Required Spend Management Reading: Supply Watch

Before I left FreeMarkets, one of my last acts was to assemble a team to construct a customer publication that would analyze regional and global supply market category trends. That humble project has morphed into a quarterly publication, Ariba Supply Watch (note to Tim Minahan: notice the legacy FMKT influence in the use of the term "supply" ;-). The latest edition, linked above, is free to all readers via the Ariba Spend Management learning center. Without exaggeration, it's probably the most useful publication that any vendor or service provider in the Spend Management arena publishes or distributes. Every time I read it, I can't believe that Ariba gives it away to registered users of their learning center -- the level of intelligence it provides is something that many have told me that they could most certainly charge for.

Each issue of Supply Watch details savings and category pricing trends on a global basis across such areas as capital goods, construction, engineering, electronics and electrical, IT/telecom, hardware, metals, paper and packaging, plastics and rubber, raw materials, services and MRO, and transportation and logistics. In addition, each issue offers a feature article that examines a category trend in more detail. In the Q106 issue, the feature article, authored by Justin Falgione, an Ariba Category Manager, offers a deep dive on sourcing and managing contract labor spend.

I also enjoyed the "Category Field Guide" on the automobile components market in India, which provides a detailed breakdown on the Indian tier one and tier two automotive market, including providing information on suppliers in key categories. According to the article, the major advantages of manufacturing in India are: "low labor costs, engineering and design capabilities, quality (there are 384 ISO certified, 223 QS9000, 83 TS16949, 9 QHSAS 18001, and 1 Japan Quality medal companies operating in India), available of qualified engineers, flexible production lines and a high level of employee cross-training, ability to implement continuous improvement initiatives, high operating efficiencies which allow for cost control despite volatile raw material costs, good adaptability to eProcurement, constantly reducing excise and custom duties, and ... [low or no] exports are subject to taxes."

If you're involved in any aspect of sourcing or Spend Management, Supply Watch should be required reading. As I read through each issue, the question that always pops into my head is when will Ariba begin to monetize the type of IP it now gives away for free in resources such as this? The good news is that until they figure this out, we all stand to benefit. As further reading, check out a previous post of mine on a similar subject.

Jason Busch

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