Monthly Archives: December 2008

Design for Frugal Growth, Be Ready for Explosive Growth

A recent article in Strategy + Business pointed out the best reason why a company should design for frugal growth … it lays the foundation for explosive growth when the situation presents itself. To see this, let’s look at the design for frugal growth triangle that clarifies the five things a company designing for frugal growth has to focus on:

  • Accountability
    A company that is prepared for frugal growth is accountable for every dollar spent, and only spends dollars that lead to organizational improvement, such as increased efficiency, quality or productivity; cost savings and avoidance; and innovation-focussed R&D.
  • Innovation
    A company intent on frugal growth is constantly innovating new processes to improve efficiency and quality and reduce costs and innovating new products to bring to market to increase profitability.
  • Pull-based Functional Relationships
    A company designing for frugal growth does not tie up working capital in unnecessary and excess inventory … it uses a flexible and responsive supply chain to pull products and services on an as-needed and timely basis.
  • Differentiated Capabilities
    A company focussed on frugal growth knows that it needs to differentiate itself if it is to survive, especially in a down market.
  • Ability to Leverage Scale
    A company that has adopted the frugal growth philosophy has created economies of scale by consolidating research, manufacturing, and distribution. It has also established cross-functional teams and close collaboration between business units, removing the bottleneck that plagues so many of today’s departmentalized corporations.

All of this helps prepare a company for explosive growth when opportunity knocks. Here’s why:

  • Innovation Mindset Recognizes New Opportunities
    A company with an innovative mindset is always looking for problems to solve as well as new solutions to existing problems and will be the first to recognize a new opportunity when it presents itself.
  • Accountability Provides Focus
    An accountable company, used to focussing on getting results for every dollar spent, will be able to focus on the opportunity, develop a plan to take advantage of the opportunity, and execute the plan with the resources it has.
  • Differentiated Capabilities Enable New Product Design
    A company with differentiated capabilities will be able to quickly design new products to meet the specific opportunity presented to it, or streamline production processes to meet a surge in demand for existing products.
  • Pull-based Functional Relationships Allow for Rapid Response
    A company with optimized pull-based functional relationships will be able to quickly scale up production to fuel explosive growth when the time is right.
  • Ability to Leverage Scale Opens Up Markets
    A company that can leverage scale can use the same cross-functional capabilities to open up new markets, and expand globally when the opportunity arises.

The Sourcing Maniacs 2008 Vendor Tour Part 19: Servigistics

Today’s post is a little length, so it’s been broken up into Survey, Service, and Servigistics.


Survey

Wakko in a pie shop, somewhere outside of Boston
What’s taking so long?
Dot It’s only been twenty seconds!
Wakko But I want my pie now!
Dot When don’t you want pie?
Wakko When I want baloney.
Yakko Figures.
So, SupplierSoft‘s supplier management applications, built on Salesforce were really cool.
Dot Who knew that SRM, like CRM, had so many fundamental similarities … that both required extensive information management capabilities.
So, where are we off to now?
Yakko Are we still on the S’s?
How about Saqqara?
Dot What do they do?
Yakko e-Procurement and Item Master Management I believe.
Dot Anything unique on the e-Procurement Side?
Yakko I think it’s primarily catalog and content management.
Dot Probably worth checking them out. Where are they?
Yakko They’re back in California.
Dot I’m still not ready to go back yet. Who else?
Yakko SciQuest?
Dot Aren’t they working with Emptoris now?
Yakko I think so. Maybe we shouldn’t bother. I’d hate to trek all the way back to North Carolina just to be shut out again.
Dot Do you really think they’d do that?
Yakko I don’t know. I do know that the doctor hasn’t covered them, despite the fact he thinks they’re important enough to make his Vendor Day listing, so I’m not taking that as a positive either.
Dot Okay. So we’ll leave them until we happen to be back in the area. Who else is there that starts with S? Didn’t the doctor tell us the name of a company that starts with S that we were supposed to check out?
Yakko I think he did! Let me check my notes.

