Others, like Accident Prone Cat, should stick to the Supply Management back office.
Lesson to be Learned: Know where your workers fit. Their strengths are not necessarily what you think they are, so conduct a skills assessment. You’ll be glad you did.
Sourcing Innovation has been promoting sustainability since the beginning and design for recycle since the very early days, which is essentially what you are doing if you are designing for remanufacturing, which is finally starting to take hold in parts of the industrial sector, as per this recent article over on ThomasNet from the green & clean on a solution that makes both economic and environmental sense.
When you think about the average complexity of today’s consumer products, especially in electronics, it becomes clear that when a product breaks, it is typically only one component that is broken and a replacement of that component makes the product useable again. That’s why a lot of computer, tablet, and phone manufacturers have entered the refurbishment business – once the damaged or defective part in a product that was returned under warranty or reclaimed upon disposal by a customer, it can be reused and, more importantly, resold.
But the concept doesn’t end with electronics, and doesn’t end with refurbishment. Electronics can be designed more modularly with re-manufacture in mind, so that parts can be upgraded en-masse when the products are returned en-masse in a regular upgrade cycle. For example, if laptops were designed for easy replacement of not only memory and drives, but processors and peripheral connectors (in anticipation of USB 4, Thunderbolt 2, etc.), the previous generation models could become the next generation models and resold as either lower-end offerings in the same market or new offerings in a foreign, emerging market.
And automotive suppliers, who not only know that parts wear out, but when parts are likely to wear out, and which parts wear out together, could not only design their engines to make it easy to replace parts, such as spark plugs, batteries, belts, filters, and pumps that wear out quickly, but also the engine block as a whole, that is going to wear out in 7 to 15 years, depending on the average annual mileage. Given the choice, many people on a fixed income (who don’t live by the ocean and have rust to worry about) would rather replace the engine for 3,000 to 5,000 and keep the car for another 7-10 years if the frame is fine than pay 25,000 or 30,000 for a new car. And while this may not look as attractive from a bottom line perspective to a manufacturer, it significantly reduces the chance of the customer migrating to a different car company, which is very common if a competitor is offering a significantly better deal on a comparable car.
Plus, if the components are themselves designed for remanufacturing, it will be relatively easy for the manufacturer to reclaim the raw materials from the damaged or defective components, which is where a lot of the cost comes in, especially if we are talking rare earth metals. For example, the price of praseodymium-neodymium oxide exceed 1.25 an ounce and prices of terbium oxide (a semi-conductor that is used as an activator for green phospors in colour TV tubes) exceeded 12.00 an ounce this summer, and that’s cheap. Gold, a metal used in many electronics products, exceeded $1400 an ounce. And while there is not much gold in a single laptop, when you put fifty of them together, you’d likely get an ounce. And given that there are roughly 100 Million PC laptops and computers sold a year, that’s close to 2 Million ounces of gold that need to be reclaimed!
And, as per the green & clean article, remanufactured products offer cost savings in the 45% to 60% range! So if doing the right thing isn’t enough, that should be enough of a justification to invest in remanufacturing! This goes double if you are in electronics (for some of the reasons given above) or automotive, where the global market for remanufactured auto parts is projected to reach $122.8 Billion by 2018.
So, regardless of what you want to call it, it’s time to do it. It’s not just good environmental stewardship, it’s good economics.
China is riding the rails to riches. As per these recent posts on SI, China is Kicking the USA’s @ss when it comes to rail with its recent launch of the world’s largest high-speed rail route from Beijing to Guangzhou in the world’s third largest rail operation that carry’s over 25% of the world’s total railway workload. Add to this the fact that Laos is committing to invest 6.2 Billion on a new 260-mile passenger and freight railway between Kunming and Vientiane that connects China to Thailand and ports closer to the Suez Canal, and China is riding the rails to riches in a big way.
