Total Cost of Ownership Supplier Performance Benchmarking

The challenge

01

Procurement decisions were made strictly on initial purchase price, awarding contracts to Supplier A because their unit price was 8% lower.

02

In the field, Supplier A components suffered a 3x higher failure rate during warranty periods, driving massive downstream warranty claims and dealer labor costs.

03

Procurement lacked the unified data to calculate true Total Cost of Ownership (TCO) including warranty, downtime, and replacement frequency.

How Yukti solves it

01

Unified Supplier Quality & Reliability Database

Yukti connects procurement purchase orders, warranty claims, dealer repair invoices, and telematics failure logs into a single data layer.

02

True Total Cost of Ownership (TCO) Calculation

Computes net TCO per supplier by adding warranty claims, field labor, vehicle downtime, and return logistics to the initial unit purchase price.

03

Side by Side Supplier Benchmarking Scorecards

Renders interactive scorecards comparing competing suppliers on Mean Distance Between Failures (MDBF), claim rates, and lifecycle cost.

04

What If Procurement Contract Simulator

Simulates the 3 year net financial impact of shifting 50% procurement volume from low cost/high failure Supplier A to high reliability Supplier B.

05

Data Backed Supplier Contract Negotiations

Equips procurement leaders with empirical defect data to negotiate supplier price concessions and extended warranty coverage terms.

The outcome

identified that Supplier B delivered

0%identified that Supplier B delivered

downstream warranty claim expenses reduced

$0Mdownstream warranty claim expenses reduced

• Identified that Supplier B delivered a 14% lower net Total Cost of Ownership despite an 8% higher initial purchase price.

• Downstream warranty claim expenses reduced by $3.2M by reallocating sourcing contracts to high reliability suppliers.

• Accelerated supplier evaluation and contract renewal analysis from 2 months to under 10 minutes.

Representative scenario: a modelled industry situation showing how this accelerator applies. Figures are projections, not a named client result.

Capabilities used

Every accelerator is assembled from the same capability layer, so a workflow you adopt here shares its foundation with the rest of the portfolio.

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