Category Archives: Electronics

Wham Up Your Direct Sourcing with EffiGO!

EffiGO might not be a name you know, as they spent the first decade building, deploying, and growing primarily in India (where they have over 150 enterprise customers including some of the largest names in India in Construction, Manufacturing, CPG, Automotive, IT, Pharma, and Chemicals and have sourced and procured over 25 Billion in Spend), but they now have a growing presence across Asia, the Middle East, and are just starting to expand into Europe (with America coming soon).

However, it now is a name you should know because they built the system from the ground-up to be a complete purchase requisition to invoice approval system with all of the key sourcing and procurement steps in between for indirect (and tail spend), direct, rate-card based services AND complex (project) procurements for their customers — whatever their customers needed. And the foundational “plan to pay” from purchase requisition to ok-to-pay suite can be obtained by a LMM or SE (Large MidMarket/Small Enterprise) at an annual license cost starting at 100K. Integrations, and they highly recommend integrating to the ERP (where they have integrated with most major ERPs multiple times including, but not limited to SAP, Oracle, Infor, Dynamics, etc.), custom configurations, and services are extra, as with any other major player, but the license cost makes it affordable for the mid-markets who need a direct/complete sourcing solution.

The core of the EffiGO platform is broken into two main modules that cover the two main work streams:

Plan to PO

The Plan to PO component consists of the creation/acceptance of the Purchase Requisitions (which can be pushed from the ERP or manually created in the platform), the creation and execution of the sourcing events, the selection of the award, and the definition of the contract that orders will be made against.

Once a Purchase Requisition is pulled in from the ERP or manually created by a user in another organizational department, the user will see it in EffiGO and can pull it up, see all the details, edit those details (including, but not limited to the goods and services requested, the units, the delivery dates requested, the payment terms, etc.) or request an edit if they don’t have the authority, and approve it for sourcing.

With respect to core sourcing, the platform supports:

  • RFX – Quick
  • RFX – Full (with or without TechnoCommercial Evaluation)
  • Auction
  • Reorder (from a past RFX created in the last quarter)
  • Order from Catalog (for products where [rate] contracts are in effect)

RFX (and auction) creation starts by selecting one or more approved requisitions to kick-off an RFX (or auction) process, selecting the event type, entering basic information (name, business unit, event owners, business unit, desired delivery locations, currency, etc.), and determining whether the event only requires commercial specifications and terms or detailed engineering/technical review and a weight-based award based on commercial terms and product/supplier review.

Note that the system will inform the buyer if one or more parts or items in one or more of the requisitions they select is either in inventory and/or already under contract and can just be fulfilled without going through a sourcing event.

Once the basic event criteria have been defined, and the items and quantities confirmed, the user is walked through the remaining configuration steps that include:

  • documentation – standard organizational terms and conditions, NDAs, and other project specific documents (which can be pulled in from a central library) or uploaded
  • price tables – the platform supports pre-configured bidding templates for different categories and products (that can be associated with any level of the product and service hierarchy they support), which can include non-price components, and the user just needs to select one
  • vendor selection – the buyer can search for vendors by group, category, location, etc. and add them one at a time or in groups
  • dates: clarification questions, bids, follow-ups (if requested), notifications, etc.
  • review criteria: techno only – select the template that will be used for product/services/vendor review and scoring

Note that since the requisitions can be pushed in by the ERP, they can range from a requisition for a single item to a requisition for a complete bill of materials, each item or part can be associated with its own cost breakdown table defined in the EffiGO platform, each part can have its own associated documents, including drawings and detailed product specifications, which can be included in the ERP push, pulled in from the EffiGO library, or even pulled in from a (n optional) PLM integration, and the cost tables can also include service cost rate tables as well. To make bidding easy for the suppliers, the bid sheets can be pulled down into Excel (and then re-uploaded), and that can be done on a product or event basis (and then the workbook will be multi-tab if different cost models are required for different parts and/or service rate cards).

If the sourcing event is being awarded on commercial terms only, then the application will select the lowest bids at the part, bundle (grouping), or RFQ level for award, and if the buyer approves, the award selection(s) can be output for offers, letters of intent, and contract negotiations, one per supplier. If the sourcing event is on commercial and technical, the commercial are auto-scored and the buyer scores the technical components, and then the award can be auto-computed in the application according to the award level.

