In the first part of this two-part series on Panjiva, I explored some the information provider's latest global content partnerships as well as providing some details from founder and CEO Josh Green on the company's strategy. In this second part, I'll continue to share some insights from my discussions with Josh. To begin, I asked Josh during the course of the conversation whether companies are looking at the trade information his company provides (e.g., is a Chinese supplier's container volume falling or rising) as a panacea to global financially driven supply risk today. He responded, "People don't view the core data as a silver bullet." Rather, "it is best coupled with other data points". But what type of other information is best for companies to look at in tandem with trade data?
It's no surprise that the intersection of trade data with supplier financial information can help you "triangulate to get a reasonably good sense about how a supplier is doing". But in many cases, I've found getting good financial information on overseas suppliers can be quite challenging. As the saying goes, Chinese suppliers like to keep three sets of books -- one for the government and tax authorities, one for customers and one for themselves. The good news is that if you're circumspect about supplier-provided information, you can always use trade and manifest information to perform a sanity check on it (e.g., if a supplier claims revenue or profit is rising, but trading volumes are falling -- and commodity prices are on the rise -- it's pretty clear they're adulterating the books with the accounting equivalent of melamine).
But even if the information you're getting from suppliers is accurate -- and tells a similar story to that of third-party data -- it's equally critical to not look at this information in a vacuum or unilaterally take action based on it. Rather, as Josh suggests, the best use of it is to "tee up questions to ask" of your supplier. For example, if you "see that a company has lost a bunch of customers and that their volume with you is shrinking, it tees up questions you should be asking. Moreover, it also can give you a running start on contingency planning."
At the end of our conversation, I asked Josh what he thought about the Buy-American arguments coming out of Washington these days. He responded to me that "Buy-American is just rhetoric" and that "the economics are very difficult to make work". Simply put, global sourcing is here to stay. I certainly hope for Panjiva's business model -- let alone recovery in the domestic economy, both from import and export perspectives -- that his statement proves correct. What do you think?
As a final thought when it comes to Panjiva, I've come to value their openness and transparency when it comes to the sources of their data. When companies purchase supplier information, they're not just purchasing a commodity. In fact, I've heard of multiple situations recently where vendors were either reselling data they did not have a legal right to originally or cases where the data they were pushing out to customers was not as up to date as it could have been. In the areas of global supplier information, supplier diversity, supply risk, sustainability and basic enrichment, companies should demand to know where their data is coming from and how often it's being updated -- especially if their content provider is not gathering and actively managing it themselves. Data resellers and aggregators can be fine to work with, but you should be 100% certain that the data they're providing was legally obtained and can provide the current insights you need vs. a historic supplier snapshot.