Monthly Archives: February 2007

OpenRatings … Not Just for Performance Anymore

Recently, I had the opportunity to sit down with Jim Lawton and talk about not what Open Ratings was, or is, but what it will be now that it has been acquired by D&B and has access to not only the cash reserves one needs to create the next big thing but also the data it needs to take its analytics capabilities to the next level.

As discussed many times by Jason Busch over on Spend Matters (link, link, link, and link, for example), and also by Jim Lawton in his guest post (link), Open Ratings had the unique capability, built on some great predictive analytics work by some brilliant MIT graduates (whom I hope to be talking to in the future), to analyze a supplier’s financial and performance data relative to other companies in your space and tell you how likely they are to perform for you with respect to a contract to provide a certain category of product or service.

Considering most companies don’t have the data or the models to even attempt this, this is a great offering. However, with access limited only to a subset of D&B data and customer data from the Open Ratings Network, the results were often coarse grained compared to the fine-grained event and product specific events a buyer would really like to have. Considering your only other hope for a coarse-grained result was Austin Tetra (whom I will also address this week), this was rather fantastic when the capability first came out – but one could see the next step and it only made sense to push for it – which they did, and now that they are part of D&B, I dare say that they can give you a performance-based picture of a potential supplier that, in some ways, is more detailed than any other picture any other provider can give you.

However, performance is not the only issue you need to be concerned about. In today’s ultra-fast marketplace with ultra-lean supply chains, Risk is King. It’s not how good the supplier will perform, but how regularly they will perform. The last thing you want is for a great performing supplier to go bankrupt without warning nine months into a new contract. The real question is, with their new access to D&B’s huge data store, updated daily, will they be able to tell you not only how well a supplier can be expected to perform, but how risky the relationship could be be. After all, the real key to managing risk in your supply chain, is, of course, to not introduce it in the first place!

So, on this note, I’m going to end this post and ask you to stay tuned for tomorrow’s post where Open Rating’s Jim Lawton guest authors a post on the five major types of risk and what you can do to hedge against them. Keep the feed alive!

Vendormate: Great Fit, Less Fraud

Those of you following Spend Matters in recent months will remember a post on VendorMate , a vendor registration, credentialing, and compliance monitoring solution provider with a large footprint in the healthcare sector.

Not long ago, I too spent some time talking with Andy Monin in an effort to understand the extent of their offering and how they differ from services provided by providers such as Austin Tetra, Open Ratings, Browz, and Connect4Growth. It was an illuminating discussion and I believe that they are truly fulfilling a need in the healthcare sector in particular and that the financial sector needs to take a long hard look at their offering.

Jason Busch highlighted some of the benefits of the Vendormate solution, including the capture of supplier information through an online registration portal, the capability to capture supplier credentials and certificates, the built in rating and scoring system that uses 126 data points, user defined thresholds and risk tolerance, and 3rd party data to assign each vendor a risk score, and the ability to manage compliance risk through exception and be alerted when a supplier may have fallen out of compliance.

What Jason did not highlight were the following facts:

  1. most mid-size and larger organizations have no clue how many vendors they are doing business with, even within a single commodity category (a point that the spend visibility vendors spend a lot of time trying to drive home)
  2. many companies go through peaks and troughs with respect to vendor cold-calls; after a major advertisement or in a public standing offer renewal period, a company will be bombarded with more calls than it can handle, while the rest of the year calls will be few and far between; furthermore, it can be difficult to differentiate between vendors that can provide positive productivity and savings opportunities and those that will do nothing more than waste your time and money – a systematic approach, such as that provided by Vendormate, for receiving, screening, and processing these vendors helps you differentiate the gold from the coal and insures that your business operations are never disrupted as a result of vendor cold calls
  3. regulatory compliance, terrorist screening, and fraud are huge problems that need to be addressed not only in your company, but in your supply base
  4. many companies have no means, or no time, to insure that vendors are aware of, sign off on, and agree to policies and procedures
  5. since Vendormate implements a paid subscription service, vendors have an incentive to keep the information current

Vendormate’s solution addresses these problems as follows:

  1. by providing a common registration system, and refusing to deal with any supplier not in the system and approved, you can know precisely how many vendors you are dealing with and precisely how many provide you with a certain category of goods; this can greatly improve the accuracy of your spend visibility and analysis efforts
  2. by providing a self-serve supplier portal, especially one that comes bundled with a registration fee (to offset processing costs and credential review), a buyer can streamline vendor registration, review, approval, and selection
  3. by integrating with third parties that provide terrorist watch lists and companies that have been identified as committing fraudulent activities in the past, companies can insure they remain in compliance with their vendors and mitigate some key risks
  4. by providing you with a centralized process, it can insure that a supplier accesses a policy, and signs off on acceptance before completing registration; this is key to mitigating risk and future litigation

All-in-all, it’s a great way to kick-start your vendor management and compliance initiatives, especially in the verticals they have considerable strength and experience in. In addition, I highly recommend you check out Vendormate‘s blog, it is shaping up to be a good resource on vendor management.

Is Green about to hit the Big Time?

It’s been a while since my last green post, but that’s simply because Tim Minahan of Supply Excellence has been doing such a great job on the topic as well, especially considering his recent set of posts on Sustainable Supply.

However, since I’ve accumulated approximately 40 links on green and green technology since my last post, it’s time for an update. After all, considering that atmospheric carbon dioxide levels are at the highest they’ve been in 800,000 years, we need to consider what is required to to repair and reboot the ecosystem.

