Category Archives: Retail

PRGX – The Biggest Analytics Provider You Don’t Know!

For those that do not know it, PRGX would appear to be one of a select number of dominant services provider in the niche market for recovery audit services — a market that unlike other procurement services faces tremendous price pressure for its core recovery, statement and related auditing and profit recovery services.

the doctor and the prophet, PRGX Intro on Spend Matters Pro (membership required)

In particular, PRGX would appear to be a recovery audit specialist for the global retail sector. And that is what they are, but that is not all they are.

PRGX has started to remake itself quietly from within — out of necessity, given these broader market trends — building and acquiring technology capabilities in the spend analytics and supplier management areas, both to expand its relevance and to start driving automation and scale in its core business.

PRGX has built the most complete, and in many ways the most advanced, analytics and recovery solution for the retail sector and, in doing so, has built one of the most complete and advanced analytics and recovery solutions for just about any sector that buys and relies on goods. Pharma, Manufacturing, and Aerospace and Defense, just to name a few, could all benefit intensely from the out-of-the-box PRGX solution.

This is because it has evolved it’s application from a simple recovery analytics application to a full featured analytics solutions with modules for:

  • Payment Analytics
  • Spend Analytics
  • Product Analytics
  • Recovery Avoidance Analytics
  • Supplier Information Management

With the latter two coming through its recent acquisition of Lavante.

It can analyze what you paid (payment analytics), what you should have paid (recovery analytics), what you are spending (spend analytics), how much that is costing you and profiting you on a product level (product analytics), and what suppliers are supplying that product and how they are performing (SIM with a hefty dose of SPM).

And it can do this analysis end to end around a product or category, and allow you to simultaneously see what you ordered, spent, overspent, took in on sales, lost on returns, and profited when all was said and done. It’s one of the most powerful analytics solutions you don’t know about. Stay tuned — there is more to come!

Learn from FedEx and UPS and Avoid Package Fail This Year: Part II

In yesterday’s post, we noted that 2013 retail saw a massive package fail with packages being delivered two weeks or later than expected. The situation was so bad that, as reported in The Washington Post, Amazon, UPS offer refunds for Christmas delivery problems.

We also asked what really happened, and how can all carriers learn. In our attempt to answer this, we noted that Jim Tompkins penned a good piece over on in the Tompkins International Blog on Realism and Final Delivery for Holiday 2013 where he noted that there were five really big factors that were going to impact final delivery and yet UPS and FedEx still failed to be realistic, practical, or pragmatic in communicating their failure to deliver on their promises for holiday 2013, even though both UPS and FedEx should have predicted all of the factors.

So how can carriers fix the mess they helped create? According to Jim, carriers need to do a better job at three things:

  1. peak planning
  2. contingency planning
  3. communications

And he’s right, especially where communications are involved (as the big shipping companies should have known by December 21, after being storm-stayed for 2 days, that they were in crisis and should have communicated that fact), but planning alone won’t be enough as next year could again bring the situation where the number of packages in the network overloads the entire capacity of the network.

So what do UPS, FedEx, and other carriers have to take away from this to avoid major package and delivery fails this year?

  • plan for peak
    At some point, unless you’re (on the road to be) going out of business, you’re going to hit peak capacity. Plan for it. Be sure you can operate at peak efficiency during this time.
  • plan for disruption
    Be it weather, strike, or some other unplanned natural or man-made catastrophe, you’re going to experience a major disruption — and, thanks to Murphy’s Law, it is going to occur at the worst possible time. Have contingency plans in place.
  • plan for partners
    Not only will the disruption strike at the worst possible time, but it will result in your load exceeding your peak capacity. At this point, you have two options — accept that some deliveries will be late (and some customers will be really upset and possibly leave you for your competition) or offload some of the load to a partner with whom you have a bi-lateral contingency agreement. For example, if UPS and FedEx would have planned ahead, they could have offloaded a large number of packages to traditional 3PLs and local delivery services who were both under-capacity and looking for work. In order to take advantage of peak season, retailers need their goods on the shelves by black friday. So, the carriers that deliver to retailers will have likely made their last delivery by mid-December. There’s no reason that they can’t be used as the long-haul carriers from DC to DC, which was a big part of UPS and FedEx’s problem. Plus, most local delivery services, that often make their living couriering documents and local office supplies, are probably not going to be that busy by mid-December when office managers and legal departments start going on vacation. They could pick up from a local DC and act as additional delivery staff — they just need a hand-held scanner. Similarly, when traditional carriers hit peak capacity in November and have problems making delivery times due to weather or equipment failures, excess could be offloaded to FedEx and UPS which often only hit peak capacity during the big retail rush.

