Category Archives: Commentary

What Do You Mean, a Coed Sauna? On Sourcing Activity Synchronization and Customers

Screen Shot 2014-07-23 at 5.03.41 PM Art van Bodegraven, managing principal of Van Bodegraven Associates and founding principal of Discovery Executive Services, is back with another essay for Spend Matters. As we look for better ways to integrate and synchronize sourcing and procurement activities intelligently within the greater supply chain, it is easy to become confused about who and where the customers are. You know, the ones we are supposed to be delighting? This is a burning question in both the B2B and the B2C worlds. And the obvious answer is not always the complete answer. For example, when a company's customers are the ones actually paying the bills, and the sales and marketing mission is to get them to buy as much as can be rationalized, plus some extra “just in case,” we cannot afford to overlook sales and marketing as an internal customer, whose needs and demands we must at least recognize.

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Supply Chain Cops (and Robbers): On Conflict Minerals Compliance in Secondary Industries

In a Sourcing Journal Online column that’s a must-read for any industry, Stephan Lamar, executive vice president at the American Apparel & Footwear Association (AAFA), frames the costs and hassle of conflict minerals legislation for the industry he represents. As he writes, “although [the legislation] was aimed at the electronics industry, which is a massive user of these materials, the broad reach of the regulation has ensnared our industry as well. For the past 18 months, U.S. footwear and apparel companies have spent thousands of dollars and hundreds of man hours in a desperate effort to come into compliance.”

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Has Supply Chain Policing Gone Too Far?

Is Dodd-Frank really necessary (and if it was wouldn’t it have been implemented yet)? Why do most of the most successful supplier diversity programs we can point to have little focus on adhering to requirements for government contracting and more on doing what is right by customers and growth market segments? And perhaps most serious of all, why does China care about REACH/ROHS and even clean energy when they can’t police their state-owned companies? Nor can they go after suppliers that these organizations purchase from for behavior that would be aberrant in more civilized countries – labor practices, counterfeit and often dangerous materials/substances, theft of IP and other trade secrets, and just about any other supply chain risk infraction you can point to in recent news headlines.

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The Love of Pulp — and How to Get the Wall Street Journal on the Cheap

- July 18, 2014 10:06 AM | Categories: Commentary, Travel

Man with newspaper on ordinary bench Living in the Atlanta area, I have a certain travel bias in favor of Delta – can’t be helped – so I rack up SkyMiles at a good clip. And here’s the trick – you use your miles to pay for the WSJ. Ok, so it’s not entirely free but comes pretty close. Delta has changed partners for this over the years. Right now it is a company called Newspaper Rewards, and the deal has only gotten better since I got my last subscription. I had to hand over 2,700 miles for about nine months (I think – I renewed back in July last year, but the copies keep coming…) of just the print edition. Now the deal is even better – pay 2,417 miles for 39 weeks of the print and electronic editions. And what's more -- having a newspaper subscription doubles as a weather forecast.

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Beware Ariba’s Patent Treasure Chest: Sourcing and eProcurement (Part 2)

This is the second in a multi-part series on Spend Matters Plus. Read Part 1 here.

As our exploration of Ariba’s extensive and deep patents continues, we turn our attention to three specific patents tied to sourcing and eProcurement. Ariba’s stash covers a broad range – and a good deal of provider companies in the market can't avoid being in violation. That said, to us, many patents appear to cover either features used prior to the filing date – prior art, as the legal term goes – or be overly broad or otherwise fairly trivial. However, if and when Ariba decides to release their legal hounds, a good number of companies will likely be dragged in. Some providers might have struck licensing deals, and for those with IP portfolios of their own there is always a mutual cross-licensing arrangement to be made. In this Spend Matters Plus research brief, Thomas Kase, VP of research, discusses the following Ariba patents: auction bid and visibility restrictions; eProcurement (“figuring out if your supplier is on the Internet”); and supplier connectivity.

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Procurement Provider Net Promoter Study

- July 17, 2014 11:11 AM | Categories: Analytics, Commentary, Procurement Research

We’re launching the first round of an ongoing “benchmark” survey that gauges procurement provider satisfaction scores for six different procurement process areas. In each, we measure importance, level of automation, currently selected vendors (as well as current/planned technology approaches), and of course the satisfaction score used to generated a promoter score. Depending on the answers to the questions, we also ask a few follow-on questions (e.g., what were the biggest reasons for low promoter scores) and finish off with some questions on major gaps with existing provider offerings (in addition to emerging technology areas). The first 100 qualified practitioners to participate get their choice of three incentives!

