Category Archives: Technology

High Definition Sourcing – BravoSolution’s Next Generation Sourcing Paradigm

In last week’s post on Next Generation Sourcing, we discussed the need for a modern Supply Management Organization to either take its Sourcing to the next level or suffer decreasing returns. We then said that the starting point for most organizations was the acquisition, and utilization, of a modern e-Sourcing (2.0, if you will) platform that will enable an average Supply Management organization to “knock it up a notch” (even without the aid of a spice weasel).

One solution that can be used to take a Supply Management organization’s e-Sourcing to the next level is the new version of BravoSolution’s Collaborative Sourcing suite, which was first reviewed here on Sourcing Innovation last year when it collaboratively optimized its way onto the doctor‘s short list (and again in a post that described how its analysis and supplier performance management enabled contract compliance). BravoSolution was one of the provider’s that didn’t stand still last year (which was a quiet year from a market perspective).

BravoSolution has realized for a while now that Supply Management cannot meet the strategic objectives of the business if:

  • the requirements of stakeholders across the business are not met,
  • key stakeholders and suppliers are not actively engaged, and
  • non-price factors aren’t considered in the decision.

That’s why they built their RFX and Auction platform to easily capture price and non-price factors and their collaborative strategic sourcing decision optimization engine to handle scenarios that have rules and filters that can be just as easily defined on non-price factors as price factors. (For example, “At least 10% of supply must come from WMOB”, “waste must not exceed 2%, or “providers must use hybrid vehicles or biodiesel”.)

Moreover, they also realize that a generic one-size-fits-all RFX is not appropriate for many categories, especially those that are complex or that require the collection of a considerable amount of price and non-price data. They have learned that trying to force-fit “expressive” proposal requests into a simple “spreadsheet-based” RFX solution doesn’t always work. Buyers need more than the ability to define RFIs and price tables, they also need the ability do define workflows. It’s not always as simple as “fill out this questionnaire” and “fill out this price table”, especially when quality, capability, or capacity is an issue.

Consider a transportation bid for North America and Europe. If North America has nine regions and Europe has four, there are thirty-six regional pairings in North America and six in Europe. Depending on the division, there could be over fifty different state/province pairings within each regional pairing. Within each state/province pairing, there could be over a hundred lanes from a starting city/town to an ending city/town. All in all, there could be tens of thousands of lanes. Not all carriers will be able to service North America and Europe. Some North American Carriers will only be able to service Canada, the US, or Mexico. Some US Carriers will only do a region. A regional carrier may not do all lanes. If a carrier only does a few hundred lanes within a handful of regions in Canada or the US, you don’t want to ask them about every lane in Mexico and Europe as well.

In order to be truly useful to the buyer, the RFX not only needs to be workflow driven, but driven by supplier responses. If a supplier does not provide the service, they should not be asked about it. Not only does a supplier not want to click “No” or enter “0” or “NA” for every individual lane the supplier does not service, but the buyer doesn’t want to be overloaded with meaningless data. A screen full of “No”s or “NA”s doesn’t convey any useful information. Furthermore, if a supplier indicates they provide a service, such as Hazardous Material Transport, the buyer might need to collect additional details such as certifications and standards followed. But the supplier shouldn’t be asked about something they can’t deliver.

Not only does BravoSolution allow the buying organization to define their own RFX workflows, but they allow the buying organization to create their own category-specific RFX workflows (which can be thought of as dynamic templates) for specific categories or to select one of their pre-packaged ready-made category-specific RFX tools that are ready to go for common categories like transportation and packaging. Not only do these category specific RFX workflows allow a buying organization to quickly collect complex category-specific dynamic pricing and related information, but it allows for quicker analysis as only relevant information is collected. And the events go faster, since a supplier only has to provide details on what they plan to provide or service. Furthermore, for categories like transportation or packaging where pricing is often defined by mile or volume, the supplier can provide generic pricing (formulas) and then override the pricing on specific lanes or box sizes that they are optimized for. When a supplier can provide a response in a few hours online, and doesn’t need to spend a few days offline slaving over a spreadsheet, they are much more responsive.

But BravoSolution didn’t stop with a better RFX (that can pull data in from their SPM platform or last year’s projects and push data out to their auction and collaborative optimization platform, which is the level of integration required in the foundations of a “Next Generation” e-Sourcing platform), they also tackled the biggest problem in many of the first generation e-Sourcing platforms. But that’s the subject of tomorrow’s post.

Information … Information … Information

Yesterday’s post discussed the lack of realistic starting points for an average organization that wants to merge onto the value focussed path and the need for information. Then the post discussed e-RFX applications and how they are not always the answer as most are not configured for collecting more than a moderate amount of data, and the information required to make the right decision might require a large amount of data to be collected.

