Monthly Archives: March 2007

Lies, Damn Lies, and Emptoris …

Observant readers of SpendMatters, which just may be the only other blog you have to read daily*, will have noticed Jason’s “Emptoris: Going Under the Numbers”* which contained one of my favorite lines of the year (sorry SpendFool, you’ll just have to work harder on flashing that wit): Lies, Damn Lies, and Emptoris …. In his post, Jason was commenting on the shallow depth of their recent financial announcements and that we don’t really know how well they are doing since “good” statistics can be swayed to say anything you want, but that’s not why the line stuck with me. It stuck with me because after recent conversations with other industry observers, including those who usually know what’s going on, it’s clear that no one outside of Emptoris (or at least no one that hasn’t been sworn to a level of secrecy that most governments would envy) really knows what Emptoris has, what they are doing, or where they are going. I believe that we knew more about East Berlin when the wall was up, Russia when they were hiding behind the Iron Curtain, or China when the red curtains were drawn then we know about the software and service offerings of Emptoris.

You might remember my Emptoris Update post back in January that was about as informative as a hastily written press release after a long night of binge drinking and debauchery where the writer was working against a 6:00 am deadline at 5:55 am. What I didn’t tell you is that most dentists have an easier time pulling teeth then I had extracting even those few tidbits of information, and I only got those because they were going into a press release.

I know some companies are secretive … but when you consider how much time they spend on press releases, that they hold user events, and that they even take the time to brief bloggers, you’d think we’d know a lot more … especially since they claim to be #2 and on track to displace Ariba as the largest solution provider in the space. But the reality is that their press releases are mostly fluff, their user events are generally closed to current users only (with us inquisitive bloggers banned), and the briefings they give are not much more informative than their brochures and press releases … even though the PowerPoints are quite nice. (That’s right … PowerPoints!) I’m left wondering just how much is release-ready product versus how much is still in development.

It all comes down to the fact that if they are so great … then why aren’t they shouting it from the rooftops? Why aren’t they doing the Procuri (acquired by Ariba, acquired by SAP) Extreme Tour and showing their product to every Larry, Darryl, & Darryl that will take the time to check it out? After all, if they’re as good as they claim, and that far above everyone else … then you shouldn’t be afraid of IP theft. Because by the time your competition figures out how to duplicate what you have, your innovative team would have you two releases down the road and still years ahead of the competition.

At this point, you’re probably saying the doctor has gone mad! Especially since he’s just announced site sponsorships are forthcoming. Well, my response to this is I doubt they’d sponsor Sourcing Innovation anyway. They did not sponsor Spend Matters, I know they had the chance, and considering their goal appears to be to go head-to-head with Ariba and win, you’d think they’d want every last potential customer to not only know about them, but think of them every time Ariba is mentioned. (Especially considering they also want to make sure they don’t lose the middle market to Procuri, a competitor that claims to be winning more deals then Emptoris when they go head to head. And Spend Matters was the one place they could have their logo side-by-side with Ariba and Procuri.) All I can say is that I’m not crazy. Just tired of the poor reception.

* I’m not saying Spend Matters is the only other blog you should read – as I also strongly endorse e-Sourcing Forum [WayBackMachine] and Supply Excellence [WayBackMachine], and Procurment Central [WayBackMachine] (at least when Dave has the time to publish), especially when David doesn’t have to resort to the nth+1 post on e-RFX (can you believe that there are still people not as enlightened as we are who still don’t get the basics of eSourcing?) and Tim talks about something other than the latest fiasco in the Detroit automotive sector (we get it … the Geico caveman is smarter, and until such a time as the Detroit industry giants bring in a management team with at least the intelligence of the Geico caveman in supply and spend management, nothing’s going to change) … but if you had to pick just two blogs to read daily, and consolidate the rest in your RSS feed reader for later, Spend Matters would be my other choice.

* All posts prior to 2012 were removed in the Spend Matters site refresh in June, 2023.

Sourcing Innovation Sponsorships

Are you an innovator in the e-Sourcing or e-Procurement Space? Do you want smart, intelligent, and progressive practitioners to know about you? Are you a strong believer in end-user education? Do you believe in the power of the blog? Do you want to be associated with a site that gets regular visitors that you want to reach out to not monthly, not weekly, but daily? Would you like to see the amount of content and coverage on Sourcing Innovation increase?

If you answered yes to any of these questions, then a Sourcing Innovation Sponsorship might just be for you! Starting in April, Sourcing Innovation will be making available four lead sponsorships. Sponsors will get their logo prominently displayed on the blog, access to a new sponsor advisory program, one introductory sponsor post, and then one interview or (blogger) commentary post per quarter (subject matter at blogger’s discretion).

