Catching Up With The Smart Cube – Part 2

Yesterday we outlined The Smart Cube’s developed proposition since we last spoke to them several years ago. Today, having spoken with co-founder Gautam Singh, we find out how they differentiate themselves.

So what makes them different?

We can see quite clearly that The Smart Cube doesn’t just create a piece of research or analysis for a firm. Its experts embed themselves and engage fully with the business for the duration, especially since client needs change with time – hence the long-term relationships.

Gautam confirmed this: “We may not be on the payroll,” he says, “but in every other way we are part of our clients’ business. We bring them insights and opportunities to help deliver value, from a specialism in understanding highly dynamic and global markets, using analytics and technology to bring skillsets and knowledge to complement and enhance in-house the procurement function.”

He gives us an example from the packaging market. “There’s a lot of innovation happening around that category at the moment, especially in terms of materials; using our patent research expertise, we identify early on the kinds of technology or innovation that is out there, the stage of evolution, who can deliver it, and what or who is having the biggest impact on cost structures. And because we understand our customer’s spend and internal contracts, we are able to offer recommendations on what to buy, the quantity, and the optimal strategy – because maybe we’ve identified a disrupter in the marketplace down the line. In the case that we identify an existing supplier of our customer as the disruptor, we can advise how they can best leverage that knowledge to positively affect price, through intelligence and tailored negotiation fact-packs.”

“Or if we look at commodity volatility, a key part of our management solution is to look at the raw materials, see what is highly impacting our customer’s cost structure, and therefore profitability, understand what is driving those commodity prices and produce a forecast. This enables procurement to better manage volatility, whether that be through helping finance from a hedging perspective, or using it in contract negotiations where that volatility, or risk if you like, is shared.”

Sometimes they might identify a commodity that is being disrupted by a new kind of demand – like nickel. The automotive sector is a relatively new market for it. Electric car manufacture is on the up, and so therefore is battery demand. So traditional demand for nickel is being impacted by a completely new industry, for which once it was of little consequence. Potential soaring prices and supply shortage is precisely the type of insight that clients rely on, in order to make evidence-based decisions.

That brings us to Risk

Identifying indicators of risk before they happen is what The Smart Cube centres its risk mitigation proposition on – there are of course many risk management solution providers, but Gautam believes they are different. “While some vendors base their risk factors primarily on financial accounts and historic data, we are more concerned with potential risks that might not yet be on the horizon – and critically this means identifying lead indicators.”

Their forecast analysis draws on the results of algorithms that trawl subscription news service APIs, databases and social media platforms, combined with supplier questionnaire responses, to look for signs of what the market is doing and how it is responding. They consider what both buyers and suppliers are talking about in terms of risk that might affect a given market, including CSR issues (modern slavery, sustainability, ethical sourcing), suppliers (financials, management and operational changes, M&A activity) and macro factors (country and environmental risks), or whatever is most critical to the customer – essentially to provide a 360° risk assessment.

“Our forecasting is highly analytical,” says Gautam, “we have built sophisticated models that allow our forecasting ability to become more and more accurate. It is predictive, so customers can focus on scenario planning.”

The firm is continuing to develop its capabilities and presence, especially in Europe; it has made its Romanian operation a centre of excellence for supply chain analytics and procurement technology, and is strengthening its investment to bring more value from the intelligence it can access in a highly regulated region. We will continue to keep an eye on the firm and any new developments.

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