In our last post, we “flipped it to the ‘C’ side, finished with the ‘B’ side , nothin’ on the ‘A’ side, so tired of the inside, to the ‘C’ side, to the ‘C’ side” (because, in the 80s, we knew that Cats Can Fly). This was because, while records have only A and B sides, we know that Supplier Management is not flat and is best described as a multi-surface convex polyhedral with many sides, including a C-side and a D-side.

While Part 16 and Part 17 focussed in on the more “classic” offerings in the SXM space which were very internally focussed, our last post, Part 18, focussed outward on supplier discovery and network management, because supplier management is pointless if the organization does not have the right suppliers. We also pointed out that once you have identified the right suppliers, in addition to managing them, you need to outreach and enable them to do better, so today we move on to the last side of supplier management, appropriately named the D-Side as many buyers still think of the supplier as the dark side of the force, when, in fact, the supply base is just the dark side of the moon, ripe with opportunity for discovery if we’d just make the effort to get out there and explore.

So, in our final attempt to dissect the CORNED QUIP mash, we will dive into Supplier Orchestration (SOM) and Supplier Enablement (SEM) and outline the remaining capabilities you should be looking for in a Supplier Management Solution if these capabilities are important to you (and they should be).

Now, we get that “the suppliers aren’t paying for the solution” and, as a result, most buying organizations (that aren’t forward thinking enough in our view) don’t care enough to pay for supplier-focussed functionality, and that this means that most vendors just aren’t bothering to build these solutions. However, industry leading buying organizations are waking up to the fact that you can’t employ all the best people and thus the organization needs to take advantage of all the intelligence in its supply chain. Similarly, thought leading vendors are working on solutions to enable the supplier to do more, which really isn’t hard to do as they built most of the communication and collaboration mechanisms into classical onboarding and collaboration and project management, and just didn’t bother opening these capabilities up to the supplier in the past. Today, the best vendor platforms are making the functionality ubiquitous between parties, and those are the platforms we think that you should be looking for.

Orchestration Management. (or Onboarding + Multi-Tier/Multi-Supplier capability)

Classical supplier management was designed to support management of, and visibility into, an organization’s first tier suppliers because that was thought to be enough to minimize risk, reduce cost, and ensure smooth sailing on calm seas in the days ahead. For a while, that was enough, but as the pandemic demonstrated more clearly than any event before, not having deep insight into the deeper tiers of the supply chain can result in significant disruptions across the organization’s operations, not just point based disruptions from the odd supplier failure or (increasingly occurring) natural disaster. Thus, newer solutions are supporting multi-tier supplier management through cascading invitations, onboarding, and management by the tier above and visibility down to the source material.

Multi-Tier Network Linkages

A key requirement for multi-tier supplier orchestration is labelled bi-directional multi-tier network linkages that allow a buyer to trace their supply chain through a supplier down multiple tiers to the raw material suppliers when needed and monitor all of those producing critical raw materials, and critical components one level up, for potential risk or disruption. This is easier said then done because a buyer should only see the relationships that are supporting their products and services, not the linkages used by their peers, so the connections have to not only indicate who is using who, and for what, but also on behalf of who. Similarly, a tier 1 supplier should not know that it’s tier 2 supplier is also serving/servicing its competitor unless the competitor or tier 2 supplier chooses to make that relationship public, so now we have to consider relationship type, relationship purpose, relationship reason, and relationship visibility. It’s a lot to think through for a software developer, especially if you want to build an uncertainty management solution on top of that and calculate impacts of delays and disruption up the chains if a tier 4 supplier can’t deliver.