Here it is … Servigistics!
Dot SERVIce loGISTICS? What on earth would they do?
Yakko I haven’t a clue. Maybe we should check out the doctor‘s posts for some background. I’m getting a little tired of looking stupid …
glaring at Wakko
Wakko What I’d do now?
Yakko ignoring Wakko
According to the doctor, in his post Servigistics – Tomorrow’s Strategic Service Management Today, Servigistic’s does strategic service management, particularly in the areas of parts, pricing, and workforce management.
Dot What’s strategic service management?
Yakko According to his wiki-paper, it is a proactive approach to satisfying the customer in a manner that is both efficient and profitable while balancing organizational strategy, resources, commitments, and pricing. Strategic Service Management supports the integration, optimization, and management of core business processes, adds to your overall business solution, and helps to differentiate your offering from that of your competitors.”
Wakko That’s a mouthful. What does it mean?
Yakko Good question. Just a sec …
taking out his cell-phone
  bip-bip-bip
    ring … ring
the doctor Hello?
Yakko Hello, Doc. We have a question. Let me put you on speaker.
Yakko activates the speaker phone.
Wakko We don’t want to look stupid.
the doctor We’ve been over this already, Wakko. I’m not *that* kind of doctor. You want a plastic surgeon …
Yakko No, no. What Wakko means to say is that we’ve decided to go see Servigistics and we don’t want to show up not knowing anything about strategic service management. We’re getting tired of looking stupid because of our ignorance.
  We skip ahead a bit here. Part 16 filled in the blanks.
the doctor Okay. So what do you want to know?
Yakko When you say that “strategic service management is a proactive approach to satisfying the customer in a manner that is both efficient and profitable while balancing organizational strategy, resources, commitments, and pricing”, what do you mean.
the doctor That’s from the wiki-paper. Did you happen to read more than the first sentence?
Yakko The first paragraph …
the doctor If you’d learn some patience, and read the great materials that are available to you — at no cost, I might add– in full, you’d probably find that the wiki-paper answered most, if not all, of your questions.
Yakko Well can you give us the highlights?
the doctor I guess so. What, specifically, do you want to know?
Yakko Can you give us the nut?
the doctor But you already have Wakko.
Wakko Hey!



Service

the doctor Well, when I say that strategic service management is a proactive approach to satisfying the customer in a manner that is both efficient and profitable while balancing organizational strategy, resources, commitments, and pricing, what I am effectively saying, if you’re a procurement organization, is that services are as important to your cost management initiatives as direct and indirect goods, and that, properly managed, they are a point of savings and revenue generation, and not just a cost.
Dot But how does that work? Services require people — who cost money, and tools — which cost money, and parts — which cost money.
the doctor Let’s break it down.
Wakko Break it down?
the doctor Yes. Let me ask you this. How many people? What tools? And how many parts?
Dot What do you mean?
the doctor Let’s say you have 10 people, but you could provide the same level of service with only 7 if you managed them better, or, preferably, manage service for a customer base that is 40% larger with the same number of staff! Let’s say you’re using an expensive ERP-based enterprise CRM but you could get away with a SaaS solution based on open source. And let’s say that you currently stock ten 225 KVA three-phase transformers, when you only use an average of two in any given month. How much more are you spending than you need to?
Dot A few thousand?
the doctor Try a few hundred thousand. A good service professional, depending on what you’re servicing, costs you somewhere in the 50 to 150 K band annually; ERP-based enterprise CRM systems often cost in the millions annually when the TCO is fleshed out, while a SaaS solution will often cost less than 100K; and those transformers list for 15K a-piece, storing eight more than you need at an annualized overhead of 35% is almost equal to one person’s annual salary.
Dot So good service management can really save you a bundle.
the doctor And make you a bundle too. What do business customers pay for?
Dot Goods and services.
the doctor And what goods and services do they pay more for?
Dot Uhmm .. the ones that provide more value?
the doctor That’s right. And how do you provide more value?
Dot Better products and services?
the doctor Yes, and value-added services to be precise. Good service management will allow you to deliver a better level of service than you do now, for less than it is costing you to deliver your current service level. And customers will not only pay for that, but they’ll likely pay a little more for that if you reduce their workload.
Wakko So strategic service management is about managing your people, parts, and technology in a way that allows you to do more with less and deliver more with less, decreasing your costs while increasing your revenues. It’s strategic sourcing, on steroids, for services.
the doctor stunned
You’ve got it, Wakko!
Yakko, does that answer your question?
Yakko I think so. Now can you tell us what Servigistics does?
the doctor I don’t want to spoil your fun. Go find out!
click