Once a contract has been signed, it can be uploaded with all of the terms and conditions defined (and all meta-data from an associated event can be associated with the contract), and custom completion requirements can be specified in the meta-data to make sure that all POs go out with those requirements (and they are not forgotten — more on this in our discussion of the PO to Pay module).

PO to Pay

The PO to Pay component consists of the creation of the purchase orders, the management of the purchase order and assurance of contract terms and conditions, the management of associated communications (acknowledgements, change requests, ASNs, etc.), the acceptance of the invoices against the orders, the processing and approvals, and the creation of an ok-to-pay push notification to the payment system.

When a buyer is ready to place an order, the buyer can create a purchase order:

  • off of an RFQ
  • off of one or more catalog items which may or may not be under contract (but are approved for purchase)

As with sourcing, if the buyer selects an item that is already in inventory or under contract (and can be requisitioned without any approvals), the system will inform the buyer.

As with any other system, a purchase order consists of items, units, approved pricing, delivery locations, dates, and other key pieces of information. Unlike other systems, the buyer can specify a full host of requirements that must be met before the PO can be issued, acknowledged, and dispatched against which include, but are not limited to:

  • whether an Ack(nowledgement) is required
  • whether acceptance is mandatory
  • whether an ABG (Advanced Bank Guarantee) is required
  • whether a [C]PBG ([Contract] Performance Bank Guarantee) is required
  • whether a LC (Letter of Credit) is required
  • whether the vendor needs to submit any technical documentation
  • whether the requesting buyer needs to provide the vendor with any instructions or documents
  • whether stage monitoring is required (and what the stages are; these can be selected from pre-configured or PLM lists)
  • whether transportation is in the scope of the buyer or vendor
  • whether the vendor is required to submit dispatch instructions
  • other potential organizational specific requirements around purchase orders (for certain products, services, or categories)

When a vendor receives the purchase order, they also receive all of the associated documents and information provided by the buyer along with all the instructions they need to follow and requirements they need to meet to make a delivery AND get paid for it.

Once a vendor has dispatched (part of) a purchase order (which is also tracked against an RFQ to make sure that they never dispatch more units than they have been approved for), they can submit an invoice, which is associated with the order, which goes into an approval queue. Approval chains can be configured to be as simple, or complex, as needed, with as many steps as necessary.

Catalogs are buyer maintained. Suppliers can upload and submit catalogs to the buyer, but they don’t go live until approved by the buyer, who can accept or reject items and pricing. Once awards have been made and/or contracts have been signed after the issuance of a sourcing event, the buyers can create catalog items with the details and pricing, and mark them as under contract if a contract is signed or the rates are approved (if the supplier is willing to honour the quotes in the latter case).

Catalog items can have as many buyer standardized fields as needed to completely specify the item, which can be searched by type, category, supplier, location, status, and keywords against key fields. All items can be associated with their proper place in the organizational category hierarchy, which can be as deep as required. (Note that vendors can identify the categories they service up to Level 4 in their profile.)

Vendor Management

Required vendor information management is embedded throughout the process and is included with both of the core modules and includes vendor onboarding as well as ongoing information management, reviews, status updates (which can block on a category, unit, or organizational level), and insights (through the built-in reporting).

Vendors can be loaded from the ERP on implementation or created inside the platform. Vendor profiles in EffiGO consist of basic corporate details (type, corporate id, taxation registration, primary category, HQ, etc.), deep business details (registered and correspondence details, production locations, etc.), financial info, registration & certifications (statutory, documents, etc.), sustainability information, declarations, and audit log. Additional forms can be configured on implementation to capture any additional information that the buyer needs to track.

In addition, the buyer can maintain the vendor status and whether or not they are approved on a division, or even category basis. Unapproved vendors can be invited to events by an authorized user, but cannot be sent POs, or approved for payment.

