Monthly Archives: September 2006

Apexon and Performance Visibility

I’ve been blogging a lot about visibility lately and mentioning Apexon rather frequently even though I’m sure most of you haven’t heard about this little company or what they do. Last week I had the opportunity to sit down with Kevin Brooks (an occasional guest blogger here on Sourcing Innovation, in other words, his commentary on The Future of Sourcing is not slated to be his last post) and discuss where Apexon was, where it was going, how Apexon goes beyond spend visibility to performance visibility, and how this will eventually translate into actionable intelligence. (A topic I’ll be diving into in the future.)

Whereas most visibility solution providers (like Zycus, Procuri TrueSource, and biq) focus on spend visibility, or the determination of how much you spend on each of your suppliers, Apexon focuses on performance visibility, or the determination of how each supplier you are spending on is performing. Spend visibility solutions slice and dice on dollars, performance visibility solutions slice and dice on performance metrics – and the good ones slice and dice on the performance metrics of your choosing .

At this point, you’re probably asking are not all visibility providers equal, since all they do is aggregate, slice, and dice raw data ? Technically, they are very similar, but functionally they are quite distinct. The difference lies in the presentation, reporting, and intelligence they provide. Spend visibility solutions are configured to slice and dice on dollars, the data they extract from your underlying systems is your transactional data, and the drill down reports they provide are all pivoted around spend. Performance visibility solutions are custom configured by you to slice and dice on the metrics you track, the data they extract is the data relevant to your metrics, and the drill down reports they provide are all pivoted around metrics. Could one system do both? Yes. Do any current systems do both well? In my view, not really. (But I’m up for a conversation and a demo if anyone disagrees with me! Remember, its thedoctor<at>sourcinginnovation<dot>com.)

However, to truly be useful to you, a system should also provide actionable intelligence. Dashboards that tell you where you are performing well, where you are performing poorly, and provide you with alternatives to improve these poor situations. Although still a young product, with 2.5 slated for release in the near future, this is where Apexon is starting to break away from the pack. Dashboards let you view your performance relative to your key metrics, and then the system lets you drill down into the root causes of poor performance and the root enablers of good performance. Comparison reports can then be used to determine possible solutions – such as shifting supply to a better performing supplier or shifting certain components to different manufacturing lines.

If supply chain performance is a concern for you, and it should be, I’d say it’s worth checking out the solution, especially if you are a traditional manufacturer, particularly in the automotive, aerospace, defense sectors, since Apexon has a strong client base in these sectors that have helped shape the solution since day one. Furthermore, since the solution is a 100% on-demand solution through your browser, the effort required to test-drive it is minimal. The solution works on a push model – at regular intervals (which can occur as frequently or infrequently as you desire), you push updated data to it, and it slices and dices that data on your metrics to give you the intelligence you need to improve your operations.

Is it all it can be? No, I think it can improve in future versions – but more importantly, since Apexon is intent on building its roadmap from customer feedback, I think it will get there. More importantly, you don’t have a lot of choices, most are new offerings, some companies are not as eager to work with their customers to improve the solution, and visibility is an area you can not ignore. Make sure it’s on your list of candidates, and if you’re nearby, check them out at one of their upcoming executive breakfast series in Milwaukee, Chicago, and Detroit (on October 17, 18, and 19). And keep an eye on Sourcing Innovation and Spend Matters – if he’s not traveling, I’d guess that you can bank on Jason hiding out in the back row of the windy city presentation, pounding out notes on his Dell and posting them to you hot off the wire.

It’s a Green World … Unless You Live in the United States

As you know, at least once a month, I like to talk about green – green suppliers, green strategies, green best practices, and any other green you can think of that benefits your business as well as the environment. And I’m not alone. This also appears to be a favorite topic of David Bush’s over on eSourcingForum (see Will Kermit Change His Tune?, for example) and of Tim Minahan’s over on Supply Excellence (see It Ain’t Easy Being Green: Ethanol Hopes and Woes, for example).