Servigistics

Yakko So now that we know what strategic service management is, let’s see if we can piece together what Servigistics does. In his post Servigistics – Tomorrow’s Strategic Service Management Today, the doctor indicates that Servigistic’s does strategic service management, particularly in the areas of parts, pricing, and workforce management. Then, in Workforce Management: A Servigistics Approach, the doctor dives into workforce management and says it is “a software-based solution that optimally plans and dispatches field service technicians and their properly stocked vehicles to a customer’s location in a timely manner in order to deliver on their service commitments” and that it will “typically addresses demand management, workforce scheduling, workforce dispatching, and mobility solutions”.

Diving in, the posts says that the Servigistics “workforce planning component forecasts workload to determine the appropriate workforce size, the scheduling engine automatically sets and adjust optimal assignments based upon available data and available rules and updates those assignments in real-time if a higher-priority service call enters the system, the web-based appointment request feature allows customers to self-schedule, and the service mobility solution not only enables workforce communication, but allows the technicians to indicate where they are in the delivery cycle”.

Dot It sounds pretty sophisticated.
Yakko Sure does. Let’s go talk to them.
  the maniacs travel from Boston to Atlanta, Georgia
Wakko tap, tap, tap goes the mini-mallet
Hello. Hello.
Sharp Dressed Man a sharp dressed businessman opens the door
Hello … oh no!
Wakko looking around in a confused manner
What?
Sharp Dressed Man You!
Yakko You know who we are?
Sharp Dressed Man Of course I do! I read Sourcing Innovation every day. It’s the best blog out there! You usually spell Trouble with a capital T, and we’re a no-nonsense operation here!
Yakko We’re not here for trouble!
Dot We just want to learn more about strategic service management.
Yakko And how it can help companies.
Dot And what you do.
Wakko the doctor sent us!
Sharp Dressed Man He what?
Yakko Well, he didn’t exactly send us. He told us if we really wanted to learn about strategic service management, and what innovative companies are doing, we should consider checking you out if we were in the area. And here we are!
Sharp Dressed Man Yes you are. Well, the doctor‘s right in that respect … we can teach you about SSM … and if you really — really — want to learn, I’d be happy to talk to you. But you have to be good.
Dot We’re always good!
Sharp Dressed Man looking directly at Wakko
And put away the construction tools, roman candles, mechanical gadgets, and anything else that can be used for destructive purposes. Got it?
Wakko putting his mini-mallet away
Got it.
Sharp Dressed Man Okay. So, do you know what strategic service management is?
Wakko It’s about managing your people, parts, and technology in a way that allows you to do more with less and deliver more with less, decreasing your costs while increasing your revenues. It’s strategic sourcing, on steroids, for services.
Sharp Dressed Man Not bad. Do you know how we enable it?
Yakko You provide solutions for parts, pricing, and workforce management – the cornerstones of strategic service management. Your workforce management product, in particular, is quite extensive and includes workload forecasting capabilities, a dynamic scheduling engine, and a service mobility solution that service personnel can use to stay up to date in the field.
Sharp Dressed Man Not bad. But do you understand how these solutions provide value to our customers?
Dot They allow you to do more calls with less people through optimal scheduling, identify the most cost-effective tools and solutions to get the job done, and optimize inventory to maximize service levels while minimizing carrying costs?
Sharp Dressed Man Correct, but do you understand how we provide value to our customers? Do you understand why a customer wouldn’t just go out and buy a parts management solution from competitor Alpha, a best-of-breed price management engine from competitor Beta, and a workforce management solution from competitor Gamma?
Yakko I guess not.
Sharp Dressed Man We provide a holistic solution to strategic service management.
Wakko I like 3-D.
Yakko Not holographic, holistic — as in concerned with the whole and not just the parts?
Sharp Dressed Man Correct. You see, the full value of strategic service management only materializes when you tackle the whole problem. You can have the best workforce scheduler, but if they don’t have the parts, your personnel can’t perform the service. You can have the best inventory forceasting and management solution, but if the parts aren’t available where your service personnel need them when they need them, it’s for naught. And you can have the best pricing engine in the world, but you still need to have the parts available where the people are going to buy them.
Wakko So there’s no real value unless you look at the whole picture?
Sharp Dressed Man Correct. And that’s what we do. Through our Command Center, we unify our parts management, workforce management, pricing management, and knowledge management solution — which makes your workforce more productive — into one cohesive platform which doesn’t “improve” one aspect of service, such as workforce management, to the detriment of another, such as parts & inventory management.
Dot I never knew there was so much to good service management.
Sharp Dressed Man Now you do. And with that, may I bid you good day?
Yakko Since we’re here, we really should get an update for the doctor!
Sharp Dressed Man If it will get rid of you … and keep you OUT of my server room …
glaring at Dot and Wakko
I can do that.