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Ariba the Avid Patent Collector: Analyzing Three That Should Keep Providers Up at Night

Patent Office Intellectual property rights and patents are great assets for many companies and procurement are at least partial stewards of them. They are often attractive assets of course (even from just a sales/marketing perspective), but they are sometimes open to legal disputes. In the case of procurement solutions, competing vendors have material legal exposure – in part because there are so many competitors in the sector that have filed for protections with the US Patent Office.

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Supply Chain Risk From an Insurance Provider’s Perspective: “The Shot Heard Round the World”

- July 15, 2014 10:26 AM | Categories: Commentary, Supply Chain Management, Supply Risk Management

I was recently at an analyst event for a software company and sat across the table at a breakfast with a technology researcher who covered the market for insurance companies. I asked the analyst, who had spent over 20 years in the industry, what it was like to look at solutions from an outsider’s perspective and what trends she sees as shaping the market. Almost on cue, the topic of discussion shifted from underwriting and claims management to that new topic of general procurement and finance interest: supply chain risk management. Given her generalist insurance background, I had no idea what to expect when I queried her on the subject, but what I heard back was as expert – or more – than anything I’ve heard from a non-insurance perspective.

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Beware Ariba’s Patent Treasure Chest: An Arsenal of Intellectual Property (Part 1)

Intellectual property rights and patents are big business. And they are, of course, also competitive tools for companies. Witness how many years ago Ariba derailed Emptoris – now part of IBM – as a competitor for a number of quarters and forced a sale of the company based on a patent dispute. But the patent is more than just a tool for vendors to bash competing vendors. They are sometimes open to legal disputes. To the average consumer, the recent Apple vs. Samsung lawsuit over cell phone design and operating system features is probably the most widely recognized legal mess. In May, an Oracle vs. Google dispute concluded with a win for Oracle, with award amounts unspecified (Oracle originally wanted $6 billion).

Patents are powerful tools in the procurement solution software market as well, not just for warding off competitors, but even for generating considerable “income” for the successful parties when push comes to shove. Within the procurement sector, Ariba has amassed an incredibly impressive array of patents (if measured by the yardstick, at least), covering what some might construe as many of the basic elements of the source-to-pay process, including supplier connectivity and collaboration. In Part 1 of this Spend Matters Plus research series, Thomas Kase (VP of Research) provides context for past patent litigation in the sector and begins to cover a number of Ariba’s patents that could affect competitors and customers of competitors down the line. This analysis will attempt to get beyond the legalese with layman’s interpretations of each patent.

Today’s research brief looks at the following three Ariba patents: “supplier/buyer network that provides catalog updates,” “system and method for conducting electronic auctions with multi-parameter optimal bidding,” and “maintenance of a company profile of a company associated with a supplier/buyer commerce network.” If this is a topic of interest to you and you're not a Spend Matters Plus subscriber, contact us to inquire about a free trial.

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Who Put The Supply In Supply Chain Management, and Why?

- July 14, 2014 2:27 AM | Categories: Commentary, Supply Management, Supply Networks

Spend Matters recently brought attention to that very question: Who put supply in supply chain networks? The question is a fair one, and yet it may lead to the follow-up question of how it is that this attention suddenly becomes necessary. Look, it is wonderful that the sourcing and procurement employees from the supply tent are peeking through the flaps of the supply chain management tent. The relationship between the two worlds has been reminiscent of members of Congress linking arms to sing “We Shall Overcome.”

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“Nicola Davidson” — A Recommendation for Harley to Partner With Elon Musk

- July 11, 2014 10:21 AM | Categories: Commentary, Friday Rant, Innovation

Here’s my suggestion for Harley, go partner up with Elon Musk (the founder of Tesla) and create a two-wheeled Tesla motorcycle. Call it the Nikola or perhaps the Nikola Davidson? The electric bike concept has merits, bikes are by and large pleasure vehicles that usually don’t need to a thousand-mile range – I’m sure a lot of people rarely travel farther than 50 miles from home – so electric could work. Ride it to work, charge up there, ride home, rinse and repeat.

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Purchases: Of Urban Pride and Prejudice

- July 11, 2014 2:26 AM | Categories: Commentary

pizza on pavement For many years, the Gay Pride Parade in the heat of the summer marked the culmination of this openness. People of various backgrounds and orientations could be seen cheering on the parade as it worked its way down the local street. Everyone was respectful (granted, there are some outfits – or lack thereof in certain spots – that I’d rather my children not see). But the respect extended to being respectful of the neighborhood, including cleaning up one’s beer cans and vodka bottles after the party. In recent years, however, the Pride parade has marked an opportunity for every manner of troublemaker to trash Lakeview, leaving garbage and pavement pizza (no, not the literal kind) for all to see and be nauseated by for days after the event.

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