The Category Intelligence (Direct) Category

Former Boeing VP John Byrne on How the OEM Optimized its Direct Materials Supply Chain Visibility

MRO

If you’re a direct materials procurement professional, what would force you to change the way you do business? For John Byrne, former vice president of aircraft materials/structures at Boeing, it was nothing short of a supply chain emergency. “The situation we faced at Boeing was initially borne out of a situation driven by a crisis,” Byrne said in the recent webinar “Supercharge Your Approach: Managing Direct Materials Across Global Supply Chains,” hosted by our sister site, MetalMiner.

Behind the Scenes: Interpreting Q4 2017 SolutionMap Results With Jason Busch — Jaggaer (and Jaggaer Direct) [PRO]

Today I’m wrapping up my series of observations on Q4 2017 SolutionMap suite providers with perhaps the most fun vendor of all to opine on beyond the data alone: Jaggaer. (Be sure to check out the previous installments covering SAP Ariba, Basware and CoupaDetermine, GEP and Ivalua; and BravoSolution and Zycus, too.) When I think of potential — using the truest sense of the word — in the procurement technology market, there is no provider more underutilized than Jaggaer, especially in scenarios where it can serve industry segments and geographies that have not previously embraced solutions designed for them. Below I share my thoughts on this opportunity and how Jaggaer did in the Q4 2017 SolutionMaps, with maybe a few Jägerbomb(shells) tossed down the thirsty Friday throat for good measure. Whether your mixer is a Red Bull or Heineken, sit back and enjoy.

LevaData Brings Cognitive Sourcing Closer to Reality with Release of AI Advisor Leva

Next-generation sourcing upstart LevaData debuted at its customer event Thursday an artificial intelligence (AI) advisor for procurement, positioning itself as one of the first providers to offer live technology that enables cognitive sourcing. Called Leva, the new solution ingests both historical business data and external market intelligence to provide real-time recommendations to procurement users ranging from optimal times to resource a category to personalized supplier negotiation strategies.

New Research: Supply Chain Risks Lurking Behind the Electric Vehicle Boom

Fourteen countries (including the U.S., believe it or not) have joined the Electric Vehicle Initiative, aiming for battery-powered cars, trucks and buses to reach 30% market share by 2030. According to IEA calculations, we would need 600 million electric vehicles globally by 2040 in order to reach the global warming target set by the Paris Agreement. A new report from risk analysis firm Verisk Maplecroft, however, shows that the electric vehicle supply chain is far from devoid of social and even environmental risks. It largely comes down to the raw materials needed for electric vehicles, such as aluminum, cobalt, mica and rubber.

Commodity Price Risk Management: For the Many, Not the Few

Spend Matters welcomes this guest post from Tom Lawrence, director at Flow&Ebb. 

Commodity markets affect us all. Wild swings in commodity prices affect how much we pay for groceries, how much we pay for aluminum cans for our organic soda, how much we pay for electricity. Yet traditionally only large businesses had the budgets to pay for, and enough clout to embed, commodity price risk management into their supply management strategy.

Game Theory: Changing the Way You Think About Commodities

Spend Matters welcomes this guest post from Nick Peksa, opportunities director at Mintec.

In 2014, we published an article on chaos theory, and as a continuation of this, I thought it would be interesting to introduce the concept of game theory and how you can use it to support your commodity price decisions. Game theory brings together the concept of competition and cooperation in business.

LevaData: Vendor Snapshot (Part 3) — Competitive and Summary Analysis [PRO]

SciQuest

LevaData is a provider that challenges the traditional notion of “modules” in the procurement technology sector. In combining supply chain visibility, market data and benchmarks, community analytics, optimization, forecasting, AI techniques and strategic sourcing capability, LevaData is positioning itself as the first “cognitive sourcing” provider. While focused primarily today on select industries and categories, its goal is to become both a single source of truth and core enablement technology for broader direct materials sourcing. Today, LevaData’s solution blends integrated market intelligence, analytics and sourcing components in a single platform, primarily serving customers in the electronics/high tech manufacturing sector. While more mature in certain areas and less in others, the combined product set is not like anything else we have seen or analyzed in the market.

This final installment of our multipart Spend Matters PRO Vendor Snapshot series covering LevaData offers a SWOT analysis, competitive assessment and comparison with other related vendors targeting direct materials procurement. It also includes a user selection guide and summary evaluation and selection considerations. Part 1 and Part 2 of this PRO research series provide a company and deep-dive solution overview, product strengths and weaknesses and a recommended fit analysis for what types of organizations should consider LevaData.

LevaData: Vendor Snapshot (Part 2) — Product Strengths and Weaknesses [PRO]

Quick, what would a mashup of an analytics, market intelligence and an optimization-backed advanced sourcing platform look like for direct materials procurement? It would need to feature at least the basics of line-level spend analytics and reporting, and, for manufacturers, ideally offer deeper bill of materials insight into sub-tier materials, parts and component data. It would have to provide market-based insights into relative total cost, as well as integrated access to external market data feeds to enable benchmarking. And it would need to feature sourcing capability that factors into account both internal and supply chain costs, constraints and business requirements in recommendations and decision-making.

In other words, it would look something like LevaData, a manufacturing-centric procurement technology vendor that offers an integrated set of capabilities that is different from anything else we have reviewed in the market. This Spend Matters PRO Vendor Snapshot explores LevaData’s strengths and weaknesses, providing facts and expert analysis to help procurement organizations decide whether they should consider the provider. The first installment of our analysis provided a company and solution overview and a recommend fit list of criteria for firms considering the provider. Part 3 will offer a SWOT analysis, user selection guide, competitive alternatives, and additional evaluation and selection considerations.