Vendor Portal

A vendor has their own portal to interact with the buyers on the EffiGO platform. While they will get email notifications of every sourcing event, change, award, contract offer, purchase order, change, information request, etc., many actions will need to be taken through their portal (for which they will get a direct link to do so in the e-mail). This is because communications, acknowledgements, change requests, etc. need to be associated with the right event or purchase order, key documents need to be secure, and the organization needs to make sure invoices (with payment instructions) are not tampered with.

Summary

EffiGO is a very different kind of platform — one that was built to serve manufacturing clients in Construction, CPG, Automotive, IT, Pharma, and Chemicals from the ground up and one that ended up being a direct-focussed system that can also handle indirect, services, and complex project procurements as well! It’s a name you don’t know, but if you have a mix of direct, service, and indirect needs, one you should know — especially if you are based in EMEA where EffiGO is currently expanding to!

Technobug
Technobug
Technobug
Technobug

It puts the boom-boom into my heart (hoo-hoo)
It sends my soul sky-high
When the PR starts
Technobug into my brain (yeah, yeah)
Goes bang-bang-bang
‘Til my keys do the same

But something’s bugging me
Something ain’t right
My best friend told me
What he did last night
When I was sleeping in my bed
I was dreaming
But I should’ve been Sourcing instead

Wake me up for EffiGO-go
Don’t leave me hanging on like a yo-yo
Wake me up for EffiGO-go
I don’t wanna miss it when we hit that high
Wake me up for EffiGO-go
‘Cause I’m not planning on Sourcing solo
Wake me up for EffiGO-go
Lets get Sourcing tonight
I wanna hit that high, yeah yeah!

How Many Zumens to Manufacture a Light Bulb? Just One!

Zumen, billing itself as the most comprehensive Source-to-Pay software for product manufacturing companies, purports to be the connect between the Part Life Cycle, Product Life Cycle and the Procurement Life Cycle and offer you one platform to manage your entire Source-to-Pay Process through their Direct Material Life Cycle Management platform.

So how does it stack up?

Well, let’s start with the basics. The Zumen platform offers core functionality in five areas:

New Product Development

To support new product development, they have modules centered around:

  • product, part and material data
  • product & infrastructure planning

The core of any direct sourcing platform is its pats management capability, and the Zumen platform can track all of your parts, all of their versions, all of their associated programs, all associated product and costing plans, all associated sourcing events, all awards, all procurements, and all associated drawings and documents. With respect to part data, you can not only track every related code and cost, but all associated materials. With respect to materials, you can also track estimates, supplier, and market commodity price data as well as associated scrap rates and scrap value. When it comes to building cost models for parts, which can include tooling costs, the platform also allows processes to be tracked in the norms master (with associated machines, norms, and units).

The platform goes beyond just tracking parts, but also tracks inventory, blocks (internal commitments), commitments (from awards/contracts), and production schedules around the parts.

In the Zumen platform, product development is governed by a program that tracks production sourcing, supplier management, strategic sourcing, and procurement. The platform supports the definition of full programs at the final good level, even if that is an automobile or piece of construction equipment with 10,000 parts, assembly level, or part level. Like any good product management platform, it supports versioning and a full history. Programs can be imported from the ERP or engineering systems (like Windchill) or created in the platform from scratch. BOMs are placed inside a product hierarchy of product sectors, product lines, model families, models, and/or other programs, as appropriate. The bill of materials will support as many levels as desired.

Bill of materials are very extensive and go beyond just basic specifications, but will also track all costs and commitments at each phase of the bill of material lifecycle based on the associated program. This can include estimated and actual costs during initial product planing, production sourcing (during initial development), strategic sourcing (for mass production), the current procurement cycle (if the costs are tagged to indices), alternate part costs if there are alternate parts defined, and (alternate) quotations if there are associated quotations from suppliers.

Moreover, from the currently active programs, the platform can automatically extract the current material requirements plan to get a complete overview of the material requirements at the base level across all of the bill of materials, including the current delivery dates, which can be amalgamated and modified in the material requirements plan.

Sourcing

  • product costing and approvals
  • request for purchase
  • RFQ
  • budgeting & spend management

Cost estimates can be as high level or as detailed as the user desires. They can be high level models that simply break down the cost into material costs, production costs, delivery costs, and tariffs, or detailed models that break out the cost associated with each material, production processing step, service, transport leg, and delivery/trade charge. This can include tooling cost breakdowns, assumed minimum order quantities (for economies of scale), packaging, internal rate on credit, and other related costs.

