Unlike Marvel’s blind superhero Daredevil, who successfully protected citizens in Manhattan’s Hell’s Kitchen, when it comes to creating a sustainable growth strategy, flying blind isn’t a good plan. Traditional industry KPIs alone –the movement of permits, rig counts, the number of completions – can’t help you drive a fiscally sustainable supply chain strategy because they don’t inform you on price.
Don’t be a Daredevil — stop flying blind
This example below demonstrates why the “Daredevil” approach to supply chain strategy doesn’t work. When you only look at Company B’s price curve over two years (left), a price drop of 40% looks favorable. But data shows that the aggregated market price index dropped by 80% during this same period. The comparison of Company B’s prices with the market (right) demonstrates that there is room for additional cost savings, as it is still overspending compared to the market.
Single Company Category Level Price Curve Compared to a Company Category Level Price Curve Against the Enverus Market Price Index
New Enverus Market Price Indices solve this problem by combining the nearly $200 billion of annual spend flowing through the OpenInvoice network each year with Enverus activity-based metrics. Now companies can benchmark their own pricing on various categories of goods or services to market indices in a specific region. Unlike other solutions that are based on assumptions and “black…