Full details will be posted in a week or so, but you can reach out using the contact information in the FAQ for more information at your convenience.

Lean Commodity Sourcing

Last week at Aptium Global’s private 10 Ways to Significantly Improve EBITDA and Reduce Operational Risk in Your Portfolio Companies, Lisa Reisman (now of MetalMiner), Mark Pruitt, and Ara Surenian presented ten real-world examples of cost reduction and EBITDA improvement in small and middle market operations that proved that Lean can be used to save significant amounts of money even in categories where annual spend is in the low seven digits. Jason Busch did a good job of summarizing the event at the macro-level in his post “Small / Middle Market Private Equity Investments and Spend Management”*, so, with the kind permission of Aptium Global, today I am going to detail the first of two case studies that serve to illustrate that not only can lean significantly improve operations in companies with revenue as small as ten or twenty million, but do so outside of traditional manufacturing operations.

This second example is based on the results obtained by Aptium Global on a company that created custom electronic and electro-mechanical components for the automotive and lighting industries hurt by the automotive downtown and huge price pressure on non-electronic parts.

This company had no visibility into material versus value-added processing costs and the lack of competition in a key category resulted in no cost savings ever being achieved on a $3.6 M category. In addition, the incumbent supplier imposed a premium that appeared to fluctuate regularly and the company was unable to track the fluctuation due to a lack of visibility.

By establishing a baseline using the Olin Producer Price Index plus a fixed supplier premium, the company determined that the incumbent supplier “floated” their premium, hiding their mark-ups from the buying organization. The company was able to use the baseline to generate competition among other highly qualified, and certified, suppliers and this resulted in the incumbent immediately lowering their premium to competitive levels, resulting in an immediate 4% savings on the base premium alone. Plus, the company’s new ability to automatically track the Olin Producer Index allowed the company to insure actual invoiced costs matched quotes. Furthermore, the company was able to implement a dual source strategy and put all new requirements out to bid, locking in future cost avoidance.

If you are part of a Private Equity firm and would like to know more about how lean processes can improve the operational efficiencies of your holdings, you can email Lisa Resiman at Aptium Global (now MetalMiner) for further information, and maybe even luck out with an invitation to their next event.

* All posts prior to 2012 were removed in the Spend Matters site refresh in June, 2023.

Aptium Global : An Emerging Spend Powerhouse

Regular readers of this blog will remember that I’ve mentioned Aptium Global a few times, chronicled one of their success stories in Tuesday’s Lean Services post (with another hitting the blog sphere tomorrow),and ran a great guest post on Quantifying Quality in Lean Sourcing Initiatives by founder and principal Lisa Reisman. Aptium Global is a specialized consultancy that works primarily with small and medium sized manufacturing companies to help them save money on purchases through Lean Sourcing approaches.

Well today, in addition to industry heavyweight Stuart Burns, who runs their European practice, Aptium Global can add FreeMarkets legend Tony Poshek, inventor of The Puddy Principle to strategic sourcing. Tony, who has also put in considerable time at GE (as well as managing events for GM and other Fortune 50 heavyweights) has sourced almost $2B in his sourcing career and saved over 300M, or an average of 15% above and beyond what industry leading sourcing teams have saved. Tony was interviewed by Lisa last year and the interview is archived over on e-Sourcing Forum, archived in Part 1 and Part 2. Check it out!

Add this to Aptium’s forthcoming launch of an industry specific Metal Miner offering for companies that source metals, commodities, and components with high metal concentrations, and it’s easy to predict that Aptium Global is poised to become a powerhouse in their corner of the sourcing space.

The Metal Miner sourcing solution is a packaged two-week analysis that is designed to provide a small or mid-sized company with real time market condition and savings strategies for all of their metals and metal services spending in two to three weeks. A proprietary analytical solution built on over half a century of combined global metals sourcing experience, the solution is designed to provide you with a strategic framework to metals sourcing that can provide you and your executive team the insight you need for critical strategic sourcing decisions. Metal Miner uses state-of-the art analysis technology, takes into account a high-level assessment of the supply market for each category (including the main price drivers, the degree of fragmentation, domestic/offshore supply bases, and hedging mechanisms), and produces a customized report with specific implementable savings strategies for each category in which a significant savings can be achieved.

So, if you need sourcing help, particularly in metal or metal services categories, I’d contact them now. The secret’s out … and it won’t be long before the lines are jammed and the e-mail boxes overflowing.