Once a cost plan is complete, often after one or more suppliers have returned a quotation in a (production) sourcing event, a product cost approval can be created for formal costing approval.

At any time, a user of the platform can request a part or program for purchase for production sourcing or full (strategic) sourcing, and it will kick of an RFQ. The request will be pre-populated with all of the part data, and all the user has to do is define the volume required (which could be as low as a single unit during R&D or initial production sourcing or as high as a few million units during strategic sourcing for mass production of the product over the next few years). For production sourcing, the annual volumes are automatcally derived based on the program definition or the annual operating plan. The RFQ will be instantiated from a template that can be linked to the appropriate program classification, and the documents associated with the relevant commodities will be pulled in automatically as well when the RFQ is constructed. The RFQ can be limited to a single supplier, all suppliers who can supply the part, or a chosen set of suppliers. All associated documents, compliance requirements, NDAs, delivery terms and conditions, etc. that have been configured in the platform will automatically be included, as will the default manufacturing locations for delivery and product encodings.

During a production sourcing event, the buyer can also include details on the program, estimated annual volumes, estimated delivery schedules, current (buyer) (program) cost estimates, any associated (child) part details of relevance, and other relevant data. With proper platform configuration, all of this can be automatically included. When a buyer creates a sourcing event, they can access the entire part history for reference. They can also associate (internal) sourcing criteria with an RFQ, and when a quotation is returned, evaluate each quotation, and see the sourcing evaluations and score side-by-side with the quotations. (They can also see which documents have been returned and access any documents they need to for quotation and criteria evaluation). Note that the quotations have full drill-down capability even in side-by-side mode, allowing you to drill down to components of interest and roll back up for high level (assembly) overviews.

When an RFQ is returned, be it for production sourcing or full strategic (multi-year) sourcing, you can see the full quotation from each supplier, and compare them side by side, as well as comparing them to estimates.

These quotations can be used to create budget items, populate budgets, and update budget cycles (as budgets can be over multiple periods and associated with multi-year production plans). Budgets in the system can be at the part or program level, and, like purchase requests and quotations, be approved before finalized.

Procurement

  • purchase orders
  • accounts payable

Once the quotations have been returned and an approval has been completed, the buyer can create the relevant purchase orders to begin the sourcing process. These will then be sent to the suppliers for acceptance and/or requests for modification (if they want/need to split shipments), and once the suppliers accept the purchase order, they can send advance shipping notifications (ASN) when they are ready to ship.

Once the parts have been shipped, the suppliers can flip the purchase order into an invoice and send it back to the buyer, who will then receive it in the accounts payable module for processing.

Analytics and (Production) Monitoring

The platform contains a number of built-in dashboards for monitoring parts, programs, RFQs, production plans, cost estimates, budgets, inventory, and other platform capabilities. One of the main dashboards is the production dashboard that allows you to track total production over time from global production down to an individual part through drill-downs.

The platform also has some basic spend (analysis) dashboards for total spend and program/product cost analysis which, like the other dashboards, can summarize spend at the highest level across a time period of interest and allow drill down to a single part for a single date, and everything in between. The dashboard can also allow a buyer to drill into changes in product cost breakdowns over time. There is a similar dashboard for direct material spend, which can be global, program level, plant level, across all materials, a category, or a single material. And, of course, a dashboard that lets you drill into spend by supplier.

There are also a number of built in analyses around product costs which include, but are not limited to, landed cost analysis, import cost analysis, currency trend analysis, spend by plant, share of business analysis, and overall product cost analysis.

Supplier Management

Supplier Management is centred around supplier onboarding, information, quality (PPAP/APQP), and performance management. You can onboard a supplier using a customized workflow that collects the corporate, capability, and compliance information that you need to work with a supplier.

The Big Q

The real question is, does the platform fulfill its promise?

Let’s consider a minimal product development, sourcing, and procurement cycle.