Since we last spoke to the doctor, four big things have happened for us here at Servigistics.

First of all, we’ve made a number of updates to our workfoce management solution, including a web-based portal for customers to track their service status — think Fedex package tracker on a steroid shake; we’ve enhanced automatic e-mail notifications and the command center dashboards; we’ve added dispatch capability to TomTom navigation devices, e-mail, and SMS; and, probably most significantly, leveraged grid-computing technology in computation-intensive portions of the software for dramatic improvements in scalability.

Secondly, we’ve made some significant enhancements in internationalization. We now support 8 different languages, including double-byte Japanese, Mandarin, and Korean; we can add a new language in two to three weeks, and each user can see the same data in her language and custom date and currency formats.

Thirdly, we’ve added some specific aerospace functionality with respect to fleet provisioning, rotable pool planning, inventory consolidation, PBH/PBL cost-based planning, RTP and de-manufacture, scheduled maintenance planning with respect to repair BOMs, and replacement forecasting for life-limited parts.

Finally, in addition to netting a number of significant new global customers, we’ve also landed some very big aerospace manufacturers, carriers, and MROs

Anything you need elaboration on?

Yakko Uhmm … no?
Sharp Dressed Man Great! Thanks for stopping by. Have a great day!

Editor’s Note: At this point, we’ll be taking a short break for the 12 days of X-Mas, but we’ll return with the final two parts of the maniacs’ road tour on December 29 and December 30.

Subscribe … and Take Your Knowledge to the Next Level

As a regular reader of Sourcing Innovation, you’re on a quest to continually expand your knowledge of sourcing, procurement, and supply chain vendors, technologies, and best practices as this helps you to be the best professional you can be. The best way to do that is to make sure you stay on top of the wealth of free information available to you. One way to do so is to check the blog daily and watch for new additions to the sidebar (under “Free Resources“) and the resource site. Another way is to Subscribe. You can receive Sourcing Innovation blog posts in your inbox as well as newsletters, special announcements, and direct links to the latest resources available to you.

In addition, you can also sign up for the Next Level Purchasing Free Purchasing Resources Program which gives you free access to the Managing Supplier Performance course, a new purchasing tips article in your in-box every two weeks, and first access to Next Level Purchasing white-papers, including the 2008 Purchasing & Supply Management Carer & Skills Report.

The last two articles have been quite insightful. In Cost Reduction Ideas (Beyond Sourcing), Charles Dominick, the President of Next Level Purchasing, with the help of Rob Patton of Paladin Associates, outlined four ideas for achieving cost reductions without switching suppliers, including:

  • Ask & You May Receive
    Sometimes your suppliers have cost saving ideas … all you have to do is ask them.
  • Aggregation
    Aggregate your need, especially for a commodity item, with other buyers.
  • Specification Rationalization
    Use industry standard components and standardize on as few as possible.
  • Leveraging the Supply Chain
    If you have multiple suppliers buying the same raw material, consider buying it for them if the combined volume nets a lower price.