Today I’m going to talk not about how going green is going to help you, but how not going green is going to hurt you. Whereas the United States has decided not to ratify the Kyoto Treaty, the rest of the world appears to be embracing it not only as a requirement, but as a way of doing business.

For example, the EU is trying to stimulate green public procurement for its own institutions and governments. See a recent article on EurActiv.com aptly entitled Green Procurement. Japan’s DENSO Corporation recently announced New Green Procurement Guidelines for Suppliers based on DENSO’s long-term environmental policy. The Recycling Council of Alberta Business Development Committee is preparing to sponsor research on green procurement to help Canadian companies find information on green products, services, and existing green procurement policies in Canada. Even Australia, after a recent Green Procurement Audit has realized the need for a sustainability charter to drive ecologically sustainable practices.

In other words, if you’re not green, you could find yourselves with significantly fewer customers in the near future.

On the green front, I’ve collected quite a few articles of interest over the last month.

Via Technologies, a Taiwanese manufacturer of motherboards and chips, has developed a processor, the VIA C7-D, that consumes a mere 20 watts. Now, it’s true that processors do not produce CO2, but the electricity they run on is often produced by methods that do produce CO2. By decreasing processing power requirements, and by contributing to reforestation efforts to counteract the small amount of carbon dioxide that will be produced in the production of the electricity required to power the chip, as calculated by carbon footprint, Via Technologies has taken another step towards making computing greener.

Cellex Power, General Hydrogen, and Ballard have teamed up to produce The hydrogen powered fork lift that runs on hydrogen rather than lead acid batteries. As the article says, it’s not glamorous … but considering how many forklifts there are out there, it’s significant.

Florida is building a $425 million facility that will use lightning-like plasma arcs to turn trash into gas and rock-like material. The gas will be used to run turbines and produce electricity, of which a third will be used to sustain the plant and the rest will be put back on the grid, and the material that results from the melted organic matter will be hardened into slag and used in road and construction projects.

Carbon Fiber, five times stronger and two times as stiff as steel, despite being lighter than steel, is now being used by a number of major manufacturers, including BMW. This allows for a significant increase in fuel efficiency in vehicles that require conventional fuel.

Germany recently dedicated the Gut Erlasse Solar Park, a 12-megawatt facility located near the Bavarian town of Arnstein that holds the distinction of the World’s Largest Solar Power Plant.

A number of fiber and fabric firms are launching green products, as described in this recent Apparel Magazine article. For example, Unifi has launched a polyester yarn made of 100% recycled materials, DuPont Sorona has undertaken an initiative to insure that at least 25% of its revenues come from products made of non-depletable resources, and Sole Custom Footbeds is using corn-based material in its NatureWorks PLA plastic packaging which will decompose naturally with no negative environmental impact.

Finally, GE and mtvU are sponsoring the Ecomagination Challenge where they are asking individuals and teams of college students from around the country to submit innovative, groundbreaking ideas for projects that would make their schools more environmentally responsible. The school with the best idea gets a 25K grant to bring the plan to life as well as an mtvU concert on campus.

The Talent Series II: Attracting and Maintaining Great Talent

This week, a number of bloggers responded to my suggestion and offered up some great posts on closing the talent gap. Tim wrote a great post on Attracting Great Talent the Jack Welch Way, Doug reminded us of Five Leadership Behaviors Correlated to Performance, Matthew responded to my post with his own on Procurement Succession Planning and then came up with an idea to take the cross-blog discussion to the next level by soliciting posts on A Day in the Life of a Buyer.

