Daily Archives: July 23, 2009

Package Diversity May Combat A Sales Slump …

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… but it may also lock you into single source relationships, which could be bad for business if your supplier is on, or is close to, shaky ground.

While it’s always nice to stand out from the crowd, I have to wonder if Coca-Cola’s recent decision to shake up its packaging is the right decision from a supply chain viewpoint. I’ll admit that the 16-ounce bottle might give it a key price point, but it could come at a cost. There’s a reason most soft-drinks come in standard package sizes (2 L, 20 oz bottle, and 12 oz can) … that’s the sizes that most manufacturers have standardized on. Every time you change a size, you change a production line. That requires investment. A manufacturer is not going to do that without a significant commitment on your part. This locks you in … and even if it insures a stable supplier, it also takes away any negotiating leverage you might have as a buyer if your sources are limited. This may not matter if your product sells like mad at a decent profit point … but if the sales campaign backfires, it could cost you.

I’ll admit that Coca Cola most likely has the brand, the marketing prowess, and the supply chain optimization capabilities to pull it off (as a very early adopter of strategic sourcing decision optimization and supply network optimization technologies), but I don’t think there are many companies that could pull this off in today’s economy. Anyone have a different viewpoint?

Praise for Purchasing’s Paltry Precise of Payment Partitioning? Puh-leaze!

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I was going to just pretend that Purchasing never published its guide to spend analysis, but then my fellow blogger decided to praise it and now I just can’t keep my pen down (or, in my case, MacBook Pro off).

Now, don’t get me wrong. While I don’t read it very much, I do like Purchasing Magazine. They’ve been doing a fine job lately of covering the basics, and if you don’t know the basics, there’s no way you can tackle the more advanced and in-depth topics covered in the Supply Chain Management Review (which is personally my favorite traditional supply chain publication and home of one of my favorite supply chain bloggers, Robert Rudzki).

But this “guide”, which amounts to not much more than a screen scraping of 16 different vendor web-sites is pathetic. It doesn’t do an in depth review of any product. It doesn’t offer any meaningful apples-to-apples comparisons. It isn’t even “comprehensive”!

It only lists 16 vendors. Namely:

Bravo Solution
CVM Solutions
Field Glass
Global eProcure
IQ Navigator
Insight Sourcing Group
PNet Software
U.S. Bank (Access Online)

What about?

IQ West
Moai Technologies
Ocean Software
Perfect Commerce
Power Advocate
Spend Radar

And that’s just off the top of my head!

And what about advice on how to evaluate, compare, and make a decision? And what about some background? Like the fact that the Emptoris product is still largely based on the defunct Zeborg offering? That the Ariba solution is still not a unified best-of-both worlds solutions (as they are still working on their “9S5” suite that takes the best of the Procuri offering, which was based on TrueSource). That Ketera is based on MicroStrategy. Or that four (4) of the above solutions are based on BIQ. And so on.

Basically, I think it would have been more useful if they’d just posted a complete list of vendors. Because you can’t trust what you rip off the website. Many of the solutions are good solutions … but the marketing spin they cut-and-pasted won’t tell you which solution is right for you!