In Supplier Partnerships: Your End of the Deal, Charles identified four common supplier goals that you can help your suppliers achieve. Helping your suppliers achieve their goals increases their commitment to your needs for cost reduction as a buyer — and I don’t think anyone can say they don’t need cost reductions in today’s market. The contributions you can make include:

  • Reduced Payment Cycle
    Right now, your suppliers are suffering from a credit crunch and most likely hurting way more than you are. Pay them in a reasonable time-frame, and go to the top of their favorite customer list.
  • Reduced Complexity
    Customized reports, unique packaging requirements, and other “special requirements” come at a cost to your supplier (and, ultimately, to you). Eliminating unnecessary services, especially those without value-add, will reduce your supplier’s costs … and yours.
  • Better Sales Forecasts
    This is actually a two-for-one. First of all, providing your supplier with better sales-forecasts will help it insure that it buys only what it needs to make your products. Buying more locks up cash in inventory that it can’t afford to lock up right now, and buying less means it will have to pay more on spot buys. Secondly, you can commit to multi-year deals, which increases your supplier’s confidence in future sales, and revenue–targets. This keeps your supplier on stable footing and keeps you on the preferred customer list.
  • Testimonials
    Suppliers need sales now more than ever. If you will step up and certify the quality and reliability of the supplier to the marketplace, that will increase the supplier’s business and stability. Not only will this make you a favorite customer, but it will decrease your risk that your supplier goes out of business when you need it most.

If you haven’t, I would consider signing up for Next Level Purchasing’s Free Purchasing Resources Program. In my view, there are not enough good quality free resources out there, and you should take advantage of the few there are. And besides, when you consider that the last mailing reached over 97,500 subscribers, you know that it must consistently deliver information that you can use.

Supply Chain Management Implementation Risk Minimization

As both an enterprise software expert and a supply chain technology expert, it’s a safe bet that the recent article in i2’s Supply Chain Leader on Minimizing Risk During SCM Implementations would get my attention. The reality is that a poorly executed supply chain management implementation across an enterprise can destroy your business. The 2.25 Billion Inventory write-down that Cisco had to take in 2001, due to a breakdown in its supply chain forecasting and visibility systems, might have been bad, but Foxmeyer, who in 1996 was the 2nd largest wholesale drug distributor in the US with annual sales over 5 Billion went out of business thanks to an ambitious IT revamp, that included a massive enterprise wide ERP upgrade to manage and automate its supply chain and distribution. It sold in a bankruptcy fire sale to a larger rival for a mere 80 Million.

As the article notes, while innovative SCM processes and technology tools have the strength and capability to revolutionize an organization, they can also disrupt business as usual, at least in the short term. And if not handled properly, SCM implementations can disrupt processes and technology in the long term as well … and even affect the viability of your business! They have to be intelligently managed, and risks have to be identified, mitigated, and monitored from the start.

As the article notes, the project team can’t just focus solely on achieving the deliverables when they are planning a new SCM implementation. They have to consider the risks that may arise during post-implementation, when the solution will be subjected to multiple process and technology changes that it will need to support, and possibly risk business viability. As the article points out, broader issues such as long-term performance and scalability, operating environment and hardware, and reporting and connectivity must be considered up-front to mitigate future risks.

So what advice does it gives? It provides the following three tips:

  • Identify Every Risk

    Collect information from multiple stakeholders and perspectives, identify any potential risks, asses them, and manage those that are likely or would have a severe impact if they occurred.
  • Track Critical Risks Over Time

    Information on the relative priority, likelihood, and status of of any risk should be available, and up-to-date, at all times.
  • Ensure Ownership of Solutions and Associated Risks

    Make sure that everything you implement is identified, documented, tracked, and maintained. No under-the-radar implementations without proper documentation and knowledge transfer. Otherwise, the next system update will be a total disaster when multiple systems that people depended on to their job, that no one in IT or upper management knew about, just disappear.

