Category Archives: Vendor Review

Keelvar: The Little Engine that Could

In case you haven’t guessed, this post is about The Little Engine That Could not only get up the big hill, but after scaling the hill, decided to follow the tracks up to Alaska, tackle, and climb, Mount McKinley (also known as Denali), which is the highest mountain in the United States at 6,190.5 meters (or 20,310 feet), and not stop until it reached the summit.

For those of you who missed our prior posts, namely Keelvar: Strange Name. Uncommon Results., Keelvar: Are They Right for You, and Re-introducing Keelvar, An Optimization-Backed Sourcing Platform, Keelvar, which is the newest, and still the smallest entrant, to the strategic sourcing decision optimization game, and one of the few (correction: two) vendors to provide a fully integrated optimization-backed sourcing platform (with integrated RFX and e-Auctions), has been making great strides since it spun-out of the 4C research laboratory (in the Department of Computer Science) at the University College of Cork a mere four years ago in 2012. Since then, it has been advancing faster than all of its peers except Trade Extensions, and has emerged to become a top contender for the provision of optimization-backed sourcing platforms. In fact, as hinted at in an upcoming Pro piece, the doctor expects that Keelvar will grow faster than 4 of its 5 five competitors over the next few years.

So what’s so great about this little upstart? The first thing to note is the ease-of-use of the platform. The platform, which embeds a simple-to-follow seven-step best practice sourcing platform, literally guides even the most junior of buyers through the most complex events the platform can handle, and the side-bar navigation makes it a breeze to quickly access any step in the process. (The tried-and-true best-practice methodology is strikingly similar to what MindFlow used back in the day, but it never had such an easy to use, clean, and modern interface.)

The second thing is the speed of improvement. Since SI last reviewed the platform last fall, a number of considerable of enhancements have been made that go well beyond usability. Extensive supplier self-service has been added (which allows the supplier to manage not only the response and bid process, but the team assigned to it – all the buyer has to do is invite one supplier rep, and that supplier rep can create the supplier organization’s records, add users, give them appropriate, fine-grained read/edit rights to the documents and bids, and manage all of their effort without any buyer involvement whatsoever). Single-sheet smart-load (which allows the platform to detect field-types, field-status, and other relevant information without a user having to define a lot of meta-data or use the cell-based encoding required by other platforms) has been developed. And parametric bidding is in quality assurance.

Parametric bidding is, in a world, cool. Often in the acquisition of fleets, computers, cell phones, etc., the buyer doesn’t precisely know the exact configuration details that are desired until the last minute. In this situation, the buyer has to either create a huge number of potential configurations for bidding, or pick a few and hope for the best. With parametric bidding, the supplier can bid on a base configuration and define all of the options they offer against that configuration as well as the price increments (or decrements) for that option. When the final configurations are selected, the system will automatically calculate the appropriate costs (and discounts) from the parametric sheet for the optimization model, with no effort at all required by the user. This is a feature that is jut not seen in first generation sourcing platforms. Watch for it.

Keelvar, which was first named as a SpendMatters company to watch last year (and which will soon be covered in depth on Pro by the doctor and the public defender), is a company that you should be keeping a really close eye on. Optimization-backed sourcing platforms are the future. and right now there are one of only two providers with a single, integrated, end-to-end, solution. We may see more in the future (with BravoSolution working on integrating its two product lines, SciQuest’s acquisition of CombineNet, and Determine’s acquisition of Selectica), but Keelvar (and Trade Extensions) have an early lead that gets larger every day their competitors work on integration (as opposed to innovation).

Now, you’re probably worried about adoption, because first generation platforms were, for the most part, so damn hard to use (to put it bluntly), but second generation optimization-backed sourcing platforms are actually quite easy to use and focussed around adoption. For more information on how to get Higher Adoption, check out the linked white-paper. And for more information on Keelvar, we recommend checking out their new, open, Keelvar support portal.

