If You Need to Bring The Hammer Down, Make Sure You Have An Anvil (Analytical)!

On New Year’s Day, 2022, Anvil Analytical (Anvil) was spun out of 4C Associates to bring a stand-alone spend-analysis technology solution to the market, based on the solution that 4C had developed over the course of a decade or so. (4C was founded back in 2000 to help companies with their Supply Chain and Procurement operations, and that required a deep understanding of the supply base and spend, and that required the ability to dig deep into the organizational spend.)

However, while the solution revolves around their service-oriented spend analytics solution (which can include a contract-focussed spend analytics module), Anvil Analytical also offers a Scope-3 Carbon Tracking, a country-based Risk Intelligence, a Market & Inflation Intelligence solution, and a Project Management (Savings Tracking) module.

When we say service-oriented spend analytics solution, we mean it’s a hybrid service/DIY solution. Anvil handles the data loads and refreshes, the validations, the mappings to your chosen taxonomy (which also maps to their internal taxonomy, more on this later), the initial implementation of the system, new report (dashboard) creation and customization (a certain number of hours for this are included in the annual subscription), and monthly/quarterly check-ins and advisory. (Depending on the client’s typical refresh interval and assessment cadence.) The client does regular monitoring, analysis, project identification and creation, savings tracking, and what-if analysis on market/inflation/project trends to identify new projects that the client wants to undertake. It’s designed for a Procurement department that is sophisticated enough to understand the power of spend analytics and use a modern tool to extract the insights it needs, but doesn’t have the manpower to do a lot of deep analysis work and/or any real data analysts on staff and wants help with the heavy lifting.


Depending on the organization size and maturity, the initial implementation and setup will take anywhere from 2 weeks to 4 months from the kick-off meeting. The first step is for the client to provide the Anvil team with data exports for the previous years [they need at least 2 years, or the year-on-year analysis won’t work, for example] from all relevant systems (ERP/AP/I2P). Anvil then manually processes subsets of these to create training sets and verification sets for its traditional AI-classification engine, trains the models, runs the verification sets, corrects the model, repeats until high accuracy, and then runs the full data set. At this point, the client is engaged, remaining errors corrected, the model retrained, and then the system is delivered. Simultaneous to the training process, they work with the client to identify any special reports or customizations the client wants to the primary reports and dashboards and build them simultaneously. Once the system is rolled out, they do an initial training session, review the primary analysis and identify initial areas for analysis, set up the support processes and methodology for the regular (incremental) data updates, and determine the goals of the monthly/quarterly cadence meetings and future training sessions. Every cadence meeting will review the results of the last update(s), identify new suppliers, and identify new analysis of interest.

With respect to validation and cleansing, they will establish data standards and formats and ensure all data adhere to them, normalize and identify suppliers against their database (or a third party database if you have a subscription to one where they have, or can develop, an API) which has almost a million suppliers, validate key pieces of supplier information (such as tax and registration ids), and fill in key missing data elements if they have it (or identify missing data that needs to be collected).

Spend Analytics

Spend analytics revolves around Materiality, Growth, Fragmentation, and Churn. Materiality, defined as a measure of both the scale of your spend and how easy it may be to access, is all about understanding the category spend breakdown, where the most spend, and possibly the most opportunity, is. Growth identifies which categories are the fastest growing (or fastest shrinking) in terms of your spend, and helps you identify where you may need more contracts, monitoring, control, or even (key) supplier development to reduce spend. Fragmentation, which measures how fragmented your spend is in each category compared to the average fragmentation that has been identified through thousand of engagements undertaken by 4C and Anvil Analytical, helps you identify [with color coding that show 50%, 75%, and 90% thresholds] where there is likely significant opportunity through consolidation (or significant opportunity to reduce risk if fragmentation is too low). Churn measures how much spend is being gobbled up by new suppliers in a category and helps you identify where you may need to introduce competition or innovation to keep costs down. This is summarized on one of the primary dashboards included in spend analysis – Deep Dives. Each of these area can be drilled into. For example, drilling into a materiality category from the main deep dive dashboard will give you your overall category spend, supplier count, high materiality supplier count, medium materiality supplier count, spend per business unit, spend per country, supplier spend per business unit, and so on. (And from here you can dive into just the higher materiality suppliers, or just one, and get the relevant insight.)