Cascading Onboarding Support

When a tier 1 supplier is selected to provide one or more products to a buyer, it needs to define the tier 2 suppliers it is using that need to automatically be invited by the platform to onboard to help the supplier maintain insight into its supply base and provide that insight to the buyer. Similarly, when those tier 2 suppliers onboard, they need to define the tier 3 component / material suppliers they are using to provide their products / components to the tier 2 suppliers. And so on.
And when another tier 1 supplier uses the same tier 2 supplier, it needs to be invited to just provide the relevant supply chain view to that new tier 2 supplier, with tier 3 only invited if they are new or providing different products than are already registered in the system. Unless, of course, a tier 2 (or tier 3) supplier chooses to become a customer, then they can manage their entire supply base through the solution (and not just that which supports the organization[s] currently paying for it). Like multi-tier network design and support, this is also a lot to think through for a software developer, especially one that wants to quickly bring a simple app to market as a “MVP” that it can sell for money.

Multi-Tier Supplier Support

The platform has to be more than simple visibility to be useful. It has to support messaging, and collaboration, down and up the chain to determine if early warning signals represent potential problems and, if so, allow for collaboration between the tiers to address those potential problems and proactively define solutions. It has to enable relevant supplier management functionality to all tiers of the chain to be truly useful to a buyer trying to manage a particular chain, but do so only for that buyer as the reality is that if no one is paying, the business providing that solution will not be able to stay in business. In other words, it needs to enable most of the core functions, but not provide any non-paying organization with any ability to add suppliers beyond those indicated to support a given chain.

Enablement Management. (+ Engagement)

Orchestration is great, and key to managing not just the supplier but the supply chain, but what’s the point of orchestrating if you’re not going to take it to the next level and enable the suppliers to better serve you. Being able to see where things are, send messages, and get responses is great, especially since it can provide early warning signals of issues that need to be dealt with, but the point of supplier management should be more than reactive issue resolution. Good supplier management should focus on proactive improvement. And, most importantly, that improvement should not just come from the buyer.

(Supplier-Led) Innovation Support

As an organization, your goal should be continual improvement both within your four walls and within the four walls of your strategic suppliers. Considering that most of your products and services are sourced, they will not improve if the suppliers do not improve them. Furthermore, given that your resources are finite, how much time will you actually have for innovating and improving the products you source to sell. Very little or none. It’s critical that most of the innovation come from your supply chain (as that’s where most of the manpower, and hopefully brainpower, should be). Moreover, you shouldn’t have to push for it. Your suppliers, when they find opportunities for quality or process improvement, or efficiency improvements, should be free, and even encouraged, to make those suggestions and kick off innovation projects (under your guidance, of course).

There should be full featured support for innovation. Multi-channel synchronous and asynchronous communication. The ability to whiteboard, design at a high level, and store prototype and related files and artifacts from design tools. Put together project plans — with milestones, tasks, and owners — and allow for tracking, change management, and commentary. It should also support tracking of quality data and quality processes as well.

Sustainability Guidance

Sustainability is more than a buzzword, it’s a necessity if your organization wants to not only thrive, but even survive. First of all, with regulations consistently popping up everywhere all at once, you need to get ahead of the curve. You can’t wait for a substance ban, a new GHG tax, or a new documentary requirement to pop up before figuring out its impact on your supply chain and what actions you will need from your supply base to ensure compliance. You need to start working on sustainability as soon as you suspect a regulation is coming. But figuring it out on your own with everything coming at you from everywhere all at once is just too much for an average organization to handle. A great enablement solution will not only help you keep tabs on current and potential sustainability requirements, but also give you guidance on how to be more sustainable, regardless of whether a regulation is enacted or not. Over time, sustainability will increase the longevity of your business and decease your costs. The sooner you increase your utilization of renewable energy and resources, and decrease your usage of finite resources, the better off you will financially be.

Integrated Supply-Centric Portal

An enablement solution PUTS THE SUPPLIER FIRST. Let’s repeat that for clarity. It PUTS THE SUPPLIER FIRST. The problem with every single supplier management solution on the market is that it was designed for the buyer and the supplier was an afterthought. For most solutions, the supplier interface is poor, limited in terms of available functionality, and definitely not single sign on (even if the supplier is also a client of the vendor — in this case they will have one sign-on where they can see all their suppliers, but still have to access a different view for each buyer they serve).