SourceMap: Striving to Bring Supply Chain Visibility to the Masses

SourceMap is a supply chain mapping tool that is designed to help an organization map out their end-to-end supply chain to help them gain critical insight and understanding into their performance, costs, sustainability, and risk. Especially risk. Most companies don’t understand the risks hidden in their supply chain — the sole-source parts, the over-dependence on high-risk geographic areas, or the ability of a single port strike to knock out multiple shipping lanes. (Nor do most companies understand the cost of risk, which is discussed in detail in Sourcing Innovation’s upcoming white-paper on Playing With Fire, but that’s a discussion for another post.)

SourceMap, born as a research project at the MIT Media Lab to publish and measure the environmental footprint of all the products on earth, was launched as a public platform for supply chain mapping in 2009 that allowed individuals to see every aspect of a product’s life — the good and the bad. Then, in 2011 it partnered with the MIT Centre for Transportation and Logistics to pursue opportunities in automating supply chain visualization and risk management. Shortly after, the 2011 Tohuku tsunami hit and wiped out over 45,000 buildings, damaged over 144,000 more, shut down all of Japan’s ports (including 15 that were located in the disaster zone). All told, it did over $300 Billion in damages and sent shockwaves throughout global supply chains. Companies were scrambling to understand the impact on their supply chains, SourceMap was approached, an incorporation followed, and the private sector solution was born.

Hands-down, SourceMap is the best visualization of the supply chain to hit the scene since Resilinc, which is, in Sourcing Innovation’s view, is still the leader in Supply Chain Risk Management solutions, but if all an organization needs is visibility and Supply Chain Visualization, SourceMap is now a leading contender in that arena. SourceMap has the ability to use an organization’s ERP data, public data sources, and survey data from the organization’s suppliers, the suppliers’ suppliers, down to the raw material suppliers, to create a complete point-to-point map of the supply chain that an organization can use to trace it’s products from source-to-sink on a (Google Earth) Map and visually see what is happening. This is a very powerful feature that allows an organization to gain insights into their supply chain that they never knew before. And just like an organization is typically shocked the first time they run a spend analysis (we spend that much with who?!?), they are typically just as shocked when they run a map and see that a number of distributors and tier 1 suppliers are using, or outsourcing a significant portion of, spend to the same tier 2 supplier and just pushing the single-source point of failure an organization is trying to avoid one step further down into the Supply Chain.

And the SourceMap solution, which only needs common location data points, can quickly import and combine all data sources an organization can get its hands on and SourceOne can often create a starting supply chain map for an organization in less than an hour. It’s not complete or perfect, but it allows the organization to quickly drill into the supply chain and see where the data, and focus, is needed.

SourceMap is quickly becoming the new supply chain visibility solution to watch, and for a real in-depth analysis, Sourcing Innovation would recommend the in-depth write-up that the doctor and the prophet collaborated on over on Spend Matters Pro (membership required) that provides four pages of deep insight into the solution.

LeanLinking: The Newest Contender in the SRM Arena

LeanLinking is a three year old Denmark company in the SRM space that you haven’t heard much about but should be aware of, especially if you are a smaller mid-market company, as this SaaS company has been rapidly developing their Best-of-Breed SRM solution since day one and it is now a very solid offering for a mid-market company desperate for supplier relationship management capability at a price-point they can afford (and this solution starts at a price point everyone can afford, but more on this later).

It’s certainly no competitor to HICX or State of Flux (both of which have been reviewed on this blog and both of which will soon see deep joint coverage by the doctor and the prophet over on Spend Matters Pro, more on this later) at this point, but when you compare it to the plethora of older-generation SIM solutions on the market, it’s the goose-that-laid-the-golden-egg for many smaller mid-market organizations that need something but have no real budget.

While the LeanLinking tool is essentially designed to help buyers build supplier report cards in preparation for supplier performance review, corrective action, and development meetings, monitor these scorecards over time, and track relevant aspects of supplier interaction, it’s built in such a way that encourages social interaction (which Generation Y likes and which the millennials like even more, which means it is something that is likely to get adopted). It also supports easy file-based data import (and can create complete data format descriptions for IT), which is very helpful to the mid-market, which keeps most of its data in Excel anyway (even though Excel is a damnation that should have already been exercised from the organization long ago). It also has a number of other basic capabilities you’d expect in a SRM system, including compliance tracking, contact management, and so on, but this is not the reason to take note of it.