On the political front, Autopia reports a bipartisan group of senators have introduced a bill in the US to cap greenhouse gas emissions by 2012 to 2004 levels, with further reductions thereafter; the Economist reports that green states are taking the federal government to court in an attempt to force it to curb emissions of carbon dioxide; CNet summarizes Bush’s platform on better energy conservation in his State of the Union address (maybe because he has been ripped on global warming, unfortunately Bush’s plan is likely to fall short); on a more positive note, Bush recently signed an

Executive Order requiring all federal agencies to buy EPEAT registered

“green” computers; the Economist hypothesized that America may step up in the fight against climate change since it is Waking up and Catching Up. On a global note, the Associated Press reports that China lacks the resources to cut critical emissions, which is disturbing when you consider that China is the world’s biggest and producer of coal, and is expected to surpass the United States as the world’s No. 1 greenhouse gas emitter in the next decade.

On the automotive front, Autopia reports that ZAP is showing off new prototype electric vehicles, Crave reports that BMW just built the Hydrogen7 which can run off gasoline or hydrogen (which could turn out to be a great move if we can cleanly convert coal into hydrogen).

On the energy front, the Economist reported that investors are ramping up clean energy investments, noting that the clean-energy business is turning into the next big investment boom; Wired News Autopia reports that scientists at MIT have created a genertically altered yeast that improves ethanol production by 50%, which is critical since CNet reports that the average individual who wants to use biofuel has difficulty locating it; MIT also finds that geothermal energy potential is largely untapped, as summarized by CNet; CNet also reports that BP is building wind power projects at five sites around the US; CNNMoney.com reports that Exxon is trying to green up its act; Magenn Power is building a helium-filled balloon that generates electricity using wind power, as reported in CNet; Fortune reports on a buoy that can convert wave motion into electricity;

ZDNet reports the result of an IDC study that found that energy efficient PCs can actually save a company money (sentiments echoed in this CIO insight article);

finally, CNet put together a nice guide to alternative fuels.

On the retail front, the Economist reports a big move in green retailing. Not surprising, since even Walmart is making a big push on the green front, including recycling. (And as soon as they enter the tackle & bait business big time, they’ll be on the road to green success) Moreover, when we have Plug+Play Construction that makes high tech green buildings a snap, retail should not only be green, but be green end-to-end.

On the academic front, Fortune reports that Universities don’t ace the green test and that a Cambridge-based not-for-profit called the Sustainable Endowments Institute is aiming to shed some light on the matter.

For a look at the coming future, CNNMoney.com overviews 8 technologies to save the world, including a home hydrogen fueling station, a nuclear waste nuetralizer, and a sonic water purifier. In addition, CNNMoney.com published a Go Green, Get Rich guide summarizing companies tackling big problems, including global warming, and the technology they have developed. Finally, the CNet Green Tech section has matured from a few stray links to a solid resource section.

Note that on March 20, 2007 @ 1:00 pm EST, Supply & Demand Chain Executive is hosting a webinar on Nontoxic Chemical Inventories: New Insights for Greening the Supply Chain, sponsored by Dolphin Safe Source. After all, you don’t want to be yet another lost soul Ignoring an inconvenient truth when we’re very likely the cause of global warming. (Think of the victims of climate change, which include those of us living in coastal areas. Maybe it’s not easy being green, but it’s worth it. And if you can come up with a way to scrub greenhouse gases out of the atmosphere, more specifically, a way to remove one billion tons of carbon gases a year from the atmosphere for 10 years, you could be eligible for a 25 Million Dollar prize, courtesy of Richard Branson.)

P.S. Here is a list of recent green posts from Supply Excellence.

Fox in SOX

Fox

SOX

Box

Knox

Knox in SOX.

Fox in box.

Knox on fox in SOX in box.

Fox in SOX on box on Knox.

Feds with bills come.

Feds with wills come.

Feds with bills and wills and tills come.

Look, sir. Look, sir. Mr. Knox sir.

Let’s do tricks with bills and tills sir.

Let’s do tricks with Feds and wills sir.

First, I’ll make a quick trick income statement.

Then I’ll make a quick trick expense statement.

You can make a quick trick SG&A.

You can make a quick trick COGS.

And here’s a new trick, Mr. Knox …

SOX behind Feds and Stripes on Fox.

Fox in deep inside your tills.

Now Knox in jail for fraudlent bills.

Don’t join Fox and Knox in stripes.

Know your SOX and do it right.

Know when Fox is inside your tills.

And when he may be fabricating bills.

And to find the answers you seek.

Read your blogs each day of the week.

Advanced Sourcing Strategies Webinar

Procuri’s Supply Strategy #3 Webinar:

Advanced Sourcing Strategies: Expanding Sourcing Success

February 15, 2007: 11:30 am to 12:30 pm EST

Strategic sourcing provides the greatest and most direct lever for controlling costs and managing performance across the supply chain. With globalization and outsourcing on the rise and supply markets tightening, strategic sourcing has become a must-have competency for enterprises of all sizes and industries.

Many enterprises have tested Web-based negotiation technologies, such as reverse auction and e-RFx tools, reporting double-digit cost savings, halving sourcing cycles, and improving overall productivity and process standardization.

However, many early approaches and solutions were too feature-narrow and price-focused to drive sustained results. As a result, supply management groups are looking to build upon their success by adopting advanced sourcing approaches and broader e-sourcing suites.

What you’ll learn

  • How to move beyond the early stages of strategic sourcing to drive sustained results
  • Advanced sourcing strategies to assess true total cost and optimal award scenarios
  • How to assess and select the right e-sourcing platform for your organization
  • How to drive rapid deployment, quick results, and broad adoption with your sourcing program
  • Leverage supply market intelligence and services to improve and sustain momentum