If the goal is to engage with the supplier to help them help you, the platform needs to not only enable the supplier to do that, but be a platform the supplier wants to use. A platform where they have to login to 20 different views to support 20 different buyers is NOT one they want to use. A platform that limits their ability to interact with you; denies them access the same features and capabilities in terms of creation, collaboration, and project management; doesn’t allow them to manage their teams and their workflows on their own; that doesn’t adapt to how they work is NOT only one that they don’t want to use, but also one that does NOT enable them.
The Supplier Enablement Platform should be so good that not only does every supplier want to buy it to manage their full supply base as a buyer, but one that they tell buyers without a good supplier-based supply chain management solution to look at because it supports them. This is where SXM platforms need to go if they want to be true enablement platforms, and the doctor will tell you that, despite all the marketing, he’s yet to see an engagement or an experience platform that does all this and puts the supplier on equal footing with the buyer across the platform and first for enablement. The first platform to truly do this will change the game, and change it in a way that will ultimately benefit the end buyer in the supply chain the most. (And who cares if the end buyer is paying for it at first, that buyer will reap benefits that will be many times the platform cost as their production costs predictably stabilize, the efficiency improves, their quality increases, and their sales go up as a result.)

This concludes our discussion of the D-side, the dark side, because, unfortunately, most Supplier Management (SXM) vendors still aren’t shining a light here and building the next generation capabilities these platforms truly need. A few are starting, but they have miles to go.

Next up, a partial list of SXM companies to look at. (All do SIM to some extent. As for the rest of the CORNED QUIP, you will have to do your homework. None are SCORNEDQUIPM.)

We know records only have A and B sides, but Supplier Management is not flat, it’s a multi-surface convex polyhedral and, as such, it has a C-Side. If today’s cat’s could fly, they would be “flippin’ to the ‘C’ side, finished with the ‘B’ side, nothin’ on the ‘A’ side, so tired of the inside, to the ‘C’ side, to the ‘C’ side“. (Confused? Back in the 80s, it was the case that Cats Can Fly.)

As discussed in Part 16 and Part 17, having identified Supplier Management as the next solution after Spend Analysis, we quickly realized that identifying the right solution would be difficult as supplier management has as many aspects on its own as Source-to-Pay (S2P) has. Not only do we have to decide upon which core capabilities in the CORNED QUIP mash are important to our organization, but we have to make sure that the solution covers the baseline requirements for each capability that is important. Our last two posts reviewed the more “classic” offerings in the SXM space which, as you may have noticed, had one thing in common — they were all internally focussed on supporting the buyer with managing the current supplier base in some aspect.

SIM was collecting the information and, hopefully, providing the SMDM foundations for the buyer’s S2P applications. SRM was managing the relationship for the benefit of the buyer, and while it may include collaborative elements, all were meant to serve the buyer, not the supplier, who would only benefit if the benefit served the buyer. SPM was managing the performance of the supplier using buyer-centric metrics. SCM was ensuring the supplier adhered to government, regulatory, and industry regulations. SQM was about ensuring the supplier met your quality requirements. And, finally, SUM was managing your uncertainty and risk as a buyer, supplier be damned.

And that’s why we need a C-side (and a D-side). First of all, as a buyer, you may not have the right suppliers for your organization. And if this is the case, there’s no point managing them when you should be finding, and managing, other, better, suppliers. Secondly, the best supplier performance results from the best plans and processes, which are those processes best suited to the supplier, and those are usually a result of supplier collaboration, interaction, and suggestion. Plus, relationships grow when both sides grow, and classic SRM solutions do not enable the supplier.

Today we dive into the two (2) primary C-side capabilities, Network (SNM) and Discovery (SDM) management, which are key to building a better base of suppliers (and supply).

Network Management.