Tim summarized some great simple, straight-forward advice from Jack Welch. The best way to attract great talent is to be a preferred employer. He offered a simple summary of Welch’s tips for becoming a preferred employer, which are:

  • demonstrate a real commitment to continuous learning
  • establish a meritocracy
  • allow, and encourage, people to take risks
  • be societally cognizant
  • focus on high standards
  • be profitable and growing

Doug reminded us of a recent study at Harvard business School that identified five leadership behaviours that are correlated with increased motivation, creativity and performance of team members. After all, no point attracting the best talent if you are not going to foster it. Briefly, leaders support people, monitor work in a positive way, recognize people for good performance, and consult with the team. The fifth? Check out Doug’s post or the Harvard study.

Matthew offered his thoughts on why succession planning almost never happens. In addition to finding the topic unpleasant, most people in the corporate food chain assume that either the person is planning on leaving or using the discussion as a back-door to state that he or she feels it is past time for a promotion. However, as Matthew points out, without proper succession planning, there is a general sense of chaos when someone leaves a position unexpectedly.

A great first week. I know a couple of other bloggers have some great ideas that they should be posting this week, so keep your eyes on the blogs!

Purchasing – Procurement – Sourcing – Supply – Spend – Management – Smorgasboard

Earlier in the year, Tim and Jason had the great supply management vs spend management debate where they tried to promote the value of the relative terms and why one should win out over the other. This prompted a number of bloggers to try and determine the best term for our space based on public recognition. Many of us tried using Google to count the number of pages or Google trends to gauge the search history, but the net result was that depending on how you approached it, one term appeared to be slightly better than the other, but both significantly trailed sourcing, procurement, and purchasing in common acceptance and usage. (In fact, if you try to plot supply management and spend management simultaneously in Google trends, you get a message that “the terms do not have enough search volume for Google to display graphs“. Ouch!)

Then, last month, Doug pointed out Technorati and the new Blog Value Calculator based on Technorati’s API that computes and displays your blog’s worth using the same link to dollar ratio as the AOL-Weblogs Inc deal. The Technorati angle, which lets you search blog entries for terms, gives us yet another point of reference to test supply management vs spend management popularity in terms of blog posts and the relative blog value of Tim and Jason’s blogs. However, the results are again inconclusive as even though there are more “supply management” blog entries, SpendMatters is valued higher than Supply Excellence.

The results for sourcing vs procurement are not much better. Although roughly twenty to thirty times as popular as supply management or spend management, whereas one term is more popular in Google, another is more popular in Technorati. The only clear winner across the board is purchasing, which is roughly five times more popular than sourcing or procurement, or one hundred to one hundred and fifty times as popular as supply management or spend management.

Which begs the question, should we take a nomenclative step back and just use purchasing, continue to fight the hard fight and push for broader use of these better, more descriptive terms of today’s purchasing/procurement/sourcing organization, or develop a whole new term entirely, one that will catch on like wildfire. Something in line with the next craze. For example, if the wild, wild west became cool again, maybe we could call it Wrangling. Or maybe we could just co-opt a more popular term, like politics (which is roughly two to four times as popular as purchasing). At least then your sourcing blogs would be valued at what they’re worth. (A recent Technorati valuation of seven sourcerors put our combined blog value at under 90K. On the flipside, political and media centric blogs such as BuzzMachine have valuations over $1M. Commentary might make great reading, but does it help you do your job? Hmmm.)

Blog Valuation Links
Spend Matters
eSourcing Forum
Procurement Central
Sourcing Innovation
Supply Excellence
Vendor Management
Purchasing Certification Blog

A Day in the Life of a Buyer

Matthew Grant of Purchase Realm had a great idea yesterday on how to take the talent series even further – by asking former and current buyers to write guest blog entries on A Day in the Life of a Buyer, which he is willing to guest post (anonymously if you prefer) on his blog!

I strongly encourage all you current and former buyers out there to check it out and share your thoughts, even if all you want to do is leave a few (anonymous) comments. After all, this is a great way to attract talent to you and your organization … future buyers want to learn from the pros – and what better way to identify a pro then when they search for information in Google and instead of being directed to some lifeless definition page, they stumble onto your comments!