Trade Extensions – business is good for advanced sourcing experts

We’re continuing to feature some of the recent financial and business results announced by leading procurement software firms. Whilst we do some coverage here, if you are interested in more detailed analysis of the firms or of their products,  really I would investigate our sister site, Spend Matters US.

Particularly now we have our new aggregation website Spend Matters Network, it’s easy to check what we’re writing about on our various sites, search for previous articles and access the wealth of research material available, containing some brilliant stuff around vendors and software products of interest to procurement professionals. And of course we have PRO, our subscription site, where you’ll find THE most incisive analysis anywhere in the market.

But anyway, let’s look today at Trade Extensions.  They’re one of the most advanced firms in terms of what we call “market informed sourcing” – using mathematical algorithms to “optimise” the supply alternatives proposed by potential suppliers. It’s usually used for complex, large scale, multi-criteria or variable sourcing tasks.

Trade Extensions was formed by brilliant mathematicians at Uppsala University in Sweden, and their product is as advanced as any on the market. The commercial side of the firm is headquartered in the UK, and they’ve just announced very strong results for 2012. They’re privately owned so don’t have to tell us everything, but what they have is certainly impressive.

Their revenues grew by 19% in 2012 – we believe they’re in the £5-10M pa revenue bracket - with “increased profits” (although they don’t say what those are). Number of customers is up 12% and sales per customer up 6%. As we’ve commented before, they are unusual for a fairly small firm in that their customers tend to be huge, very top tier firms, particularly in retail, food & drink and similar industries.

The USA experienced a 33% increase in sales – and as that’s their largest market, does that suggest that Europe perhaps was pretty flat, looking at the overall figure? Perhaps not surprising given the economic situation. But within their revenues  ”an increasing proportion (is) coming from other regions”.

Two aspects suggest that the best is yet to come. Sales for the first quarter of 2013 are running at 40% above last year – a stellar start to 2013.  And, as we’ve also mentioned before, they’re developing uses for their platform that go ‘Beyond Sourcing’.  As they say:

“Beyond Sourcing projects utilise the platform’s flexibility and analytical capabilities that mean it can be configured to model and optimise practically any resource allocation problem.  During 2012 the platform was used to run projects including supply chain design and production planning and it is predicted that ‘Beyond Sourcing’ projects will become more commonplace in the coming months and years”.

We featured a production planning case here, and they’ve got other very interesting projects where, for instance, they are optimising supply chains based on risk analysis around supplier locations as well as price and other more conventional selection criteria. It all needs very clever software – and the people who can make it work of course – and that’s really Trade Extensions’ strength.

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