Category Archives: Marketplaces

Bravo Business Center 2.0 – A Complete Category Solution for MRO: Part II.1

In Part I, we discussed how BravoSolution, realizing the limitations in their original, ground-breaking business center solution, enhanced the solution to be a complete solution for certain verticals that have standardized, predictable workflow-driven processes at the heart of their categories. We discussed how they transformed a solution that was a complete category management solution for nine (9) somewhat disparate categories, to a complete vertical solution for five different verticals (with more coming in the future) that was based on the collective decades of experience of their global sourcing team (working out of ten offices in four continents) in those verticals.

MRO, short for Maintenance, Repair and Operations, is a vertical that’s almost tailor-made for a business center solution. Even though, as a category, it is one of the broadest categories imaginable as it has to deal with whatever is required to keep any and all electrical, mechanical, hydraulic, telecommunication, or other physical system operating at normal levels — be it a production line, telecommunication backbone, power center, water plant, ventilation system, or office building — from both an (emergency) repair perspective and preventative maintenance perspective. As a result, depending on the company in question, the category could include just about any product or service under the sun. However, unlike CPG categories, the organization is generally not sourcing in volume and not looking for production capabilities, innovation capabilities, partnerships, or other value-adds that are required for success in those CPG categories.

As a result, MRO success often depends not on identifying the supplier who can give you the best price at the best service level on a part, but on identifying the supplier who can give you the best average price at the best average service level over a large market basket of parts, or the supplier who can bundle the services associated with installing a related market basket of parts (as part of preventative maintenance) at a competitive rate (which not only reduces the direct costs of having to deal with two different suppliers for parts and services, but the indirect administration and communication costs).

In addition, MRO suppliers tend to quote differently than volume-based manufacturing production facilities. Manufacturers will often quote based on production tiers, or give flat discounts or rebates based on production volumes for a single product, whereas MRO providers provide list pricing, and then quote discounts based on total dollar commitments across a market basket (as individual volumes for most categories aren’t enough to merit much of a discount).

Other complexities with MRO revolve around the sheer amount of data that needs to be captured, the creation of the right market basets, defining the qualitative metrics to appropriately capture the service levels of interest, defining the equations that appropriately trade off cost vs. quality vs. service level, and defining the cost drivers for the high-priced categories that will define when costs can change in a multi-year contract.

At a large MRO company, there will be thousands of products and services that need to be quoted from dozens, if not hundreds, of suppliers. Just creating all of the required data sheets that need to be distributed to the suppliers will be a challenge, breaking them down into baskets, sub-baskets, or items with alternate specifications for the sub-set of suppliers who will only bid on a sub-set of the RFX a nightmare. For some categories, service metrics are more important than cost. For example, if an automotive production line goes down, that can cost a large automotive manufacturer seven figures a day. In this case, spending an extra $10 an hour for a service provider with a guaranteed on-site service time of 4 hours vs 8 hours is a no-brainer. Even if their cost is substantially lower, service providers who cannot guarantee a required response time can not be considered for an award in some categories. In other categories, service levels, while important, can be traded off against cost. Consider warranty repairs. A five day turnaround vs. a seven day turnaround for a returned consumer item makes very little difference to a consumer that is out of a provided product for almost a week anyway, and trade-offs can be made in cost and service level. However, these trade-offs need to be evaluated in an appropriately defined equation. While a five day vs. seven day turnaround is almost equal, a five day vs. a twenty-one day is not. Unless the twenty-one day repair cost was high double-digit percentage cheaper than the five day, an organization wouldn’t risk the customer animosity that could result. And, in some categories, costs are driven by market conditions. If the service provider is supplying mostly steel parts (of 50% or more purity) that it has to source every year, and the steel index rises 10%, then the supplier will have to raise its prices (by at least 5%) to break even. Such a supplier cannot enter into a multi-year contract and give you it’s absolute best price today unless there is a cost-correction built-into the pricing model (as it would have to eat the loss otherwise).