We’ll admit that the concept of a “Supplier Network” is not new, as many providers have been claiming to have them for well over a decade, although we’d argue that the “networks” they were selling were not true networks as they were closed, still organized entirely for the buyer’s success, and extremely focussed on a single organization, or collective. It was not a “network” in any sense of the word except it was the word chosen by the marketers to massage their message into one that was hopefully mesmerizing to the marketplace. Network is much more than centralizing a bunch of suppliers in a directory and opening it up to an industry. Much more. And, unlike a decade ago, we’re happy to say that some vendors have decent capabilities as well as decent network sizes.

Open

It’s not a network if it is restricted to the set of suppliers you are currently, actively, doing business with. That’s just a directory. It has to, at least, contain all the suppliers that you could be doing business with (as that’s a key capability for discovery, but note that a network is just a foundation for discovery and not everything you truly need for discovery). It also has to contain all the suppliers your suppliers are doing business with (as that is required for orchestration, a key emerging capability in supplier management). And, most importantly, it must allow new suppliers to join at their pleasure as well as yours. A closed network is not helpful. Plus, you have the foundations for a closed network already in your SIM (even if you don’t realize it).

True Bi-Directional Graph Support

The original “networks” were primarily designed for one-way communication from a buyer to a (potential) supplier. But that’s NOT a network. The definition of a network is a group or system of interconnected people or things that allows for bidirectional communications. That means two way communication! A modern network needs to allow any party to communicate with any other party. Suppliers should be able to find potential buyers as well as potential suppliers to them as well as potential partners who can help with services or even production augmentation.

Extensive Bi-Directional Search Support

The network needs to support extensive search across all fields of all entities and allow any entity to search for any other entity for any purpose of interest. Buyers should be able find suppliers that (claim to) specialize in carbon steel cladded pressure valves with thickness > 100 mm for heat transfer in hot water based heating systems and suppliers should be able to find buyers in the solar power heating industry. Detailed search by products, capabilities, location, and so on.

Anonymous Statistics, Classifications, and Reviews

The network should collect data on how many active relationships there are, how a supplier (and its products) have been classified by buyers, and anonymized reviews on performance and overall ratings. Similarly, it should collect data on how a buyer is classified by suppliers, and anonymized reviews on performance and obligation management of the buyer by (verified) suppliers.

Verification and Trust Support

The network must verify that entities on the network are real, and before reviews are allowed to be posted (and then anonymized into overall reviews and ratings), the other party (that must already be verified on the network), must verify the relationship. The network should require relationships to be disclosed when they begin, and must keep reviews completely private until the relationship is disclosed. To ensure honesty and transparency, the platform should limit access to certain functionality (e.g. ratings, project based collaboration, etc.) until a relationship is confirmed. The network functionality, and specifically the verification functionality, must be designed to engender trust and truthfulness on the network. A network that is not trusted will, ultimately, not be used.

Discovery Management.

Innovation, and even renovation, requires rejuvenation. An organization needs to regularly find new suppliers with new technologies, methodologies, and ideologies in order to constantly improve itself. As a result, discovery is critical. But unless you are part of a supplier network that contains suppliers you aren’t using, you can’t do discovery at all. But, and this is the kicker, no network will contain every supplier as most suppliers won’t join a network until “invited” by the buyer (and then only if the buyer mandates it for the supplier to do business with that buyer), and often the supplier that is missing is the one the buyer needs.

Location, Product, Capability, and Other Targeted Searches

Along with deep filter capability. Most networks support basic searches, but if there are hundreds to thousands of suppliers, a buyer can’t review, and thus can’t invite, them all just to find out that most of the suppliers aren’t (currently) right for the organization, so there is a need to do very precise, targeted, searches to uncover the suppliers that are most likely to be the most relevant to the buying organization today. Deep filters and drill downs on a result, and the ability to define similar or like searches, and filters, using existing top-rated suppliers, products, etc.

