The Supplier Management Category

Supplier Performance Management (SPM) — Lost and Found?

What if a network of suppliers responded even more favorably to a customer that persistently and artfully manages them? Almost all of the analysts who cover the supplier performance management (SPM) solution market agree there is an incremental 5%–15% in contract savings for those who do it well (i.e., for buying organizations that apply a continuous improvement discipline to their SPM practice). Those are big numbers. So why would it appear that outside of the automotive industry, sophisticated SPM practice hasn’t caught on?

How to Smooth Manufacturer-Supplier Relationships Through AP Automation

Spend Matters welcomes this guest post from Howie Hahn, senior sales engineer at Esker.

Success in manufacturing depends on the mutually beneficial relationships between manufacturers and suppliers. Each party relies on the other to live up to its obligations, if either expects to move towards long-term success and growth. But business, like life, doesn’t always go as planned. Even relationships based on trust and mutual benefit can get rocky.

The key is to make sure that the inevitable bumps in the road don’t morph into ill feelings, mistrust or, worse, lawsuits. One tool that can help ensure that manufacturers and suppliers maintain smooth relationships is accounts payable (AP) automation.

Commodity Management: Drilling into the Supply Chain and the Technology Landscape [Plus+]

My colleague Jason Busch and I have written earlier about how, with the exception of a few top procurement organizations, procurement is failing to deploy the right sets of strategies, tools and tactics to bridge commodity management, sourcing and broader procurement activity.

In this Spend Matters Plus article, I want to dive into some of the details around commodity management and its relation to the broader supply chain, as well as the different solution approaches being used to tackle it. In a value-chain mega chart in the article (which basically follows a design > source > plan [supply] > deliver [inbound] process flow from left to right), I’ve outlined the various processes (brown rectangles) and some supporting solution types (blue ovals) for commodity management.

The Benefits of Treating Your Suppliers Like Partners

Spend Matters welcomes this guest post from James Gellert, chief executive of RapidRatings.

Suppliers and buyers haven’t always had the best relationship beyond the transaction. Historically, the relationship was focused on getting the lowest price and reliable delivery. While this made sense on paper, it inevitably created a zero-sum game, as suppliers were often seen as expendable. Suppliers knew they could be replaced at any time and therefore had little interest in being flexible or working in the purchaser’s best interest.

While many companies have since rethought this Draconian approach and have been successful in creating overall value beyond the transaction, those companies that have truly realized the benefits of treating suppliers like partners are able to transform themselves into a more focused, nimble and cost-effective global competitor.

The Impending Slow Death of “Empty Apps” in Procurement (Part 2)

In Part 1 of this series, I discussed how “empty” applications (i.e., data models and application logic served up via forms and workflow) that need to be spun up from scratch by each customer, and offer no scale across customers, are not going to be competitive in a few years.

For example, most buying organizations pursuing automated supplier qualification workflows in supplier management end up creating mega qualification forms that represent the sum of the regulatory requirements and internal requirements that are in force rather than the supplier questionnaires getting automatically tailored based on the spend requirements that in turn link to the appropriate questions based on appropriate internal/external policies and regulations.

But this is starting to change. New applications and application suites that offer mass personalized functionality in terms of flexible data models, metadata, machine learning and “composite applications” (that embed relevant microservices) will offer huge advantages over traditional software models that basically treat the applications like machine tools (even though the tools are deployed over the web).

I will give a few more examples of embedded services and then turn your attention to some other approaches that applications providers are pursuing to move away from feature function wars and move towards building a collective intelligence on behalf of their procurement customers. This changes the game to build new capabilities beyond automation and to deliver outcomes beyond savings.

In the last installment, I talked about DaaS (data as a service) and embedding microservices into the applications so that “micro best of breed” app services can be embedded into the core processes of large application suites. In fact, it’s already happening. I mentioned digital signatures for contracts and APIs for supplier risk queries, but there are other opportunities! In this installment, I call out providers like SAP Ariba, Amazon Business, Okta, Tradeshift, Slack, Microsoft and Aquiire, but the lessons are what is important. OK, let’s get on with it with our list of services to augment the empty apps.

2 Strategic Ways to Improve Supplier Relationship Management

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Spend Matters welcomes this guest post from Dr. Muddassir Ahmed, divisional supply chain manager at Eaton.