In other words, the MRO category has some unique peculiarities that can make using a traditional sourcing solution a royal pain in the backside as the huge amount of set-up alone can be daunting. And if the solution doesn’t allow at least some of the work to be templated and re-used, the buyers will soon revert to the classic three-bids-and-a-buy through an auction just to “git-r-done“. But with BravoSolution’s Business Center, the basic templates are ready to go and once an organization uploads its item list, market baskets, list pricing for each supplier (and current / previous bid discounts), and current contracts; defines it’s service level equations and cost-vs-service level trade-offs; and defines its bidding guidelines and key milestones, a basic event is ready to go — and incumbent suppliers don’t even have to provide a price list (if the current price list in the system is still accurate), just their discounts for being awarded certain market baskets or dollar levels. In tomorrow’s post, we will dive into the BravoSolution MRO Business Center.

Vinimaya: Taking Their Procurement Marketplace Global, Part II

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.

Vinimaya: Taking Their Procurement Marketplace Global, Part I

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.

DropShip Commerce Brings Drop-Shipping and e-Commerce Enablement to the Distributor and Retailer Masses

On Monday, we announced that BizSlate Just Released its ERP for Mid-Sized Distributors and Retailers that gave the masses a useable, and affordable, ERP solution with exceptional supply chain support — especially where inventory and order management were concerned. With the BizSlate ERP, it’s a breeze for a retailer to order hundreds of variants of dozens of SKUs with a few mouse-clicks and keystrokes and to see inventory requirements at any point in time in the future. And this is great for inventory and storefront management, but what about the e-Store?

As more and more retailers need to turn to online sales to compete in the new marketplace where a consumer can get almost anything she wants online — and do so within two days, as the bigger retailers, following Amazon’s lead, are now packing and shipping same-day if an order is received by the cut-off time — the mid-sized and small retailers have to offer the same convenience or get pushed out of the market. Also, sometimes the only way to survive is to create a unique shopping experience for a niche market and offer all of the products, and only the products, related to that niche through a single, customized storefront. (For example, maybe the way to survive is to cater to the fantasy gaming enthusiast and provide a unified storefront for all of the relevant card games, board games, video games, RPGs, and spin-off/related novels and/or movies when the shopper might normally have to go to a local comic/game shop, book store, and online DVD store to find the items of interest.)

However, this need to both integrate (live) inventory (feeds) from dozens, and sometimes hundreds of suppliers (like Amazon) does, and then parse a customer order into separate orders for each vendor that is supplying an item to you and sending it direct to the consumer through its drop-shipping capabilities poses an integration nightmare for the average e-tailer. The reality is that every supplier will have a different database format / taxonomy and every other supplier will have a different access method. One (group of) suppliers will provide access through an FTP site that will contain inventory exports (in a multitude of raw or compressed file formats), another (group) will provide database access through a secure tunnel, the more technical will provide a web API, and the non-technical will e-mail spreadsheets. Some will use (a variation of) CSV format, some will be on an (old) version of EDI, the more techie will have an XML format, etc. Nightmare!

But this is only a quarter of the challenge. The inventory files need to be processed and the relevant data pushed to the live site, after a human has selected or verified what items need to be pushed. Then, the orders need to be pulled from the live site, parsed, and the proper data pushed back to the suppliers for (drop) shipping in the required time-frame — in the format required by the suppliers.

In other words, today’s small-and-mid-sized e-tailers need a solution that makes it trivial to get inventory manifests (if you will), process those manifest, select (groups of) product(s) for the online store, (create a schedule to) push those products to the store, define rules for parsing orders and pushing them back to the appropriate suppliers (on a schedule), create the requisite e-documention, and push the documents to the vendors and the order management systems.

This is the system that DropShip Commerce provides, and it’s the first solution that the doctor has seen that solves the round-trip mid-market problem in a manner uniquely tailored to the specific needs of retailers and their drop-shipping suppliers. And like the other modern SaaS solutions on the market, it’s slick, quick, and very easy to use. By targeting a specific, relatively unaddressed, problem for a specific vertical (consumer-oriented retail), like BizSlate, they were able to create a unique solution that is just what the average mid-sized e-Tailer needs. The DropShip Commerce solution is definitely something the average mid-size e-Tailer that sources from multiple suppliers needs to check out if they haven’t already.