Open Search beyond the organization, the community, and the active supply base

If a network is built up only from the suppliers the buyer, or the vendor’s customers, are actively using, that’s not going to contain all the relevant suppliers out there and the likelihood of discovering new suppliers over time is going to quickly trend to zero. If it’s open, and suppliers can join on their own, that’s better in theory, but the reality is that there are so many “directories” and “networks” out there, the supplier is not going to join unless that supplier wants to do business with one of the buyers who only uses that network. As a result, the likelihood of finding a relevant supplier over time, while not zero, is close to zero. A discovery platform has to be constantly scouring business registries and relevant sites to identify new suppliers, collect the data, use various sources to cross validate the supplier’s existence and, if a beneficial owner or official email can be identified, invite the supplier to proactively register, verify, and enhance their profile WITH a sampling of relevant buyers to them on the discovery platform, where they would be presented as potential suppliers.

Proactive web-search and web-site monitoring

Not only should the discovery platform be regularly scouring registries and likely sources for new suppliers, but new website registrations (that might soon be backing registered businesses) and new websites to collect additional relevant data. Also, it’s important to keep the database up to date because you don’t want dead suppliers, which means that registries and websites should be checked at least annually for unused suppliers, and more often for regularly used / contacted suppliers as an out of date website, a significant employee count reduction on LinkedIn, and considerably less activity on social media could indicate the company is winding down or in trouble (well before it is marked as inactive in a registry, which tends to only happen on nonpayment if an official registry, and sometimes doesn’t happen at all in other registries).

(Anonymized) Statistics, Ratings, and Reviews

Anonymized statistics, ratings (even if Y/N for a capability), and reviews such as how often the supplier is selected for a shortlist, reviewed, awarded, and rated is very useful criteria for a buyer who is looking for a supplier that might be more appropriate or less risky. Ratings on skills, customer support, etc. would also be quite useful. Detailed reviews on capability, performance, product quality, and capability are also very useful. Buyers need to know more than just that the supplier exists and provides product X and service Y. They need deeper insight when given a bevy of options but no clear way to differentiate between ten potential suppliers that are new to them.

Also, as you may have guessed by now, the best discovery product is built on a network and two of the best uses for a network are discovery and collaboration. The two go hand-in-hand, because, frankly, the C-Side supports Collaboration.

But we’re not done yet! Come back for Part 19 where we flip it to the D-Side!

Having identified Supplier Management as the next solution after Spend Analysis, we quickly realized that identifying the right Supplier Management solution would be difficult as supplier management has as many aspects on its own as Source-to-Pay has. Not only do we have to decide which core capabilities in the CORNED QUIP mash are important to our organization, but we have to make sure that the solution covers the baseline requirements for each capability that is important.

In our last post, Part 16, we reviewed three (3) classic features of Supplier Management. Today we will look at the next three (3) in the hopes that when we provide you a list of vendors later in this series, you will have the basic information you need to properly evaluate the vendors that choose to return the RFP that you send to them. Let’s get to it.

Compliance Management. (GRC)

Supplier Compliance Management (SCM) address the compliance, and often the Governance-Regulatory_Risk-Compliance, aspects of the supply base in an effort to ensure compliance from the source. In today’s ultra-complicated global regulatory environment, it’s hard to keep on top of everything a company has to be in compliance with from a product and operational perspective, especially when it produces goods in one country, transports through intermediate countries (which require strict compliance with ALL local laws if you are not transporting through a FTZ), and then sells the product in ten other countries. This is where you either need a huge amount of manpower, or technology. Plus, while some violations amount to nothing more than a small fine (which is often cheaper than hiring the manpower to dot the i’s and cross the t’s), violating anti-trust, human trafficking, banned substance, or debarred/prohibited/banned companies can land an organization, and in some countries its C-Suite, in major trouble. For many companies, this is one of the most overlooked, but critical, elements of supplier management.