  • Design
  • Development Sourcing
  • Design Finalization
  • Sales Projection
  • Demand Planning
  • Production Planning
  • Production Sourcing
  • Procurement & Fulfillment
  • Demand and Production Updates
  • Part Replacements and Supply Base Modifications
  • Service and Support

Through its new product development support, Zumen allows you to maintain product and part designs, including all historical versions, manage bill of materials in programs (and sub-programs), and ensure your sourcing initiatives are tied to design. With its RFQ support, deep cost models, and quotation comparison capability, development (and production) sourcing is well supported. You can import the projections from your ERP and do period based (month-over-month, etc.) demand planning and break that down into projection plans, which can be used to enhance production sourcing by providing potential suppliers with the demand breakdown over time. Once the awards have been made, they are tracked and purchase orders can be automatically or manually kicked off as needed. ASNs can be automatically received and tracked during fulfillment, demands and production plans can be tweaked at any time, part replacements tracked and associated with original parts, and associated services tied to the product/part awards.

Thus, Zumen really does manage the core part life cycle, product lifecycle, and procurement lifecycle in an end-to-end Direct Source-to-Pay platform and limits the number of additional best of breed platforms you will need to support your Source-to-Pay+ and supply chain management activities beyond the ERP/MRP and PLM. Key weaknesses are no scope 3 carbon tracking, which should be done at the part level to not only fully support EU requirements but allow for precise calculations, which is best done in the Source-to-Pay platform (and not a third party system) and supplier risk assessments (critical during qualification, and typically doesn’t live in a supplier discovery platform). While risk data should come from other platforms, the risk analysis should live in the supplier management platform to allow for not only performance tracking, but risk and compliance tracking. However, neither of these capabilities would be that difficult to build on the foundations they already have in place, so our bet would be that core capabilities for risk and carbon management will be added in over the next 12 to 24 months.

And, of course, if you are on the market for a new direct source-to-pay platform for product-development and direct product(ion) sourcing, Zumen is an option that you should add to your shortlist, especially in heavy machinery and manufactured parts industries (where the founder and his team have decades of experience).

One Hundred and Ten Years Ago …

The second remote control was demonstrated by Leonardo Torres y Quevedo (a Spanish engineer and mathematician) in the port of Bilbao in Spain, when he used his Telekino to guide a boat from the shore. The Telekino was a robot that executed commands transmitted by electromagnetic waves. (The first remote was Tesla’s patented “teleautomation”.) Even though this was the second example, it was the most important as it was built on Quevedo’s principles for wireless remote control operation that are still in use to this day.


What do you think LOLCat?

Don't Touch My Remote!

I Luv My Remote! I Evenz Sleep With It! Thank you Quevedo!

Will Resilinc Resonate With Your Supply Chain?

On Monday, we introduced you to Resilinc, a new player in Supply Management that provides a Decision Support System (DSS) for identifying and evaluating risks in your supply chain if you are in the high-tech, medical device, and automotive space and have vast multi-tier supply chains.

We noted that Resilinc is unique in that it is able to provide an overall risk score, delivered in terms of the relative revenue impact of a disruption, for each location and each product; give you the ability to determine the impact of an external event in a given location with respect to specific supplier locations and sourced products; and identify with locations and products are likely to be impacted by a significant event anywhere in the world as soon as it happens. But we didn’t address another aspect of why Resilinc is unique and why they might shake up the risk management space.

Resilinc was founded, and the technnology was designed, and built, by risk management practitioners in the high-tech / device supply chains, and they have added experts in the medical device and automotive supply chains. One of the difficult, and unique, aspects about risk management is the differences in impact and effect of a supply disruption across industries. In some industries, like automotive, bringing a production line back up is not as simple as getting the missing parts or raw materials; in others, like electronic manufacturing, it’s not as simple as substituting one microchip for another if they have different input/output and voltage specs; and in others still, like medical device, it’s not as simple as switching suppliers when one runs out of production capacity as the industry is heavily regulated and it is often the case that all suppliers must carry certain certifications and insurance policies. Without practitioners who understand the specific requirements, and the differing severities associated with each type of disruption, you never get the right models. And if you don’t have the right models, you have zero chance of producing the right metrics and measurements.

