Overview
Every sourcing cycle leaves money on the table when teams cannot compare like with like. Should cost gap analysis closes that blind spot by aligning technical attributes with market reality and supplier performance. With structured attributes and consistent families, you can transform quotes into auditable targets that withstand scrutiny from engineering, finance, and suppliers.
What It Solves
- Opaque price spreads for similar geometry
- Weak leverage during negotiations due to missing targets
- Slow preparation across disconnected ERP, PLM, and spreadsheet silos
- Limited visibility into material, process, and tolerance drivers
Method That Works
- Normalize part families with canonical attributes
- Compute target prices using benchmarks and cost formulas
- Compare quotes to targets to surface gaps by supplier, plant, and region
- Quantify addressable savings and prioritize high impact parts
- Close the loop with quarterly supplier scorecards and re-sourcing where needed
Quick Wins
- Map top spend categories to families and compute targets
- Flag margin outliers and brand premiums
- Produce a savings waterfall and align stakeholders on actions
- Share a one page pack per supplier with clear, traceable gaps
Metrics to Track
- Percentage of spend covered by targets
- Average price to target variance by family
- Savings realized vs identified
- Time to prepare sourcing packs
How Covalyze Helps
- Use COVALYZE Analytics to normalize families and compute targets
- Explore Applications → Should Cost Gap for guided workflows
- Pair with Supplier Benchmarking to validate quotes and track improvements
FAQ
Do I need historical clean data
No. Start with a single family and enrich attributes. Targets improve as coverage grows.
How do you handle volatile materials
Targets can include indexed material curves and update automatically during sourcing windows.
Get Started
Start a focused pilot with one strategic category. Book a demo or Start a pilot today.
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