Like every other spend analysis tool, the entry point is the Summary Dashboard that summarizes your spend, on contract (if you have the contract [sub] module), supplier count, on PO, invoice count, average payment time, consolidation percentage, on-time payment, spend by L1 (top level of the) category (hierarchy), by business unit, by country, overall spend growth summary, and top X suppliers. Each of these can be drilled into for more detail. There’s also an insights dashboard that will give you, for a category, the materiality rating, growth rating, fragmentation rating, churn rating, and opportunity rating. Key insights and observations across each area (based on insights from Anvil’s market-intelligence modules, anonymized recent 4C project results or recent 4C insights, or market partners) are also included, as well as a breakdown by country, the likely chance of success against the main procurement levers (compete, consolidate, demand, or collaborate), and a Pareto analysis. It also highlights the top 5 opportunities based on spend and likely savings potential (based on market intelligence and/or a variance analysis), supplier growth by threshold, inflation impact, and index sensitivity. Finally, you can drill down to line level transactions if needed, or search for, and bring up, summary reports on any supplier in the system.

Contract Analytics

We’ll cover contract analytics next as it builds on spend analytics. In the Anvil platform, contract analytics is another set of dashboards that works off of contract metadata, which would be loaded during implementation and then updated in the regular refreshes. (Note that if you happen to be using one of their partner contract management solutions, they already have pre-built APIs and the loading of this data will take minutes. If your CLM has an API for metadata, they can build an extraction facility to extract that data as a service, and if not, they can work with flat-files as they do with spend.)

Contract Analytics is essentially another (set of) dashboard(s) and reports but focussed on breaking down spend by contract. The main dashboard will breakdown spend by on-contract vs. off contract, % category spend > XK (default 250K) on contract, suppliers on contract, expiring in the short term (3 to 9 months, for e.g.), contracts by business unit, and suppliers with > xK (default 250K) spend with no contract. Other relevant measures can be easily defined on implementation and, of course, all summaries can be drilled down to the line level. Since it’s essentially just another dimension of spend, we’ll conclude our high-level summary of it here.

Carbon Management

The Anvil Carbon Management platform was designed to help a company assess the scope 3 emissions of the goods and services they buy, segment the supply base as needed to support the different engagement approaches needed to maximize reach and results, support decisions when scores for tenders are carbon-adjusted, and determine B-corp accreditation based on carbon-based market ability.

The main entry point to the Carbon Management module is the Carbon Baseline Dashboard that allows you to drill into the spend carbon baseline, quantity carbon baseline, carbon insights, and carbon project tracker. The spend carbon baseline will give you your spend-based carbon footprint, your supplier count, and invoice count. It will break it down by Level 1 Category, Level 2 Category, and Level 3 Category. It will give it to you by supplier, by country, by business unit, and display the monthly totals relative to the supplier count. The supplier spend vs. carbon footprint breakdown can be particularly insightful when you find out that your top supplier with 5% of your spend only contributes 1% of your carbon footprint while your 11th place supplier (not included in the Top 10 report) that only accounts for 1% of your spend contributes 15% of your carbon footprint. It can happen, since carbon production is directly tied to the product/service — certain extraction and manufacturing activities are way more carbon intensive than others, and, even worse, depending on the technology being used, there can often be a 5X to 10X difference between traditional approaches and new techniques that only a few extractors/manufactures use. For example, in the EV industry, the production of a battery can produce anywhere between 2,000 and 16,000 kg of CO2. That means a poor process using materials from dirty raw material extractors can produce 8X the amount of carbon that needs to be produced. Now, it’s likely that in the automotive industry a battery supplier would be a top 10 supplier, but it might not be as obvious just how much carbon is in that Scope 3 battery supply chain vs. the steel supply chain or the electronics supply chain for the control system.

The quantity carbon baseline allows an organization to focus in on new carbon emissions between two points in time, scope 1 vs scope 2 vs scope 3, the measured % (vs estimated from third party sources), and the breakdown by business unit, country, supplier, and combination thereof.

The carbon insight dashboard allows you to drill into a summary of your carbon (project) pipeline and expected carbon savings, vs. carbon savings realized in categories in which you have undertaken improvement activities and marked such in the system (with a start date). You can drill into the forecast, the projects by status, and (potential) by business unit. The corresponding carbon savings dashboard allows you to see the carbon savings you’ve realized over time as a results of projects that have already started delivering results.

