Spend Matters is pleased to feature this guest post by Mickey North-Rizza, VP Strategic Solutions at BravoSolution. April 24, 2015, marks the release of the long-awaited Apple Watch. The hype around this new product is quickly gaining momentum and shipments are expected to reach 4.8 million units in Q1 and up to 9 million in Q2. These high projections could have some serious ramifications for the supply chain, especially since Quanta Computer is said to be the sole manufacturer of the watch. In light of these factors, significant supply and demand issues are expected.
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As the e-procurement sector has matured, industry- and category-specific innovation has left a significant amount to be desired. The vast majority of e-procurement and P2P solutions today are generic rather than specialized, leaving unmet needs in the market. As one example, mining, energy, oil & gas, utilities, chemicals, heavy equipment, construction and related sectors collectively spend tens of billions of dollars per year on maintaining existing facilities (let alone capital expenditure to build new ones), which are not addressed effectively by traditional e-procurement solutions in MRO and related areas. This Spend Matters research note shares some of the innovations that one decade-old name in the sector, jCatalog, is bringing to e-procurement through addressing complex MRO and plant/facility buying scenarios.
Supply Risk Management in Mexico: Tips and Analysis For Multinational Procurement Organizations [PRO]
Supply risk management continues to be an important topic of not just debate but practice, too, within global procurement organizations. And on a more frequent basis, supply risk management efforts are extending “south of the border” for North American companies, as manufacturers continue to emphasize a more prominent role for Mexico and Mexican suppliers in their global supply chains. In this Spend Matters PRO analysis, we explore how Mexican companies are managing supply chain risk. We also share survey results from a recent study in the region and provide tips and lessons learned for multinational procurement organizations that are increasingly sourcing and manufacturing in the region as well as general supply chain risk management best practices.
Innovation has become one of the very hottest of hot topics in procurement circles over the last couple of years. At the recent ProcureCon conference in Berlin, it was covered over several sessions, with a number of CPOs giving us the benefit of their views and experience around supplier innovation and how to capture it. Based on this wealth of input, what conclusions or thoughts can we draw from the 2 days of thinking and talking around the topic? Here are some key take-aways that CPOs and others might want to consider.
Supplier Relationship Management (SRM): there is probably no other solution set in supply chain these days that is sold in so many incarnations – it’s a wild list of acronyms: SM, SIM, SLM, SRM, VRM, SBM, 3PM, even VMS. Some are truly meaningless labels that mainly serve to please the marketing managers that had to choose one over the other – others carry more weight and imply certain functionalities. Let’s look at the acronyms.
SciQuest 14.2 Update Part 2: Total Supplier Management – Sophisticated Supplier Lifecycle Management Solution Renewed [PRO]
In Part 1, we looked at the new TSM (Total Supplier Manager) 14.2 release by SciQuest. Details included a Base TSM with extendible functionality on a core Java framework shared with the rest of SciQuest’s suite offering, which concludes the migration of AECsoft IP from the older .NET architecture to SciQuest’s core platform. Read on to hear more insights in Part 2.
SciQuest 14.2 Update: Total Supplier Management – Sophisticated Supplier Lifecycle Management Solution Renewed [PRO]
SciQuest has released version 14.2 of its Total Supplier Management (TSM) solution. The bulk of the high-end SLM (supplier lifecycle management) and SIM (supplier information management) intellectual property contained in its 14.2 TSM offering was originally obtained through the AECsoft acquisition nearly 4 years ago, and the AECsoft’s .NET architected solution has now been almost entirely moved over to SciQuest’s Java-based framework as well as received a solid UI/UX scrubbing. Hats off to SciQuest for accomplishing this.
50 Shades of Pay: Shade 3 – Total Cash Disbursements to Suppliers (with supplier details) Part 2 [Plus +]
This post continues our exploration into shade No. 3 of our 50 Shades of Pay series. In this PLUS post, Pierre Mitchell discusses what happens when you aggregate all your supplier master data alongside the aggregation of your spend transaction data. According to Pierre, you will find "wonderful things" like your supplier master field names will be called different things and suppliers will be classified in all sorts of dimensions by different groups. Read on to learn more.