LevaData: Vendor Snapshot (Part 1) — Background and Solution Overview [PRO]

Outside of core ERP and supply chain planning systems, the technology market for direct materials procurement and sourcing is almost too nascent to even be considered fragmented. While many software firms claim they power direct materials procurement solutions needs, the reality is that most end up “kludging” off-the-shelf solutions based on existing, distinct modules for manufacturing. Yet new direct materials solutions are emerging that blur the line of modules, product classification and underlying technology in a not so dissimilar way that the adoption of their solutions also blurs the line from a user perspective between design engineering, procurement, quality and operations and supply chain.  

LevaData is one such emerging technology provider that has capability spanning direct materials procurement and cost analytics, bill of materials-level spend visibility, market/commodity intelligence and sourcing (optimization). It is one of the first entrants into the “cognitive sourcing” space, offering a platform that leverages artificial intelligence (AI) capability to make both part- and component-level sourcing recommendations, especially in the electronics industry, where LevaData has a statistically relevant number of customers and products in its database. Having recently raised $5 million in Series A funding in August 2017, LevaData appears ready to move beyond its initial 20 customers.

This Spend Matters PRO Vendor Snapshot provides facts and expert analysis to help procurement organizations make informed decisions about LevaData’s solution offering. Part 1 of our analysis provides a company background and detailed solution overview, as well as a summary recommended fit suggestion for when organizations should consider LevaData in the procurement technology area. The rest of this research brief covers product strengths and weaknesses, competitor and SWOT analyses, and evaluation and selection considerations.

What Dodd-Frank Repeal? Companies Continue to File Conflict Minerals Disclosures

conflict minerals

The fate of the Dodd-Frank Act — including whether U.S. companies will still be required to trace their conflict minerals — may be up in the air, but many of them are nevertheless conducting audits and filing conflict minerals reports as before. In April, the acting chairman of the Securities and Exchange Commission (SEC) came out against enforcing Dodd-Frank Section 1502, which required companies to trace the origins of any tin, tungsten, tantalum or gold (3TG) used in their products and disclose whether these conflict minerals have been sourced from the Democratic Republic of Congo (DRC).

Supply Dynamics: Vendor Snapshot (Part 3) — Summary & Competitive Analysis [PRO]

Spend analysis providers that tackled the “hard stuff” originally offered line-level visibility into buying activity based on invoice data. Such capability has now become standard. But what if you could go beyond line-level visibility when it comes to understanding spend data? And what if you could do this for supplier spending, as well?

For the majority of direct materials spend in manufacturing, nearly all approaches to analytics come up short when it comes to gaining insight into the underlying materials, spend and suppliers used for semifinished materials, parts, components, assemblies and finished products, either directly by the buying organization or passed-through based on supplier purchases. This lack of visibility not only increases both supply and commodity price risk but also stands in the way of driving innovative sourcing strategies that can drive hard dollar savings.

Yet one provider thinks they have the answer to this challenge: Supply Dynamics. Supply Dynamics combines its own form of spend classification, enrichment and front-end analytics based not just on information contained in ERP/MRP data but also on engineering drawing and bill of material information, using both data and metadata it extracts from design drawings. It also provides out-of-the-box capabilities to create material demand aggregation programs for metals, plastics, electronics and other sub-components (but that’s only one “savings” lever it brings, as we explore in this review).

This third and final installment of our Spend Matters Vendor Snapshot covering Supply Dynamics provides an objective SWOT analysis of the provider and offers a competitive segmentation analysis and comparison. It also includes recommended shortlist candidates as alternative vendors to Supply Dynamics, and offers provider selection guidance. Finally, it provides summary analysis and recommendations for companies considering Supply Dynamics. Previous installments provide an in-depth look at Supply Dynamics as a firm and its specific solution capability and a detailed analysis of solution strengths and weaknesses, as well as a review of the product’s user experience.

Supply Dynamics: Vendor Snapshot (Part 2) — Product Strengths & Weaknesses [PRO]

manufacturing

One of the major gaps today between supply chain planning and collaboration solutions and direct materials procurement technologies is the lack of spend/supply visibility for raw and semifinished materials used at different stages in the supply chain. These materials include commodities such as metals, resins, electronic components, chemicals and standard parts purchased by suppliers such as fasteners.

Granted, manufacturers are getting better at SKU-level demand planning and forecasting on both and inbound and outbound levels, not to mention managing all of the logistics associated with moving goods and materials. This is the basic “feeds and speeds” of the supply chain. Manufacturers also more frequently gaining visibility and orchestrating controls and processes around overall “spend” at the line item and supplier level, but this is only historical “spent analysis” of material consumption within their own four walls. Few companies have a true bill of material- and design drawing-level understanding of what upstream materials they’re buying vis-a-vie their suppliers. In other words, the lack of visibility into their suppliers’ spend and underlying costs prevents them from uncovering cost savings opportunities that are hidden upstream in their supply chains.

This is precisely where Supply Dynamics, a provider that specializes in multitier direct materials procurement, proposes to fill an important analytics and solutions gap through its SDX platform. It’s an area that even direct materials procurement technology specialists such as Jaggaer/Pool4Tool and SAP Ariba, with their new solution releases, do not begin to address effectively.

This Spend Matters PRO Vendor Snapshot explores Supply Dynamics’ strengths and weaknesses, providing facts and expert analysis to help procurement organizations decide whether they should consider the firm. Part 1 of our analysis provided a company and detailed solution overview, as well as a recommend fit list of criteria for firms considering Supply Dynamics. The third part of this series will offer a SWOT analysis, user selection guide, competitive alternatives and additional evaluation and selection considerations.