Friday Rant: Bankrupt and Foreclosed Households Contribute to Recovery
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Take energy, for example. Most companies have a dedicated expert who works to ensure that the appropriate hedging strategy is in place. Most of those folks were in for a rough ride the past few years and I know of a few casualties and early retirements that resulted.
According to David, First Index's final decline was very sudden. What's more interesting than how it ended is how it began--and what made First Index different. First Index hosted an online site where it facilitated the exchange of supplier information to buyers, but the primary core of the business remained offline, where groups of employees would cold call buying organizations to drum up RFQs which they could then provide to their active suppliers, in effect "making the market," just as a trader does on the floor of an exchange. Using this model as a foundation, First Index's core revenue generation came from selling subscription services to suppliers (for anywhere from $3,500 to over $10K per year), and in turn gave them access to buyer RFQs. The primary categories they focused on were a near carbon copy of the early target areas FreeMarkets (not Ariba) tackled from a strategic sourcing perspective as well: machinings, stamping, fabrications, electronics, plastic injection molded parts, etc.
The Corporate Executive Board published what they consider the top ten risks facing corporate America as of January 2010. According to me, nine of these risks have a disrupting impact on a supply chain, though some are more apparent than others. All of them can stop a supply chain from functioning as an adaptive, smooth process, supporting the organization it serves. If my thinking holds logic, the supply chain is an enterprise (corporate-wide) risk.
Why is enterprise risk important? Because the risk mentioned, as it relates to the supply chain, impacts every part of the organization that buys, stores, and transports. Applying risk management tactics to the supply chain is a solution to the disrupting risks. These tactics will yield a mobile, adaptive, and light supply chain that reacts well to changing economic conditions, blips in markets and material shortages. The key is to recognize, analyze, and anticipate risks and make plans to mitigate them.
An increasing number of companies also use spend visibility as a means to support other initiatives, including supplier diversity reporting, rather than have individuals and small groups tackle these processes independently through different platforms. (The exception to this is in the case of multi-tier reporting requirements, which few spend analysis platforms support without significant customization). If we look at spend analysis independently today, what is the best way to segment the landscape and the various providers within it? Whom should companies shortlist?