Integrated Regulatory Requirements & Guidance

The entire point of a compliance solution is to ensure that the suppliers are complying with appropriate government regulations to ensure that the organization doesn’t get in trouble for something a supplier did (which the organization can get in trouble for if the supplier has slavery or human trafficking in their supply chain, uses banned substances in the product, engages in bribery, and so on). The providers of the solution should be extremely familiar with the regulations in each country their solution supports, should encode all of the information that needs to be tracked and checked, and should capture all of the information needed to ensure the suppliers are being compliant with the necessary regulations, based upon the buyer’s geography, the supplier’s geography, and the products the supplier is making on behalf of its buyers.

Automated Tracking and Alerts on (Potential) Non-Compliance

A buyer doesn’t have time to log in to a system everyday to check what’s going on with current suppliers and current projects, nor should they have to manually update reports and status checks. The system should automatically be pulling in all necessary data for monitoring from both internal and external systems at the frequency those systems are updated (although more often then daily is typically not necessary if the system the data is being pulled from updates the public / available data more than once a day), updating the affected models and status checks at each pull, and immediately alerting the buyer through email, messaging service, and/or any internal project management system the buyer logs into daily (through an API integration) if a supplier is in non-compliance with a critical regulatory requirement (that could get the buying organization into hot water).

Custom Regulatory Requirement Support

No SCM solution is going to support every regulation out of the box, especially if it is both industry and locale specific to just one country that the majority of the provider’s client base doesn’t do business in. However, if your organization does business in that country and is subjected to that regulation, you need to ensure compliance, and you don’t want to use another tool to do so. Thus, it’s critical that the platform support the definition of additional regulations, the requirements that need to be tracked, the data that will indicate compliance or non-compliance, and where that data will come from. Then, the platform can be extended to meet all of the organization’s compliance needs.

Quality Management.

If all a company (like a retailer) is buying is commodity goods or fixed services, and one supplier can quickly be switched out for another, quality management may not be that important. However, if a company is reliant on selling custom, or customized, manufactured goods or systems, quality is critical. If the organization gets a reputation for selling products that don’t work, or if the warranty costs skyrocket, the company could be in serious financial trouble. Internal Supplier Quality Management (SQM), vs relying on a supplier or a third party, is critical.

Support for at least one major PIP: Six Sigma, Kaizen, PDCA etc. (PIP: Process Improvement Paradigm)

Quality doesn’t just happen, it’s the result of a best-practice manufacturing process such as Six Sigma, Lean, Kaizen, or PDCA (Plan, Do, Check, Act). (There are more.) A good quality management platform will support at least one of these process improvement paradigms, and preferably support the PIP typically used by your organization and/or your preferred suppliers. (It should support multiple paradigms, but no one platform will do everything.) It should be easy to instantiate instances of the process and customize it for the project at hand.

Support for at least one major vertical specific Quality process: APQP, DFSS, 8D, etc.

In some verticals, and/or for some suppliers, you will need to use very specific quality-based manufacturing processes such as Advanced Quality Product Planning, Design for Six Sigma, or Eight Disciplines. These processes are used for particular products and need to be supported for the design, or analysis post-design / prototype manufacturing, to try and discover what didn’t work as planned. The processes should also be customizable for variances used by the organization.

Quality Specific Metric Based Tracking and Benchmarks

It should allow for the definition and tracking of metrics specific to quality, as well as the creation of organizational benchmarks by supplier and category, and pull in any necessary data from other systems — the user should not have to punch out to a performance management application just for this. If you can’t track quality improvements, or lack thereof, then you can’t actually manage quality.

Uncertainty Management. (Risk)

Supplier Uncertainty Management (SUM) is the next generation of a supplier risk management solution. Why uncertainty? Firstly, by the time you detect a “risk“, it could be too late. If you don’t see that iceberg until it’s too late to steer the ship, you’re going down. The key to success in risk management is to identify uncertainty, detect leading indicators, investigate, and, if necessary, initiate action early. And while you may get a lot of warnings that don’t require any (immediate action), it’s better than not getting that one warning that the one critical control chip that can only be made by that one supplier is not going to materialize in six weeks because the supplier’s plant was just shut down by a fire (that they decided against telling you about). In this situation, you’re going to need every single day you can get to identify substitute designs and chips you can order from other suppliers to create alternate, acceptable, products to fulfill your orders or risk losing customers. Secondly, SRM is already taken as an acronym. (Note that, over time, a good solution will allow you to adjust the thresholds and the warnings the solution produces so that the majority of alerts you get actually need some sort of [immediate] action.)

