The Category Intelligence (Direct) Category

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.

On the Future of Direct Procurement Tech: An Interview with Dan Willmer, VP Sales and Operations at Jaggaer

Today we present another installment from our ongoing series exploring where manufacturing procurement technology is headed. Produced in collaboration with our sister site MetalMiner, these interviews feature questions from Spend Matters Founder Jason Busch posed to multiple experts at technology vendors on topics such as the current direct procurement renaissance, the increasing centralization of procurement departments, the volatile commodity environment and more. The most recent interview, published earlier Tuesday on MetalMiner, features Dan Willmer, vice president of sales and operations at Jaggaer.

Merging Jaggaer and Pool4Tool: Strategy Analysis and Questions Customers Should Ask [PRO]

Jaggaer announced Monday it would merge with Pool4Tool. The combination raises a number of questions, primarily from a strategy perspective, beyond just providing expanded distribution to a niche provider and the validation of a new technology segment (manufacturing-centric procurement solutions) in North America. Rather, it raises the broader notion of whether a mutual fund-type holding company structure — regardless of capitalization structure — can help the fortunes of each “member” (and customers) beyond a certain point.

There's no question the two firms are better together than apart. Both “members” can immediately cross-sell and gain certain scale advantages. They can do this because of customer goodwill and the ability to get in the door and deliver. No doubt the professionalism that a private equity-held software firm brings, along with professional services know-how and reach to drive sales and implementations, will be key contributors to initial momentum as well. Jaggaer brings these two areas to Pool4Tool — and then some. But this only goes so far.

Longer term, real technology integration models, including a supplier network and platform-as-a-service (PaaS) strategy, need to be spelled out. While our colleague Tom Finn appreciated Jaggaer and Pool4Tool’s honesty around the topic of integration, strategically, to maximize customer (and likely shareholder) value, our esteemed colleague may not be right. Which brings us to the strategic technology questions Jaggaer and Pool4Tool should be asking as well as those which customers and prospective should zero in on as well.

Jaggaer-Pool4Tool Merger Analysis: Customer Recommendations [PRO]

manufacturing

Jaggaer announced earlier Monday it would merge with Pool4Tool, a Europe-based provider of direct materials procurement solutions. This Spend Matters PRO research brief provides customer recommendations, primarily for organizations already using or considering using Pool4Tool, especially in North America. It also provides insight into commercial, technology and deployment and support considerations surrounding the combination of the two providers, as well as select alternative providers in some of the markets in which Pool4Tool competes.

Jaggaer’s Merger with Pool4Tool: Taking the Contrarian Role Around Integration

contrarian

Jaggaer’s merger with Pool4Tool creates a combined entity approaching $100 million in annual revenues spread across nearly 1,000 customers. That would mean about $100,000 per customer per year, which clearly has a nice ring to it. After going public as SciQuest, then private and then public again before being acquired by Accel-KKR, in May 2016, for $509 million, Jaggaer’s capitalization history is unusual. Throughout that time, the company has made numerous acquisitions that nicely cover the breadth of the source-to-pay (S2P) application space. But it has never promoted itself as a soon-to-be-finished integrated platform — no such vapor.

Jaggaer and Pool4Tool to Merge: The Start of a Trend in Direct Materials Solutions

Jaggaer and Pool4Tool announced Monday the two providers would merge, revealing what was probably one of the better known procurement and supply chain industry secrets in recent memory. The combination creates the only technology provider in the market with end-to-end indirect and direct materials procurement coverage, the companies said in a press release.

Navigating Uncertainty: Pool4Tool’s Roger Blumberg on Where Manufacturing Procurement Technology is Headed

Toyota supply chain

Last week we featured a new interview series focused on the technology renaissance coming to direct materials procurement. In collaboration with our sister site MetalMiner, Spend Matters Founder Jason Busch questioned procurement technology leaders and experts on the reasons this renaissance has begun, as well as how procurement and supply chain professionals are using technology to navigate volatile global trade trends. This interview features Roger Blumberg, chief commercial officer at Pool4Tool, which works with leading manufacturers such as Miele, Swiss Steel and Tower Automotive.

Where is Manufacturing Procurement Technology Headed? An Interview with Keith Baranowski, Global Vice President and GM, Direct Materials Sourcing, SAP Ariba

manufacturing

Our sister site MetalMiner recently started a series of interviews with a range of experts at technology vendors. This interview features Keith Baranowski, global vice president and GM, Direct Materials Sourcing, SAP Ariba, which works with leading manufacturers such as Ford, Microsoft and Johnson & Johnson.

Where Manufacturing Procurement Technology is Headed: A New Interview Series

manufacturing

Why have procurement technology vendors initiated a “direct procurement” renaissance, and what changes within manufacturers have started to make this possible? This line of questioning forms the backbone of a new interview series over on our sister site MetalMiner, in which Spend Matters Founder Jason Busch questions multiple experts at technology vendors on these and related topics.

POOL4TOOL: Solution Review & Analysis [Plus+]

manufacturing

The market for direct materials-centric procurement technology is just beginning to take off in North America (and other parts of the world, outside of Europe). Especially in the US, these solutions have often played "second fiddle" for procurement organizations, especially compared with investments in indirect procurement suites and services procurement capabilities. Yet POOL4TOOL is one of only a handful of technology vendors developing specialized procurement solutions to support manufacturing environments. The Vienna-based procurement solution provider has extensive experience working with industrial firms (e.g., automotive, A&D, diversified manufacturing) across the source-to-pay continuum, especially in support of direct materials procurement activities.This Spend Matters Plus analysis provides an introduction to the POOL4TOOL solution for procurement organizations looking to understand whether they should consider adding the provider to their shortlists for consideration and competitive alternatives.

Energy M&A Outlook: What the Halliburton-Baker Hughes Fail Tells Us About 2017

oil

In Part 1 of our latest energy, mining and utilities outlook, we focused on the precipitous drop in this sector’s M&A activity, outlining exactly how many billions of dollars are at stake. Let's now take a look at 2016's biggest M&A deals — including the failed Halliburton-Baker Hughes marriage — as well as a look ahead to 2017 and the unknowns facing the EMU sector.