Hiperos – It’s So Hip To Be Square with 3rd Party Management! Part II

Hiperos provides a SaaS platform that allows an organization to manage the entire 3rd party lifecycle, which consists of registration, data collection, segmentation, control automation, assessment, management, and collaborative issue resolution.

Hiperos includes your standard SIM (Supplier Information Management) functionality that allows for supplier self-service registration and profile maintenance and data integration from third party sources. On top of that it implements a user-configurable rules-based workflow that allows third-parties to be segmented into different buckets that represent the different programs that they need to be subjected too – be it FCPA, REACH, WEE, HIPPA, or some other type of compliance or monitoring program. Each bucket has its associated monitoring rules that notify the third party when more information is needed and that automatically alerts the user when a violation is detected or when information is not provided by the third party in a timely fashion. Assessments are automatically run every time new data becomes available and can be run by a user at any time. The fact that all relevant third party information is available at all times allows users to pro-actively manage third parties, and associated risks, and then either work with third parties to mitigate risks, if the potential infraction can be corrected, or cut them loose if the risk of association is too great (because they showed up on a denied party list or use child labour in their supply chain).

The application, which loads the default user-defined dashboard, allows a user to manage third parties, engagements, relationships, products, and programs and to define programs, vendor communities, reports, and analytics.

The dashboard is multi-tabbed and allows a user to define relevant views on each of the application areas defined above, as well as a default dashboard that allows the user to see the information most relevant to him or her. At the top of the dashboard is a link to current action items that allows a user to quickly see what needs to be done in third party management, engagements, programs, etc. The dashboards can be configured using hundreds of pre-defined (reporting) widgets or the user can define their own widgets by defining appropriate reports in the reporting module. And the user can bring in real-time news and data feeds from sites of interest.

The application can track any compliance, performance, sustainability, or risk data elements of interest and, like any good SIM platform, is preconfigured to track hundreds of relevant data items, depending upon the programs you define as relevant for a given compliance, performance, or risk program (which minimizes the amount of configuration required to track custom fields). And not only is all relevant data available from any view that is program or user defined, but it’s all interlinked so a user can click on a third party included in a program, see the relevant report(s), and then dive into the third party data management screen to examine the raw data elements, and then run a report on just a data subset.

Program definition is flexible and allows for any type of compliance, risk, sustainability, or performance program you can think of. In addition, the fact that Hiperos also supports contract meta-data and third-party data feeds allows financial impact reports to be generated. That way, a user always knows what the impact of a third-party falling out of compliance is to the organization. Knowing that a tier-one supplier might be buying from a tier-two supplier that might be using child labour is one thing, but knowing that the organization is spending 20 Million across 5 categories on that tier-one supplier is something else. In the first case, the supplier is put on the “investigate” list and someone gets around to it when they get around to it. In the second case, the user knows that it is a high priority and an investigation has to be started immediately as the public backlash will be extremely damaging to the organization if it gets out that 20 Million is being spent on products and/or services that were partially produced by child labour.

Hiperos has also included extensive color-coded geo-mapping capabilities so that you can quickly see, for any program, where the highest risk areas are globally and dive in. While Hiperos is not the first company to do this, they have latched on to the fact that the visual representation of risk or non-compliance by region allows one to quickly see what regions have to be monitored. This allows resources to be properly applied, especially since proper monitoring will typically require subscriptions to appropriate data feeds for those regions.

The Market Intelligence capabilites are quite extensive too, and they have pre-configured watch-lists, diversity monitoring, parent-subsidiary monitoring, subcontractor monitoring, REACH/WEE monitoring, and dozens of other feeds of interest which can be enabled as required by the client.

And the analytics piece supports the full suite of slice-and-dice capabilities found in most sourcing products today, so that you can dive into the data and find out which suppliers, categories, or programs represent the highest risk to your organization.

There’s quite a bit of data, and the application can be quite busy at times, but Hiperos has one thing right, where compliance is concerned, it’s Hip to be Square.