And now it looks like they get a chance to expand their operations in Eastern Europe. On October 31, Polskie Koleje Panstwowe SA, the Polish state railway, is going IPO on the Warsaw Stock Exchange with the sale of its cargo Europe in an effort to raise as much as 1.6 Billion zloty (approx 518 Million dollars). PKP runs the EU’s second largest freight company after Deutsche Bahn AG and controls 8.5% of rail freight in the EU, and can also arrange transports to and from Asian markets, including countries, such as Kazakhstan, Uzbekistan, Turkmenistan, Mongolia and China with licenses to provide services in Slovakia, the Czech Republic, Germany, Austria, Belgium and Hungary. PKP is going to keep at least 50% of cargo, but may be offering close to 50% for sale.
And we know China is interested. China paid a visit to PKP SA last month to determine the investment outlook of the Polish in terms of Chinese relations in the power, telecommunication, and railway industries. An IPO gives China the chance to buy a big stake even if the investment opportunity is otherwise limited. And with a bigger stake in Europe, it makes it easier for China to send goods to the European market (through its new rail line from Zhengzhou to Hamburg). Add a big stake in PKP SA to its DB Schenker (Deutsche Bahn) partnership, and China would be poised to have influence over a rather sizeable chunk of the European rail transport network. It’s the obvious investment for acquisition hungry China.
In Part I we noted that Vinimaya, despite scaling back on their marketing efforts for about two years, has been hard at work extending their core Procurement Marketplace platform to be a fully-featured Procurement Marketplace platform that fills the gap that ERP e-Procurement solutions leave wide open. Specifically, while the average ERP e-Procurement solution does great when it comes to master data management; workflow, approval, and PO management; and financial system integration; it doesn’t do so hot when it comes to content management, search, ordering, and invoice management. (Just ask vendors like Wallmedien that became the number one e-Procurement provider in Germany by filling in the holes in the SAP e-Procurement solution and Nipendo that is growing fast here in North America by offering an e-Invoice management and automation solution that most e-Procurement solutions are missing.)
The proof that Vinimaya fills the gap is, as they say, in the pudding that a large number of large organizations are eating. The Vinimaya solution, which has had great success in the private and public sectors, and which supports 37 different currencies, is utilized by buyers and suppliers in 13 languages across 80 countries on 6 different continents. That’s pretty damn good for a small company with less than 75 employees headquartered in Cincinnati, Ohio. Vinimaya’s success is due to the uniqueness it brings to the table. A unique federated search capability, a pure focus on the features other platforms lack, and a rapid implementation timeline (as a customer can go live on already supported supplier [platforms] immediately and most suppliers can be added within 24 hours) are just some of the reasons for their success. Other reasons include the platform’s ability to validate pricing in real time, force compliance if required, track pricing discrepancies, and get an organization’s spend under management.
And then there’s Vinimaya’s new vTransport solution that runs on top of their marketplace. One of the big inefficiencies in most Procurement organizations is invoice management and automation. With no standard means of invoice receipt and management, most large organizations require teams of tactical AP personnel who spend the vast majority of their time simply entering invoices into the payment system and validating basic information. In addition, due to limited manpower, only one in ten invoices gets fully validated and the result is a large number of overpayments, duplicate payments, and fraudulent payments. (There’s a reason that the recovery industry is still thriving and vendors like Lavante are building automated recovery solutions.) Like Nipendo, Vinimaya also recognized this issue and also recognized that many of the invoices are for goods and services requisitioned by organization personnel — most of which, if the solution is fully deployed and effectively utilized, should be bought through the Vinimaya platform.
So they acquired a leading PO and invoice management solution, improved it, and integrated it into their solution. With their new vTransport solution, POs can be delivered to the supplier through their mechanism of choice – XML, EDI, e-Document, supplier network, PDF scan attached to an e-mail, or old-fashioned fax, and then the invoice can be returned to the buyer through their mechanism of choice. And everything can be pulled direct from the central ERP data store and pushed back into the ERP workflow when received. In addition, the POs and invoices can pass through the Vinimaya audit engines which can verify prices and totals and limits to make sure no overcharges or fraudulent invoices get through. While the solution isn’t as extensive as you’ll get from a provider like Nipendo (which also has a print-to-cloud solution and [third-party] I-OCR integration), it’s considerably more extensive than the vast majority of e-Procurement solutions (and definitely way more extensive than what ERP offers) and will give most organizations an 80%+ solution. (The only POs and invoices missing will be for goods and servies not put through the platform – but such requisitions and invoices should be few and far between if the platform is fully deployed.) And the fact that it works with all of the big ERP and AP Systems (including Oracle, PeopleSoft, JDE, SAP, Lawson, Ariba, iValua, Microsoft, etc) out of the box is a big plus for organizations that want a good e-Procurement solution that is going to rapidly get their Spend Under Management (SUM).