Murphy’s law, with a little help from Mother Nature’s black swan, will insure that any carrier that does a reasonable job of running their business will hit peak, will get disrupted, and then will not have the capacity to recover without help — especially if the retailers do not do anything to dispel the myth that waiting until the last minute to shop online is a good idea. So plan for this, and line up some help as part of your disaster-relief contingency plan. Then maybe you won’t end up with a tractor trailer of egg on your face. Just a thought.

Learn from FedEx and UPS and Avoid Package Fail This Year: Part I

As summarized in Martin Murray’s Logistics/Supply Chain blog on, 2013 retail saw a massive package fail with packages being delivered two weeks or later than expected. The situation was so bad that, as reported in The Washington Post, Amazon, UPS offer refunds for Christmas delivery problems. (Specifically, customers of Amazon who failed to get their deliveries by Christmas day received $20 gift cards and refunds on shipping charges and UPS is refunding shipping costs. FedEx, on the other hand, is only going to work with people affected.) According to the Washington Post article, the delays were due to a combination of bad weather, shoppers waiting until the last minute, and the overwhelming surge in online buying. (A UPS spokeswoman said the volume of air packages in our system exceeded the capacity in our network.)

According to Mr. Murray, the situation with ordering from online retailers probably won’t improve next year, unless the major parcel carriers understand that people order late, they order a lot, and they expect it on time. SI agrees that an understanding will help, but only if they do something about it.

So what really happened, and how can all carriers learn? Jim Tompkins penned a good piece over on in the Tompkins International Blog on Realism and Final Delivery for Holiday 2013 where he noted that there were five really big factors that were going to impact final delivery and yet UPS and FedEx still failed to be realistic, practical, or pragmatic in communicating their failure to deliver on their promises for holiday 2013. What were the factors?

  1. 26 Days Between Thanksgiving and Christmas to Shop
  2. 26 Days Between Thanksgiving and Christmas to Deliver
  3. Growth of Online Shopping
  4. Retailers’ Behaviour
  5. Weather

As Jim notes, factors 1, 2, and 3 were based on fact, well-known, predictable and non-controversial. They pose significant challenges, but ones that have been around since the WWW, created by Bernes-Lee in 1990, began to be used commercially in 1991 (and definitely since and eBay launched in 1995). These should not have been that much of an issue.

Factor 4 could have been predicted too. As Jim notes, there is a clear sense among consumers that delaying online shopping is a good thing because the availability of great promotions and free shipping became more and more prevalent in 2011 and 2012 and there is no reason to buy early when it is better to wait and get a better deal. Since retailers did little to dissuade this notion, many consumers held out to the last minute to shop online hoping for a better last-minute deal.

And while the breadth of factor 5 can not be predicted in advance, there are recent precedents for bad weather that covers a wide geographical area several days in a row. As an example Jim reminds us that it was only nine years ago when an ice storm crippled Memphis and Louisville, resulting in major final delivery problems for Christmas — and with the effects of global warming (which exists, regardless of what overpaid scientists employed by mega corporations tell you*) increasing by the year, massive storms should be expected.

So what should carriers take away from this fiasco? Stay tuned for Part II tomorrow!

