Earlier today, we shared some trends around how customers of CombineNet (a SciQuest company) are increasingly using the company’s advanced sourcing toolset outside of logistics (see: CombineNet: Optimization & Advanced Sourcing Adoption Trending Beyond Transportation). This is an observation that’s not limited to CombineNet customers; there are great category sourcing use cases such as marketing spend and contingent labor coming out of other providers in the sector as well. But given CombineNet’s pioneering role in the advanced sourcing area, it is particularly interesting to observe customers that have migrated from using the toolset only in logistics to other areas of the business, including those using it for goods for resale (GFR) in the retail industry.
At CombineNet’s customer conference today, I had the chance to speak with a company with significant global retail operations attending the show. They started out using the CombineNet solution specifically in logistics and have migrated over the years to more of a “do-it-yourself” approach as the CombineNet Advanced Sourcing Optimizer application evolved into a full-fledged self-service toolset not requiring consultative services. But this organization is not limiting itself to logistics categories anymore.
Along with other categories falling under the costs of goods sold (COGs) umbrella, this company has used CombineNet in the following areas to source merchandise: furniture, mattresses, fabrics, fans, flowers, lawn mowers, mobile computers and accessories, paint, power tools, sewing machines, and bed linens. The procurement executive told Spend Matters that the results they are achieving in these categories through advanced sourcing approaches which solicit supplier creativity through alternative and conditional offers are often in direct proportion to the individual initiative that suppliers take to submit creative offers (i.e., “apples to apples” bid comparisons do not yield the best results).
Retail sourcing and merchandising will never be the same again if advanced sourcing approaches take hold in these areas. But no doubt suppliers stand to gain as much through the process from being able to differentiate their wares based on factors outside of unit cost and the ability to meet highly specified requirements (e.g., show up at this loading dock, in this window, or face a 1% per hour penalty, per the set requirement).
Stay tuned as our coverage from CombineNet’s customer conference continues this week.