50 Shades of Pay: Shade 3 – Total Cash Disbursements to Suppliers (With Supplier Details) Part 1 [Plus +]
In Shade 2 of this spend analysis series, we looked at analyzing total cash disbursements to suppliers through the lens of basic A/P data. In doing so, we touched on the issue of data quality, and in the particular, the data coming from the supplier master file (or vendor master if you use that terminology). Obviously, if the supplier master data is bad (i.e., dirty, sparse, duplicated, non-standardized, etc.), the spend data will show it. But, the highlighting of bad data isn’t about improving data hygiene unto itself, but rather is about fixing the data problem to highlight value creation opportunities that you didn't see before. The most frequent example of this is supplier master duplication where multiple supplier records exist for the same supplier.
When you find duplicate supplier master records, you can obviously begin to see where there is additional volume leverage that you can gain within strategic sourcing. This is a key capability for justifying the ROI of investing to get to this level of capability. However, spend analysis is not just about feeding the strategic sourcing process! When you find duplicate supplier master records for the same supplier, it can lead to a whole slew of root causes that should be addressed. This includes a lack of clarity/controls in the supplier master setup process (e.g., who can add/change/delete what fields in the supplier master file) or poor “supplier discovery” inquiry capabilities of suppliers from your own existing supplier network.
Up until now in this series, much of what we have talked about can be done on your own, albeit inefficiently, but in the area of data de-duplication, cleansing, enriching, auto-classification, and harmonization, the tools can really help. But, this area is also where supplier content providers of many forms can be used (i.e., content firms, MDM providers, supplier/business networks, analytics vendors, supplier management application providers, procurement suite providers, etc.). Such firms can also assist in the de-duplication of effort using a combination of fuzzy logic (pattern matching), proprietary databases, and rules-based analyzers to help with this key task.
In a previous Spend Matters post titled Does Increased DPO Actually Destroy Enterprise Value?, I highlighted some analysis where, in 12 of 14 manufacturing industries I analyzed, I found negative correlations between days payable outstanding (DPO) and enterprise performance (e.g., debt you may incur to raise cash to invest in high payback initiatives such as B2B trade financing where early payment discounts and/or supply chain finance programs are established). In this Spend Matters PRO article, I’ll dive into the industry details and also provide some additional insights based on some recent research that we conducted with the Institute for Supply Management (ISM).
Define Keelvar. Nope, it is not an Australian animal. Nor a tool used in advanced woodworking. Rather, it is a European company (headquartered in Ireland with an office in London) with a really clever approach to comparing and analyzing supplier responses – qualitative and quantitative.
This firm deserves a look whether you are just sending a survey to a group of suppliers (incumbent, hot prospects, cold calls, or mere phonebook leads) and you need to somehow assess their responses in a way that is better than a chaotic pass-the-spreadsheet around fashion, or if you go deep in analyzing the detailed breakdown of items, shipping lanes etc., while considering award impact on your existing suppliers (might not be wise to change spend and quantity too rapidly), as well as what you can do to drive more participation from local suppliers, reduce capital tied up in goods in transit etc.
Notice that I’ve avoided the O-word: optimization. This can and will scare many off. But it’s really nothing different than what you already do – likely much of it in your head if you’re an experienced buyer, and the category and items are relatively uncomplicated. In this Spend Matters PRO analysis, Thomas Kase, vice president, research, takes a closer look at Keelvar and how procurement organizations can begin to apply more advanced sourcing approaches to basic markets.
In Part 1 of this series, Peter Smith, managing director of Spend Matters UK/Europe, discussed the new Proxima graphic e-book titled "Drowning not waving – how Corporate Virtualization has got business leaders out of their depth... And where the real opportunities lie." Peter believes that the empowerment of the budget holder and business stakeholder, giving them a greater role in the overall procurement process, and the emergence of a consequent stronger commercial capability across the organisation, will be the most significant development in the procurement world over the next 10 years (in terms of strategy and organization at least). That of course will have some major implications for procurement functions and people - but it's a topic for another day. In this Spend Matters Plus research brief, Peter gives four reasons why he is confident in his prediction.