Project Procurement and the Power of Predictive: Where Speed-to-Market Creates Revenue Advantages
In this deep dive session on project procurement, we’ll hear from leaders at Power Design and KES about how they leveraged Arkestro in sourcing and benchmarking for procuring materials and services as projects. Project procurement, while involving the methods of strategic sourcing, supplier negotiation, and cost modeling, has significant differences in process design and desired business outcome related to the role it often plays in driving both margin and topline revenue. Particularly for fixed-price contracts, the ability of the estimation team to produce reliable cost targets and the procurement team to then hit or beat those targets will often determine the final margin that the business is able to realize on any given project. Yet most procurement platforms are designed either with ongoing supplier contracts or one-time purchases in mind, not for procurements related to a specific project. In this session, we’ll look specifically at procurement procurement and the power of predictive procurement in creating efficiencies, driving margins, and acting as a force multiplier on procurement’s bandwidth.

• The Power of Predictive in Multi-Geography Construction Contracting: Power Design is a leading trade contractor with its roots in electrical contracting for large commercial and multi-unit projects such as sports arenas, college dormitories, and apartment buildings. For Power Design, sourcing fits into two distinct business processes: estimating costs when they bid on a project, and then much later after they have won the project and need to perform work. Their unique challenge? Items they buy have a different price in each US state. Using AI via Arkestro's predictive procurement platform, they enabled real-time benchmarking to drive competition that contributed directly to their margin. Whereas game theoretic negotiations have been a part of sourcing for decades, Power Design and Arkestro's approach make use of geographical clustering and segmentation -- recognizing that the price of industrially distributed construction materials such as copper wire have regional and even site-specific cost variances that cannot be captured by traditional approaches to benchmarking, market research, and bi-lateral negotiation. The geographical segmentation of cost data represents a truly innovative practice in the field of the strategic sourcing of construction materials.
   
• The Power of Predictive in CapEx Procurement for Oil & Gas: KES is a leading provider of equipment and complex engineered solutions for the energy industry. The challenge they faced prior to Arkestro centered on the highly bespoke nature and complexity of the equipment, parts, and indirect materials necessary to deliver a CapEx project for a customer. Simply by using predictive procurement to shorten the offer-to agreement cycle across their supply base, KES was able to unlock dramatic efficiencies not just in procurement, but across their revenue cycle.

Attendees to this session will leave with specific toolkits and playbooks for:

• Implementing predictive procurement for projects, specifically in construction and CapEx
• Stakeholder communication tools, including KPIs and formulas, for project procurement