For example, consider the information required to make the right decision in a global freight bid where the company has over 5,000 lanes across five continents that are currently being serviced, in part, by almost 500 carriers. Not only will there be a need to collect up to 1,000,000 LTL and TL bids to know what the lowest rates are, but there will be a need to collect data on capabilities (refrigerated, freezer, hazardous martial, etc.), capacities, and serviced lanes. And then, once all of the information has been collected, past performance, guaranteed service levels, (commitments to) sustainability (such as biofuels and hybrid vehicles) will have to be considered in addition to costs and on-time-delivery capabilities. And if multiple carriers are almost equal, long term viability, strategic partnerships, and/or commitment to social responsibility might also need to be considered.

All-in-all, this represents a significant amount of data that needs to be collected, analyzed, and distilled into useful information — data that is not even going to be collected if a firm is still using a first-generation e-Sourcing platform. This is because:

  1. Traditional RFX tools, which are now a commodity (as every provider and their dog has one — trust me), are not built to collect that much information.
  2. Most of the RFX tools that can handle that much information, typically by way of Excel import and export, are not designed with supplier usability in mind. No supplier is going to quote 5,000 lanes at multiple LTL and FTL levels if they only service 3,000 and 2,000 can be broken into 20 cross-regional groups where each lane in the group is priced the same by mile.
  3. Of the few tools that allow for generic pricing and (typically) single-dimensional overrides, most won’t designed with the ability to easily design multiple levels of overrides and the OLAP-like navigation that’s really need to quickly zoom in on the relevant data items (which need to be viewed or altered).
  4. And while most of the better RFX tools allow a user to define as many RFIs, RFPs, and RFQs as the user desires, these generally have to be crammed into rigid workflows that may or may not fit the scenario at hand.
  5. Plus, while most of the tools can push data out into an auction or a SIM tool (that is the foundation for SPM and/or SRM), most don’t allow data to be pulled back in, since the first generation e-Sourcing model was a linear RFX -> Auction -> Decision Optimization -> Award -> Contract Management -> SPM flow.

And then, once you get past all that, you still have to analyze the data to distill the information required to make a good award decision. Because even the best strategic sourcing decision optimization on the market will fail if it’s not provided with the right data AND the right constraints (or, depending on your choice of terminology, rules). The right constraints can only derived by a knowledge individual that has the right information at her disposal.

So how do get the right information? You take your sourcing to the next level. So what does this Next Generation Sourcing look like? Stay Tuned.

The Internet is Big

The Internet … is big. Really big. You just won’t believe how vastly hugely mindboggingly big it is …

… but if you want to take a shot, Royal Pingdom has some numbers for you.

Users: 1.97 Billion Internet Users Worldwide
Email: 294 Billion Messages per Day
Images: 5 Billion Images on Flickr
Videos: 2 Billon YouTube Videos Watched Daily
Websites: 255 Million Websites
Blogs: 152 Million Blogs
Domains: 111 Million .COM, .NET, and .ORG Domains

In other words, 2 Billion Users who send 147 messages per day while watching a Youtube video and surfing over 400 Million Websites and Blogs when they are done with Facebook (where they spend the majority of their online time).

Is a New Era Beginning For the Iconic Bunny?

Last year, we discovered that Playboy outsourced production of its monthly magazine and struck a deal to outsource its Asia operations to IMG Licensing Worldwide in a cost cutting effort that was expected to trim it’s staff by 50%. The only thing that went unscathed was the lavish lifestyle that Hugh Hefner was famous for. It looked like the American Dream was coming to an end and that the iconic bunny was about to go the way of its Lagomorphic ancestors.

But it looks like the bunny has a new lease on life. If this post from Appmodo is true, Playboy for iPad [is] Coming in March, Uncensored. With over 15 Million iPads out there, and a (conservative?) projection of at least 28 Million iPads by year end, that’s one heck of a digital market — especially if they are the first to break the Apple Nudity Barrier! Time to do the bunny hop.

Let’s hope that “Supply Management” gets to take credit for this one!

Ariba Redefines What?

I usually don’t make a point of promoting vendor blogs, or posts therefrom, as those posts are usually designed to promote the vendor that owns the blog (and, to be honest, the post I’m about to reference does promote the vendor’s solution to a limited extent), but this post over on Coupa Cabana (the Coupa blog) on how “Ariba Redefines What?” is totally awesome.

If you follow the press-releases (which, I must admit, I try not to as most of them are just steaming piles of marketing and PR BS, regardless of which vendor they come from), you’ll see that Ariba has recently announced that it has redefined enterprise software. (And if your first thought upon reading that isn’t Get Real! How stupid do you think I am?, then you need to read more of Sourcing Innovation’s rants, particularly my recent rant on the cloud. Or, if you don’t have time, just listen to Larry .) Puh-leaze!

If I knew where the Sourcing Maniacs were right now (as they have been missing in action for a year … they said they were going to visit their European Neighbors, and I haven’t heard from them since), I would have asked them to have their way with this announcement as Ariba is just asking for it with this one.

But, fortunately, Noah found it and he did a dissection that would make even Wacko proud. Ariba Redfines What? is a piece that truly put[s] it up to eleven.