Whether we like it or not, whether we want to say that out loud or not, buyers and suppliers primarily indulge in exchange relationships in order to satisfy their desire for money and to benefit their businesses or organizations. So when buyers and suppliers think about supplier relationship management or ways in which they conduct exchange relationships, they must focus on a share of value appropriated by both sides in the relationship.

Outsourcing Flights: Was the United Airlines Fiasco Also a Supplier Management Mishap?

People have pointed fingers at United for pulling passengers off after they have boarded; at the security officers who didn’t think it inappropriate to drag a 69-year-old man by his hands; at the passenger himself for not complying with airline policy — but who reads those policies when booking tickets, anyway? But our question is this: How much of the blame also goes to Republic Airline, the regional partner that operated the flight?

Why Supplier Value Management, and Why Now? (Part 1): The Top 3 Areas to Focus On

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Spend Matters welcomes this guest post from Bill King, customer account director at BravoSolution. 

In a world of uncertainty, struggles to hit your numbers and declining savings for sourcing events, it’s time to try something different. Well, it’s not that different. The practice has been around for over a decade. Most companies, however, haven’t quite yet embraced supplier value management (SVM) as a strategy to increase savings, reduce cost and build supplier relationships.

PRGX: Vendor Snapshot Part 1 — Background & Solution Overview [PRO]

For those that do not know it, PRGX would appear to be one of a select number of dominant services provider in the niche market for recovery audit services — a market that unlike other procurement services faces tremendous price pressure for its core recovery, statement and related auditing and profit recovery services. But PRGX has started to remake itself quietly from within — out of necessity, given these broader market trends — building and acquiring technology capabilities in the spend analytics and supplier management areas, both to expand its relevance and to start driving automation and scale in its core business.

Its recent acquisition of Lavante, a supplier management provider with best-in-class supplier information management (SIM) and master data management (MDM) capabilities, showcases the direction PRGX is taking as it migrates from an audit-driven services firm to a new type of savings and recovery “as-a-service” solutions provider. It brings particular competence in extending core spend analytics to payment and product (SKU) analyses, the latter of which is particularly relevant to its core retail client base (from its recovery audit business).

This Spend Matters PRO Vendor Snapshot provides facts and expert analysis to help procurement organizations make informed decisions about PRGX and whether its technology and solution capabilities are a fit for their needs (it does not provide a review of PRGX’s core recovery audit services capability). 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 PRGX in the procurement technology and solutions area. The remaining parts of this research brief will cover product strengths and weaknesses, competitor and SWOT analyses, and insider evaluation and selection considerations.

Key Procurement Software Trends for S2P, Contract Management: Still Time to Register

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The case study results are in. The University of Chicago Medicine (UCM) deployed a source-to-pay (S2P) contract management technology platform to address their non-labor expenditure reductions. Spend Matters' Xavier Olivera will join the discussion to address the key procurement software trends within the S2P landscape. This webinar will take place March 8th, at 1 p.m. CST, and is sponsored by Ivalua.

ICYMI: Trends and Predictions in Sourcing, Supplier Management, CLM and More

For those of you who missed it, last week Spend Matters Founder Jason Busch presented a webinar live from the U.K., with Spend Matter UK/Europe Managing Director Peter Smith some 50 feet away, doing another webinar live. “It’s the first time we’ve had two analysts in the same building doing a webinar at the same time,” Busch said. Busch’s webinar, Sourcing, Contract and Supplier Management: Predictions and 2017 Tech Trends, looked at four areas within the strategic procurement technologies landscape — spend/supply analytics, strategic sourcing (e-sourcing), supplier management and contract management.

4 Reasons Why Supplier Scorecards Don’t Work

Spend Matters welcomes this guest post from Andy Kohm, CEO and founder of VendOp.

When I think of supplier scorecards, I think of having to be prodded, reminded and occasionally begged to carve out a large chunk of my time to fill out question after question on suppliers I’ve used since who knows when. I cringe when I see the first email comes in knowing that more are to follow. In theory, scorecards are perfectly sound tools to measure the effectiveness of key business relationships. But in reality, they’re hideous instruments for the collection of insight into supplier relationships. Let’s examine why.