SCDATA | GCPS System

Sourcing Analytics

Explore and Select Suppliers Globally

Boubacar Mody DRAME

Supply Chain Manager

1

1/36

Balance Benefit and Risk

2

2/36

Supplier Exploration and Selection

Explore / select suppliers:
- New suppliers (products & services) emerge, corporate changes (M/A, bankruptcy) constantly
- Global supply chain restructuring.

Sourcing is data driven:
- Millions $, hundreds of thousands of SKUs, thousands of suppliers.
- Data analytics is critical

3

3/36

Industrial Breakdown - Revenue

4

COGS is significant and the largest component of revenue for all industry sectors except financials.

4/36

Sourcing Analytics

Supplier intelligence: Explore and select suppliers globally.
Bargaining power analysis: Measure leverage & negotiation power.
Supplier benchmarking: Compare suppliers’ pricing, risks, and production capacity.

5

5/36

Assessing Needs & Supplier Selection Criteria

Align supplier selection criteria with the firm’s strategic objectives

6

6/36

Assess Needs and Supplier Selection Criteria

Methodologies:
- Industry trend: potential and risk.
- Competition positioning: strengths and weaknesses
- Breakdown analysis: identify strategic priorities

7

7/36

Pharmaceuticals Industry Trend

8

Germany : largest and significant booming during the pandemic but slowing down aftermath.

8/36

Sanofi global competitors

9

Johnson and Johnson is the leader in revenue in the Pharmaceutical industry.

9/36

Profit frontier

10

Within the SP500 IT companies, JNJ  led in total revenue but not in profit margin, LLY is better in operating margin than Johnson.

10/36

COGS is the major cost driver

11

A revenue breakdown shows Johnson and Johnson gross margin is 69% in 2024,

11/36

CPU Supplier Selection Criteria

Technology, quality & supplying capability

1.Innovative & technological capability, quality

2.Production and supply chain capability

Cost savings

3.Pricing / profitability

4.Bargaining power

Risks

5.Financially health / robustness

6.Leaks & competition

...

12

12/36

Supplier Intelligence

Explore and identify potential suppliers globally

13

13/36

Supplier Intelligence

Steps:
- Where to find them?
- Industry trend and stability.
- Industry concentration & competition intensity – competitive vs. monopolized.

14

14/36

Where to Find Suppliers? GICS vs. GCPS

Industry classification, e.g., GICS

Search products or services, e.g., GCPS

15

15/36

Where to look for semi-conductor suppliers?

16

The GICS industry classification happen to have a sub-industry named pharmaceuticcals that so we can use. Where to look for Pharmaceuticals suppliers? Let us check out the countries with the strongest semiconductors industry.

16/36

Where to look for semi-conductor suppliers?

17

Bar chart shows more clearly their relative sizes. US is the no 1 in revenue, far bigger than other countries Switzerland and China are 2nd and 3rd  in pharmaceuticals.

17/36

Industrial Trend - Pharmaceutical

18

China Pharmaceuticals is the largest and most profitable, and also growing fast especially during COVID. Switzerland is second in size and profit, USA overtook China in net income.

18/36

Industry Concentration

Major players? Competitive or monopolized?

US and China

19

19/36

Concentration and Competition Intensity - US

20

US  Pharmaceutical: top 4 companies accounted for ~80% of market share, relatively competitive and has lots of choices … The major players are Johnson and Johnson,Merck , Lilly, ...

20/36

Concentration and Competition Intensity - Total Revenue

21

China  Pharmaceutical: a dominant playe + lot of choices. The market is becoming more concentrated. Major players: China Resources ,Fosun and Huadond.

21/36

global Pharmaceutical suppliers

22

Globally, TSM is the largest ...

22/36

global semiconductors suppliers

23

Considering size and diversity, some potential suppliers for the Pharmaceuticals could be  Roche, Eli, Merck,

23/36

Bargaining Power Analysis

What is my leverage? Who has the bargaining power?

24

24/36

Leverage

25

25/36

Bargaining Power Index (BPI)

BPI << 1, supplier has power, vice versa

26

26/36

Example: Apple BPI with IC Suppliers 2022

Semiconductors	Apple’s spend $M	Suppliers’ Revenue $M	BPI
IC total	67060
ADVANCED MICRO DEVICES (AMD)		23601	2.84
GLOBALFOUNDRIES (GFS)		8108	8.27
INTEL (INTC)		63054	1.06
QUALCOMM (QCOM)		44200	1.52
TEXAS INSTRUMENTS (TXN)		20028	3.35
BROADCOM (AVGO)		33203	2.02
TAIWAN SEMICONDUCTOR MANUFACTURING CO (TSM)		73868.23	0.91

Apple has power over all suppliers except TSM

27

27/36

Supplier Benchmarking

Compare suppliers’ pricing, profitability, health and production capability

28

28/36

Supplier Benchmarking

Steps:
- Pricing / profitability analysis: pricing, profitability, efficiency.
- Financial health analysis: short / long-term liabilities and risks.
- Production & supply chain capabilities.

29

29/36

Pricing / Profitability Analysis

Pricing: Gross margin, value added (e.g., technology)
Profitability: Net margin.
Ideal suppliers: Attractive pricing and very profitable.
Deceiving suppliers: Attractive pricing but barely profitable.

30

30/36

Pricing and profitability

31

TTSM: most profitable w/ lowest pricing relative to China

31/36

Financial Health Analysis: Short-term sweets vs. Long-term crisis

For critical parts, you need the suppliers to have a rock-solid financial health.

A typical trap: good one-time deal and long-run crisis.

32

32/36

Liabilities vs. Equity

33

Breaking down these companies’ total assets by liabilities and stockholder equity, we can see that all suppliers are healthy with relatively low liabilities. China Resources had the highest liabilities (~50% of total assets), it's still healthy.

33/36

Enterprise Comparison - Risk

34

A more comprehensive and detailed enterprise comparison can give us more insights into both short-term and long-term risks for these companies, such as the current ratio (ability to pay short-term obligations using its current assets), quick ratio (current ratio excluding inventory), liability asset ratio, and long-term debt ratio. For instance, Texas Instruments has the least short-term risk but relatively high long-term risk.

34/36

Production & Supply Chain Capabilities

Does the supplier have sufficient production capacity: PPE?

Can the supplier secure production equipment and raw materials?

35

35/36

Property, Plant and Equipment

36

 Pharmaceutical manufacturers with top production capacity (PPE): Johnson > China >> all others.

36/36

Sourcing Analytics 2026 - Boubacar

Primary Modal