Also, as indicated in our last post, the core platform has been extended, the UI has been revamped, and the performance has been accelerated greatly. Like many of the other e-Procurement players (like Coupa and b-Pack), Vinimaya has kept a close eye on consumer search and shopping (cart) technology and has incorporated the best features you’ll find on the web into their platform. Not only can you search all of the catalogs, punch-outs, and marketplaces relevant to your procurement needs in one federated search and dynamically validate the pricing and availability in real time, but you can filter on suppliers, price, and other relevant attributes dynamically, compare items in detailed comparison views, filter preferred items (based on simple or complex rankings) to the top, and track the price (and purchase) history of each item in real-time. Plus, the interface can be configured to each buyer and by each buyer to meet their particular needs.
Vinimaya has also added new quick-order and e-Forms functionality to support regular (re-orders) of products and services from suppliers based on standard catalog numbers (which a buyer probably has memorized) and standard organizational needs. The forms can be used for both simple and complex services, and templates can be pre-configured to meet all different types of service and manpower needs, including janitorial, (simple) advertising, and internal full-time and contingent workforce positions. In addition, buyers can also use them to make free-form requests and send them to the appropriate suppliers using the new quick-quote functionality. While not as extensive as what you will find in the Contingent Workforce or Agency Management solutions, it’s more than enough for most goods-based industries.
And extensive improvements have been made to auditing and analytics, but that, as well as other new development, will be the subject of a future post in this series on Vinimaya‘s Global Procurement Marketplace.
When we last covered Vinimaya, the B2B Search Engine, back in 2008, they were the next wave in product catalogue management. Remembering that Networks are ok. Catalogs are Good. Punch-outs are Better. But Agents are King!, we noted that Vinimaya was the first solution that did real-time federated search across all of your supplier databases, catalogues, and punch-outs through a single consumer-like search and shop interface.
And, unlike other procurement enablement solutions of the day, a buyer could be up and running in a day with all suppliers that provided formatted catalogues, standard punch-outs, or industry standard APIs and the majority of remaining suppliers could be brought on with about one day’s worth of effort due to their extensively configurable agent architecture specially designed to integrate with punch-outs, catalogues, EDI, XML, marketplaces, and industry standard database APIs. And even the 25% of suppliers that did not fall into the quick enable category could typically be enabled in 3 to 5 days.
The solution was the first to give the buyer total control over access, view, and pricing with their local pricing and audit engine capabilities. Marketplace pricing could be over-riden with contract pricing if and when required. And the platform worked beautifully. In 2008, their five largest implementations supported over 30K users and allowed hundreds of suppliers to be searched simultaneously through one federated view.
But Vinimaya didn’t stand still. While they may have had a brief hiccup on the marketing side during 2009 – 2011 due to management changes and the relocation of corporate headquarters, product development kept on trucking and since then have built a large number of new and impressive features and capabilities on top of the industry leading procurement marketplace technology that Vinimaya built between 2003 and 2009. (One has to remember that Vinimaya was the first vendor with [patented] federated search back in 2003, the first “simple search” of all content sources, the first forced ranking solution for products and searches across all content sources, and the first to offer real-time audit of pricing across punch-out supplier search results. In addition, it is now the first solution SI has seen that offers universal search results and shopping from within your ERP e-Procurement solution.)
On top of their base platform, that supported content management, federated search, powerful connectivity options, personalization and customization, globalization, and an easy to use shopping cart with authentication and single sign on, user roles and permission, Vinimaya has added (more extensive) auditing capability, workflow-based catalog management, quick-quote (RFX) capability, e-Forms, deep analytics capability, mobile capabilities, and social integration as well as a new transport framework for managing Purchase Orders and Invoices. In the posts that follow, we’ll dive deeper into these new capabilities and the strides Vinimaya has made over the last four years.