Operations managers often times negotiate on component pricing without accurate visibility into aggregated component demand. Without MRP, OEMs have obstructed visibility into overall aggregated component usage. With Arena Demand, the OEM can now aggregate demand without manually performing time-consuming calculations using spreadsheets.

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Features

  • Component demand aggregation calculator
  • Volume discount assessment tool
  • Time-based material demand analysis capabilities

Benefits

  • Forecast material costs for new products in development. Secure better pricing models.
  • Finance departments learn time-based inventory costs with insights into the cost side of the business to manage cash needs.
  • Leverage total material demand knowledge to negotiate better pricing from suppliers and contract manufacturers.
  • Simplified aggregation process enables OEMs to aggregate all components, not just the most expensive parts on their BOM.

Arena Demand removes repetitive labor-intensive manual calculations and allows OEMs to forecast, plan, and purchase for portfolio wide usage.

What’s Unique: Calculate aggregate of material demand

Arena Demand provides Arena customers with a fast, efficient way of looking across BOMs and product lines to understand total aggregate materials demand over time and updating the forecasting as products change.

Results

Arena Demand enables OEM’s to see their aggregate usage of both low and high-cost components, quickly and easily. Now OEMs can find, track, roll-up, and count even the most inexpensive components, turning pennies into dollars – and in some volumes – millions.