Not bad advice, but it only scratches the surface, doesn’t give you anything you can really use to start (or track your efforts), and, most importantly, doesn’t give you the best advice of all:

  • Bring in an Independent Expert
    Don’t trust yourself, or your vendor, to do it right. Let’s be honest … you’re not an expert in enterprise software, implementation, and integration and your vendor is not an expert in your business. You might use the same vocabulary, but, fundamentally, you don’t speak the same language (or at least not fluently). Bring in an independent third party who is an expert in both supply chain software and IT project management and in supply chain processes, and supply chain process reengineering, to manage the planning phase to insure you don’t miss any key risks, that you select the right systems, and that the implementation doesn’t disable functions or miss modules that you really do need for a subset of your staff to do their jobs. The right plan will go further to mitigating risk than any mitigation effort ever will. I guess what I’m saying is, if you don’t know where to start, don’t be afraid to call the doctor, because, nothing beats preventative medicine.

Just remember, Consultants are Cheap and it’s easy to get Maximum Value from Your Consultants.

The Sourcing Maniacs 2008 Vendor Tour Part 18: SupplierSoft

This post is a bit lengthy, so I’ve broken it into Set-Up and Supply.


Set-Up

Waiter Your pie, sir!
Wakko Thanks!
Wakko dives into yet another pie. A stack of empty pie trays sits beside him.
Waiter Shall I fetch another?
Wakko Most certainly!
Yakko So, not all industries are created equal when it comes to sourcing.
Dot I guess not! I never knew that some categories were so involved!
  the maniacs just finished their visit with Power Advocate, an end-to-end solutions provider to the energy and utility industry
Wakko between mouthfuls of Boston Cream Pie
So, where next?
Dot On to the Q’s I guess!
Yakko Quintiq?
Dot Supply chain optimization? That’s too much for Wakko …
Yakko QP Group?
Dot I think they’re consulting.
Yakko You’re right. How about Quadrem?
Dot The marketplace? Maybe.
Yakko I think they also provide solutions and services.
Dot Sounds good. So where are they?
Yakko Good question. I believe they have offices all over the world.
Dot I bet most our sales. Where’s their head office?
Yakko Let me check.
tappity-tap-tap
Amsterdam.
Dot Too bad. They might have been interesting. On to the R’s?
Yakko Rapt?
Wakko between mouthfuls of Boston Cream Pie
Didn’t Microsoft buy them?
Dot I think you’re right. I don’t want anything to do with Microsoft …
Yakko Rearden Commerce?
Dot Back in California … and they’re a little corporate for my taste.
Yakko I’m not ready to go back to the valley either. Resources Global Professionals?
Dot They’re a consulting and staffing services agency, not a consulting and staffing solutions provider.
Yakko Oh. Hmmm.
  ring
Yakko Yakko’s Yummy Yams … picture perfect produce …
the doctor Hello, Yakko. You guys looking for someone else to check out?
Yakko We are, actually.
the doctor Great … I just got contacted by SupplierSoft … a new supplier management solutions company … they want to give a demo.
Yakko Will they give it to us?
the doctor I don’t see why not.
Yakko Great! Where are they based?
the doctor The valley.
Yakko We’re not ready to head back to the valley yet.
the doctor That’s okay. They’re 100% SaaS and they will do the demo on-line.
Yakko That sounds good.
Wakko between mouthfuls of Boston Cream Pie
What does doc want this time?
Yakko He wants us to review SupplierSoft, a SaaS company. He says we can do the demo from here.
Wakko Great!
Waiter …
Yakko So, when’s the demo?
the doctor Ten minutes. I’ll send you the details. Have fun!
Yakko Later, doc!
  the maniacs prepare for the demo
  beep bip-beep-bop boop-bop-bip boop-bop-bip-beip
Yakko Hello?
Mr. CEO Hello. Is this the doctor?
Yakko No, this is Yakko.
Wakko I’m Wakko.
Dot And I’m Dot.
Mr. CEO The maniacs? Don’t you work for …
Yakko Not since last year.
Wakko We were wakko’d. Get it?
Mr. CEO Sorry to hear that. Anyway, I’m expecting a call from the doctor …
Yakko Something came up. Doc can’t make it. He asked us to take the demo on his behalf.
Mr. CEO Well …
Dot Don’t worry. We’ll convery everything we learn!
Mr. CEO Do you work for the doctor?
Yakko We don’t work for anyone at the moment.
Dot So we’re doing a vendor tour …
Wakko learning as much as we can about the sourcing world …
Yakko and passing on anything useful that we learn to the doctor …
Mr. CEO That’s interesting.
Dot Very. We’ve learned a lot!