Low-Code/No-Code Open API Based Data Integration

The old age that you can’t manage what you can’t measure is true, and it’s doubly so where risk or uncertainty is involved. You need a lot of data, metrics on that data, benchmarks and historical trends to compare against to detect uncertainty before it becomes certain disruption. And it doesn’t matter how many data feeds are “out-of-the-box” because they will never, ever, cover everything you need now and definitely will never, ever, ever cover everything you will need as new regulations arise, new suppliers enter the picture, new software products enter your corporate ecosystem, new events happen in the world, and so forth. You need to be able to quickly and easily integrate the data you need when you need it, dynamically extending the schema as necessary to support it and altering the uncertainty detection models as needed to take the new data into account.

Built-In and Custom Metric-Based Risk Models

It’s hard to detect a potential issue before it occurs without a lot of data, and models that appropriately process that data to identify trends or patterns that have typically (with reasonably high probability) led to disruptions in the past when those trends or patterns emerged. And it’s harder still to create those models if you just don’t have the expertise in risk-based modelling. As a result, the platform should come with a number of standard, built-in, models for the industry you’re in relevant to you and your tier 1 suppliers. However, every organization’s situation is slightly different in terms of its geographic location, size, primary customer market, primary supply market, reliance on certain products or manufacturers, reliance on certain raw materials, and so on. So, while each company in an industry will generally face the same risks, the probability of a specific event occurring, or risk materializing, will be different. As a result, many of the models will need to be tweaked. Furthermore, if the company is introducing a new product type or line of business, that could come with unique risks, the organization may need a custom model built from scratch. Plus, as new regulatory requirements, good and bad, rear their ugly heads, it’s important to identify which suppliers could be at risk of not being able to meet them in time so that the organization can either proactively work with those suppliers to address the new regulatory requirements or find new suppliers. Flexible modelling is everything.

Semantic and Sentimental News and Event Monitoring (Integration)

Not all relevant data for identifying uncertainty in the supply chain, or supply base, is numeric. Some of it is semantic, and contained in news stories about events that directly impact the supplier or indirectly impact its customers in other countries. If a flood takes out the local power station, it’s out of operation until the flood subsides and the power station is repaired. If that’s two weeks, and it takes the supplier two weeks to minimally repair its plant and start production again, the supplier is out for a month. If you were expecting your order in five weeks, it’s not happening. A border closure for political reasons will cut off your supply, and if you’re the only foreign customer in your country, the supplier may not be aware until it tries to ship. Semantic news and event monitoring is critical, either internal to the product or through a subscription service. Also, if sales are highly dependent on brand perception, semantic monitoring of social media is highly critical because if brand perception drops, sales will drop, and the organization will have to quickly reduce future orders or get stuck with excess inventory, which it will lose out on when it has to fire-sale that inventory to avoid (environmentally damaging) dumping.

Customizable Alerts and Triggers

The models need to be continuously re-run as relevant data enters the system (which should be daily) and the user alerted to a change that is significant or exceeds a threshold. Rush fans have known for forty (40) years that a distant early warning is key because that’s just the tip of the disaster iceberg. Moreover, the organization should be able to define it’s own thresholds and change tolerance as its experienced engineers and product managers will know when they should at least be taking a quick look behind the curtain to see if it’s just a temporary loop or the beginning of a downward spiral that needs to be intercepted and prevented.

In our next instalment, Part 18, we’ll move on to some of the newer, or at least broader, capabilities emerging in the Supplier Management landscape.