Bradley’s Law: Pricing Competitiveness Mirror Supply Chain Influence

A company should expect to pay for a specific electronic device a price commensurate with their Competitiveness within that particular commodity. This Competitiveness is the measure of how the supply chain sees the company – Ken Bradley, Founder & CTO, Lytica Inc. When Ken Bradley founded Lytica in 2005 as a consultancy practice, his primary…

Market Price Normalization Improves Competitiveness

When we assess a new client’s spending against market pricing, we usually see a distribution of prices made up of overlapping distributions. A typical example looks like the Competitiveness Profile illustration below. The profile suggests three distributions. The first is a fairly tight distribution of good pricing positioned where half of the distribution is seen…

Wanted: A Few Good Lean Benchmarking ‘Sensei’

To companies focused on operational excellence, Lean Principles and the discipline of Benchmarking are considered two complimentary and indispensable tools toward achieving world class performance. Getting Lean is all about identifying and getting rid of waste, where waste is defined as any non-value adding step that customers are unwilling to pay for. Benchmarking is a…

Purchasing: Do you Really Understand Pricing?

Since my company, Lytica Inc., introduced analytics based price prediction for electronic components, many major EMS and OEM companies have saved millions of dollars by applying this technology to their materials spending. As with the disruptive technologies described by Clayton Christenson in The Innovator’s Dilemma, those stuck like deer in the headlights clinging to a…

6 Obstacles to Achieving Cost-Reduction Goals

Lytica Inc. tracks current prices paid – not distributor website prices – on about one million electronic components and uses this information to assess our clients’ spending competitiveness and estimate appropriate pricing for their worst price components. In many cases, we assist customers in implementing better pricing in their supply chain. From this vantage point…

Becoming & Staying a Leader: the Agilent Way

Although the company announced the split in September, the Board and senior management team at Agilent Technologies impress me for giving their shareholders and employees such a great Christmas gift. As announced, this great company will split into two separate units; one focused on life sciences and the other on test and measurement.  I like…