For example, the founder, Bindiya Vakil, has served as the Program Manager for Supply Chain Risk Management at Cisco and the Supply Chain Manager at Solectron. Summit Vakil has worked in product management and leadership roles in Brocade, Cisco, and 3Com.

In addition, they recognize the criticality of solid Supplier Information Management as a foundation, and brought in Jon Bovit, with a long history in SIM at Ariba, Aravo, and CVM, to insure they got their unique functionality-focussed SIM model right for the problem they are tackling, which is different from the problems the standard SIM players are focussed on. (For example, in risk management, it really doesn’t matter where the headquarters are and whether you spend 100K or 100M with the supplier. A hurricane could shut down the headquarters and have no effect on your supply chain but if a supplier is sole source, even if you only buy one part, and only spend 100K, if the absence of that part could shut down the production line, that supplier is still a huge risk if they are located in a high risk zone.)

And their CEO is formally trained in Supply Management. She has a Master of Engineering in Logistics from MIT with a thesis on Design Outsourcing in the High-Tech Industry and its Impact on Supply Chain Strategies. Not many companies these days have a CEO who is technically competent in what the company actually does. It is my belief that having a CEO who knows what the product has to do, and how it should do it, greatly increases the chances that the company will develop the right products. (Because when you don’t, you get devices that light-up when they’re off and drain the battery until they die, and million-dollar toilet paper dispensers that limit you to 5 squares. Don’t laugh. Both have happened.)

So while Resilinc, like all new technology platforms, may carry a technology risk, for those of you in the high-tech, medical device, and automotive industries, I believe that it is more likely that it will resonate with your supply chain.

Do You Know What’s At Risk? Resilinc Does!

Resilinc, a new player in Supply Management, has a unique approach to identifying and evaluating risk in your supply chain. Eschewing the transaction-and-finance focussed approach of other players in the risk management space, and building on the lessons learned from SIM (Supplier Information Management) vendors, Resilinc has built a unique approach to identifying and quantifying the relative risks in your supply chain.

Started by a Risk Management practitioner in the high-tech and electronics supply chain, who has a Masters in Engineering in Logistics (from the Massachusetts Institute of Technology), Resilinc not only builds on the lessons learned from SIM, but on the lessons learned from real risk management practitioners and specifically focusses on the electronics and high-tech, medical device, and automotive supply chain – realizing that, when it comes to risk, not all supply chains are created equal.

So what is Resilinc? It’s an affordable DSS (Decision Support System) for larger mid-size and large multi-nationals that need to

  1. identify the most significant risks in their supply chain,
  2. keep tabs on what facilities may be impacted by a significant external event, and
  3. be immediately informed when an event could cause a disruption that requires immediate action.

The solution, delivered using the SaaS (Software-as-a-Service) model, does this by tracking all of the relevant information on each supplier and facility in your organization’s multi-tier supply chain. Whereas a typical SIM solution (that powers a typical financial risk analysis product) will track each supplier, their official information, their insurance certifications, their corporate addresses, etc., Resilinc’s solution tracks each individual manufacturing facility, the products produced at those facilities, the inputs required, the lead times required, and the time taken to get the plant up and running again as a result of a serious disruption (such as a natural disaster, border blockade, strike, etc.). Based on this information, integrated financial and location risk metrics imported from other systems (for which you have a license for), and the relative revenue impact of each product on your total organization revenue, Resilinc is then able to

  1. provide an overall risk score, delivered in terms of the revenue impact of a disruption, for each location and product,
  2. give you the ability to determine the impact of an external event in a given location with respect to supplier locations and sourced products, and
  3. determine which locations and products are likely to be impacted by a significant event anywhere in the world, as soon as it happens (and e-mail you a notice that the event — which may be an earthquake, war, or labour strike — is potentially impacting one or more locations in your supply chain).

Risk Managers can use this to determine which locations and products have the biggest risks, which facilities will be impacted the most as a result of a supply disruption in an area, and which product (line)s are at risk as the result of an event that just happened. And then they can take action.

Resilinc is a powerful tool for the high-tech, medical device, and automotive supply chain, which, until now, were probably too reliant on financial metrics, which are not the only risks one needs to be concerned about in a multi-tier supply chain.