* With only a few exceptions, the average temperature of the earth has been increasing steadily for the last 30+ years. (See this graph from the NOAA.) Anyone who says there is no global warming is therefore a liar or an idiot. What is not known is the degree to which we are causing it with respect to pollution, etc. and the degree to which global warming is a natural part of the earth’s cycle — as an analysis of the history of the earth through extracted core segments shows that just like there were ice ages, there were also times of higher temperature. But the fact that some degree of global warming could be natural is not important — what is important is that this analysis also shows that when temperatures rise, droughts and natural disasters become more common and (mass) extinctions soon follow. Therefore, even if we are only responsible for a (small) fraction of the global warming that is currently occurring, we should be doing everything we can to minimize our impact!

BravoSolution’s Business Center 2.0 – A Complete Category Solution for Transportation, MRO, Temporary Labour, GPO Category Management, and Retail: Part I

Two years ago, we reviewed BravoSolution‘s Business Center Category Sourcing Solution that took e-Sourcing to a new level for nine common categories that provided the average Supply Management organization with a considerable sourcing challenge. In order to maximize savings in each of these categories, the organization needed to construct category-specific RFQs/RFBs for the category, collect extensive amounts of detailed data, build a tailored model, and/or analyze the impact of each possible sourcing decision. And if the RFXs were designed wrong, the data was incomplete, or the model missed key trade offs, the solutions were sub-optimal at best, and not even as good as the current supply management situation in the worst case.

That’s why BravoSolution built a solution that, capturing the years of experience and knowledge built-up by their global sourcing and solutions teams (who work out of offices in ten different countries on four different continents), that would allow a buyer to:

  • define an event of the supported type with the click of a mouse,
  • dynamically determine appropriate, and minimal, data requirements,
  • send the appropriate RFXs to the chosen suppliers with just a few clicks of the mouse,
  • push the data into the optimization engine,
  • add or remove (default and pre-defined) constraints with a few mouse clicks, and
  • select the award scenario and generate a contract template with a click of the mouse.

It was a great leap forward in e-Sourcing technology for the average buyer who was not an expert in e-Sourcing, and definitely not an expert in the chosen categories. But it had limits — specifically, out-of-the-box, it was limited to the categories that it supported or to categories for which repeatable methodologies could be identified and for which appropriate workflows could be implemented (as long as the buying organization was willing to work with the BravoSolution team to build a new category solution).

Knowing this, and knowing that certain industries had needs that were different than other industries, BravoSolution decided that what was needed was an equally simple solution that could be applied company wide (to all significant categories) for buyers in industries that needed extra support (either due to the complex nature of the problems, the time intensiveness of the categories, or the average level of e-Sourcing sophistication of the buyer in an industry where the average organization is arriving late to the advanced sourcing party). This is because BravoSolution realized that the reality of the situation is that if e-Sourcing is easy to use for some categories, but hard to use for other categories, the organization will continually favour the easy categories in their sourcing efforts, to the detriment of the organization’s cost savings or value generation goals. If a sourcing event is appropriately designed and effectively executed, and the organization has Procurement policies and systems in place to insure that the identified and negotiated savings are appropriately captured, most of the savings are going to be identified in the first event and the incremental return on subsequent events, especially in an economy where costs are going up and the supplier has more bargaining power, will be minimal. Meanwhile, more and more dollars will flow down the drain as savings-rich categories get continually ignored.

But if the sourcing team is presented with a solution where every souring event is as easy as every other sourcing event, intelligence is built in for all of the common categories, and existing data (such as supplier locations, contract transportation pricing, production constraints, etc.) can be re-used and propagated from one event to the next, then every category is going to be given equal consideration for the strategic sourcing treatment. And BravoSolution’s new and improved business center solution makes this a reality for the Transportation (3PL), MRO, Temporary Labour, GPO Category Management, and Retail industries.

In the remainder of this series, we will discuss BravoSolution‘s new business center solution, built on collaborative sourcing capabilities (that were covered in these posts on Collaborative Sourcing, High Definition Sourcing, and Category Excellence) for MRO, GPO Category Management, and Retail. Stay tuned. (We’ll be back at the same KaT time on the same KaT channel.)