Supply

Yakko So, can we have the demo?
Mr. CEO Uhmm, sure. Where should we start?
Yakko Well, Doc literally just asked us to do this ten minutes ago, so we haven’t the first clue about you. We didn’t even know you existed until then!
Mr. CEO That’s probably because we’ve been in stealth mode developing our solutions and working out the kinks with our beta customers until very recently. I don’t believe in vaporware, and since we’re a pure SaaS solution, I wasn’t going to launch a product for mass-market adoption until it was ready.
Yakko So how long have you guys been around?
Mr. CEO I started the company last year …
Yakko and you already have a product ready for the mass-market?
Mr. CEO We have four actually …
Dot Are you serious?
Mr. CEO Yes. Since we built our solution on the Salesforce platform …
Dot Isn’t Salesforce CRM? I thought you were in the supplier management space.
Mr. CEO We are. There’s actually a lot of similarity between CRM and SRM …
Yakko But one solution is focussed on customers and the other solution is focussed on suppliers …
Mr. CEO That’s true, but what you have to realize is that both platforms require the same foundation …
Dot … which is?
Mr. CEO Extensive information management capabilities. CRM requires you to maintain an interaction history with the client. Those interactions are captured and categorized as data. SRM requires you to maintain an interaction history with the supplier. Those interactions are also captured and categorized as data. Fundamentally, from a technical standpoint, they’re almost identical solutions … the only real difference is one solution faces the downstream customer while the other faces the upstream supplier.
Dot But what about SPM? (Supplier Performance Management) There’s no CPM equivalent …
Mr. CEO You’re right. But the foundation is, again, data.
Yakko So you’re telling us it really is possible to build an extensive supplier management platform on Salesforce?
Mr. CEO And then some!
Yakko Ok, I’ll bite … why would you do so?
Mr. CEO Salesforce is a scalable, secure, reliable, and proven platform with 47,000 customers and 1.2 Million users. They’ve spent over 150 Million on their infrastructure. It allows us to offer our customers big enterprise scalability and reliability from day one … and do so at small company prices. How many companies in the supply management space can say they’re hosted on a 150 Million infrastructure?
Yakko Uhmm … uhmm … uhmm …
Mr. CEO That’s my point!
Yakko So what solutions do you offer?
Mr. CEO We currently offer Supplier Management, Environmental Compliance Management, Supplier Corrective Action Management, and Supplier Audit Management solutions with embedded process and project management. And we have a Supplier Help Desk Application in beta.
Yakko I guess we should start with the Supplier Management solution.
Mr. CEO As you can see, it’s an extensive supplier information management solution that captures a complete supplier profile; contacts based on roles; diversity, quality, and environmental certificates; insurance certificates; non-disclosure agreements; documents; meetings and meeting notes; projects; and custom data-capture requirements. In addition, you can tag items, include custom links, and search your entire supplier database based on multiple filters. It also has fairly extensive reporting capabilities, and a customizable dashboard for the home-page which keeps track of your tasks, calendar, waiting approvals, and the reports of your choice.

In addition to being able to define your own suplier data model, it supports multiple sections for each information type, it supports attachments whereever you need them, customizable step and task-based workflows by user or role, and an instantly accessible supplier view from anywhere in the supplier management application.