For the Carbon Management module to be a success, the organization needs to have data for each level 3 / level 4 product or service purchased. Most organizations won’t have this, and nor will their suppliers, but Anvil will work with you to produce the figures using average carbon production for the industry, category, and region using the appropriate carbon data source which may include, but is not limited to, the ONS (UK), Carnegie Mellon (USA), Project Carbon (France), and other sources they, or you, have access to that may be more accurate. This data will be updated on regular intervals when more accurate estimates and/or actual emissions tracking becomes available for a supplier, methods change as a result of development projects, or suppliers make extraction or production improvements on their own.

Note that use of this module could require significantly more services than the other modules as spend and contract analytics are more-or-less cookie-cutter, risk management is based on standard measures, and the market inflation & analytics offering is also based on market data, 4C & Anvil Analytical project results, and anonymized data from their e-Sourcing partners (which include Market Dojo and Unit4 Scan Market).

Risk Management

Once you have a grip on your carbon/GHG, you can get a grip on your risk. The risk management module tracks location based risks by country and allows you to determine the location-based risks of a supplier based on the country they are in and the risks associated with transport based on the route(s) available between an origin, intermediate, and destination country and the transport method chosen (as the risks are different for truck, rail, air, and water). When you select a country, or a set of countries that would represent a transport route, it will give you, for a slew of major risk factors, a risk score, origin rank, and total rank. These risk factors include factors such as:

  • carbon factor
  • economic quality
  • education
  • electric grid emissions
  • enterprise conditions
  • global slavery
  • governance

The idea is to provide you with a foundation on which to identify which Environmental, Social Responsibility, and Governance factors may be the most relevant to consider for a supplier, based on their location and the trade routes available to you from their location to your consumer market. This could allow you to short circuit an analysis (as you can quickly identify the most likely high risk factors that might eliminate the supplier from consideration). The data comes from 1500+ different open/publicly available sources that include the corruption perception index and transparency.org.

In addition, with the risk management module you will also get a set of risk-based spend management dashboards which profile an organization’s spend and show the likely types of risk associated with these areas.

Market Inflation & Analytics

The market inflation & analytics module provides category specific inflation projections with geographic variances to allow an organization to identify the categories where their costs are likely to rise, determine the projected spend uplift, dive into the sensitivity of each category (against a single inflation point), and, most importantly, counter supplier price increases when there is no data to support the increase.

The platform tracks over 1,000 commodity prices using indices from markets, banks, national bodies, and commodity markets and contains detailed forecasts for almost 100 commodities. The buyer can also drill into CPI Data, PPI data, SPPI power, ONS data, FRED data, Bureau of Labor Statistics data, IMF data, and Worldbank data.

The most interesting parts of the offering are the Market Insights and Buyer Power. The Market Insights integrate category risk weightings, weightings by subject matter (such as human & labour rights, business conflicts, health & safety, service performance, diversity, environment, etc.), and deep dices into constraints, drivers, opportunities and challenges from a demand/risk perspective and trends from a low, medium, high perspective which provide interesting insight into growth, models, inflation, or other factors. You can drill into a regional market and see its size, portion of global market, regional growth rate, global growth rate, average supplier maturity, average buyer maturity, and a Porter’s Five Forces analysis.

Buyer Power allows you to drill into the relevant data around buyer power vs. supplier power, which supports the Procurement levers widget in the summary dashboard (if you have the market inflation module). This insight is unique as it is based on the results of recent, anonymized, sourcing events from the client base of Anvil and its Sourcing Partners and allows you to see the expected results vs. (forecasted) inflation in the category.

Project Management

Project Management is one of the newest modules and accompanies the suite-wide UX update that is being released in December, 2023. It is standard GANTT-based project management for savings and carbon project management that integrates with the analytics and carbon modules so that an organization can also track savings/reductions over time. When we say standard capabilities, we mean that you can allocate resources, manage approvals, define tasks and milestones, track progress, get real-time updates and reports, drill into the project data, and customize it to your organizational processes. There’s nothing unusual, unexpected, or uncharacteristic, but that’s typically what you want for a project management tool.


While Sourcing Innovation is focussed on products, we will note that Anvil also provides sourcing & savings project management on demand, and will manage its partner companies who execute the event for you as well as extract all of the relevant event data and push it into your systems as appropriate.

So if the hammer must fall, consider bringing it down with the Anvil’s support. It’s a solid service-oriented spend-analytics solution that can start you off with the carbon, risk, and market insights you need as well as provide a baseline of services to help your Procurement team mature in their analytics skills and get going quickly.