Yakko What does that do?
Mr. CEO It allows you to see what the supplier will see at any time.
Yakko Well, so far it sounds similar to what Aravo and CVM Solutions offer.
Mr. CEO There are similarities, as they also offer supplier information management solutions, but we feel we have some significant differences that will make our platform more attractive to our target market.
Dot Like what?
Mr. CEO The stability of our underlying platform, our low-cost, and, most-importantly, the tight integration with our other modules, which include not only the environmental compliance (which we believe allows us to match Aravo’s capabilities) and the supplier audit management (which we believe is better than CVM’s capabilities), but our rather unique corrective action management and help desk solutions.
Yakko Let’s move on. I’m still waiting to be suitably impressed.
Mr. CEO No problem. As you can see, our Environmental Compliance Solution comes with extensive environmental data collection capabilities at the Bill of Material (BOM), part, and raw material level; the ability to track all of the relevant regulations and regulatory exemptions; complete specifications, parts, component materials, and material declarations; substances and substance declarations; and AVLs.

It supports standard PDF forms that can be filled out by suppliers and uploaded into the system by way of XML extraction and automated data load; it validates and verifies all data on definition and import; it can generate user-defined alerts whenever a substance, material, part, or BOM is not in compliance; and in addition to a standard set of compliance reports, it allows users to define their own.

Yakko So you’ve more or less matched the lesser-known offerings from EcoVadis and Co-exprise.
Mr. CEO Well, I’m not really familiar with those solutions, but I think our solution does what an environmental compliance solution needs to do. And it integrates with our Information and Audit Management solutions, which we feel is a big plus.
Yakko Interesting. Show us your Audit solution.
Mr. CEO No problem. As you can see, it builds on our information and environmental compliance solutions and allows for collaboration between our customer, their suppliers, and third party auditors. It also allows for the definition of corrective action plans and projects to implement and monitor those corrective action plans, which is based on our integrated workflow and project management capabilities.
Yakko Not bad at all. So how did you build it all so fast?
Mr. CEO We took advantage of everything Salesforce had to offer and built it in their Apex language, which essentially wraps Java in a rapid development language designed to take full advantage of the multi-tenancy Salesforce.com environment. We also used good coding practices and created our applications in an object-oriented manner that allowed us to re-use common components, which could be tested once and re-used wherever needed.
Yakko So what are your plans?
Mr. CEO Eventually, we plan to be the Salesforce++ of the SRM world.
Wakko But I thought you said you used a Java-Based language?
Mr. CEO Ha, ha. Good one, Wakko.
It’s an ambitous plan, but one we believe is ultimately realizable. Of course, we’re starting small. Right now, we’re focussed on manufacturing and distribution.
Yakko Why?
Mr. CEO That’s where we see the biggest pain, and the biggest benefit of our solution.
Yakko How so?
Mr. CEO Consider a large manufacturer sourcing 10,000 parts from 500 suppliers who has to get the lead out to comply with RoHS. How are they going to do this without our solution? They’re going to use spreadsheets. This is going to result in hundreds of thousands of spreadsheets. How do you analyze that many spreadsheets to find out which parts from which suppliers are not in compliance. And, more importantly, how do you insure that they get to the right person at the supplier who you are certain will fill them out properly without a central supplier database with up-to-date contact information? You don’t … and you scramble a very large team on a very large project, that takes way too long, trying … and risk huge losses from product recalls if just one part slips through.
Yakko And with your product …
Mr. CEO You select the parts that need to be in compliance, all of the suppliers get the PDF forms e-mailed to them, once the form is filled out it is automatically uploaded into the system, and you can run a report at any time that tells you how many parts are compliant, non-compliant, or in an unknown state because the supplier hasn’t provided you with the information. You can then run another report to get a list of the suppliers, listed contacts, and follow-up with them through the system, which integrates with Outlook. As you maniacs would say, once the supplier and part masters, and their relationships, have been defined … it’s easy-peasy.
Wakko Whoa!
Mr. CEO You said it, Wakko. And if anyone wants to see for themselves how powerful our solution is, we offer a free 30-day trial. We’re sure that it won’t disappoint.