The reason to take note of LeanLinking is that they realize that it’s hard for Procurement in most mid-size organizations to get any software budget (without a proven ROI, which, of course, can’t be proved until Procurement has the software — the never-ending catch-22) and have decided to bypass Finance (and IT) entirely by offering a consumer (buyer) subscription option starting at just £19 a month for a single buyer. This allows a buyer to expense the platform on his monthly expense report and bury the license cost until he has shown ROI (and then use that as an argument to get a department license, which will be a lot more valuable as the entire team will be able to share data, reduce duplication of effort, get funding to link in feeds from the ERP through the API, etc.).

It’s a novel concept and a novel platform. For more information, see the SM post by the doctor and the prophet as well as our in-depth Pro Analysis (membership required).

Re-introducing Keelvar, An Optimization Backed Sourcing Platform

Last summer, we introduced you to Keelvar, a provider of an optimization-backed Sourcing Platform with a strange name that produced uncommon results. A client of Keelvar’s with 30 year’s experience in ocean freight sourcing remarked that it was like their first generation sourcing suite on steroids, so Keelvar is definitely a platform that should be on your radar.

A spin-out from a research laboratory that built a next generation solver, Keelvar was formed as a SaaS (Software as a Service) company in 2012. Unlike the majority of sourcing optimization software providers, they realized from day one that the solution wasn’t a better optimization module, it was a better sourcing platform where ease of use was the most important driver of adoption. Their Founder and CEO, Alan Holland, believes that “every sourcing event with a possible split-award should be optimized but in a completely transparent manner so that it’s easy for both buyers and suppliers” to understand the award recommendation and the reason therefore.

The starting premise was that the average user wasn’t advanced enough to use the first generation strategic sourcing decision optimization (SSDO) solutions where optimization was a standalone module and you needed to be an optimization platform expert to set up the models and run the sourcing event. It had to be intuitive and easy. Moreover, these average buyers have much simpler categories. As a result, the models were simpler than what some of the first generation expert providers were throwing at them, and, moreover, the majority of these models for standard, “simpler“, categories were fairly standard and could even be mapped to a default template by a senior buyer that the junior buyer could start with, and sometimes use unaltered.

Unlike many platforms, the optimization-backed sourcing platform walks the buyer through a simple process for creating and executing a sourcing event that even a junior buyer will feel comfortable with, detailed in our introductory Keelvar post. This process is as easy to use as a powerful, weighted, RFX tool or e-Auction, which is something that cannot be said for the majority of optimization solutions on the market that still require a solid understanding of the underlying mathematics and operations research. It’s sourcing for the every-man.

And it’s not just for the mid-size company anymore. If you will recall, when SI first reviewed the solution, SI identified it as the perfect solution for the lower-end of the mid-market. However, over the last six months, the usability and power has been steadily improved, and now SI will also identify it as a perfect solution for the entire mid-market and a candidate solution for the Fortune 500 / Global 3000. Keelvar, which has a US presence in addition to its UK presence, has acquired a number of Global 3000 clients for whom the solution is perfect for. For the majority of categories, and spend, in these organizations, there is no need for overkill optimization and the solution is a perfect fit. That’s not to say that it can’t handle the more complex categories either, with a number of global logistics events for some of the world’s largest shippers already under its belt, just that it is perfect for those enterprises where the majority of events are not that complex and can be templated for the average buyer.

Plus, the Kevlar platform is under continual development and improvement. Not many SSDO platforms can say that either. When optimization is one module in a set, providers can’t focus constant development on it. When optimization powers a single platform, it’s a different story.

Any company that chooses Keelvar gets a solution that allows all spend to be subject to the appropriate level of optimization, which is what allows Keelvar to get fantastic results for some organizations and why they have progressed so fast. If you have a traditional, heavy, solution that can only be used by a small set of dedicated resources on a few large categories, the organization will struggle to get 10-20% of spend under optimization-backed management which means, at the end of the day, the savings potential of the solution (expected to save 10%) is a mere 1-2% on the bottom line. But if you have a solution that is lighter, streamlined, and useable by everyone in your organization, you can get 80% of spend under optimization-backed management. And while the simpler categories won’t hide the same opportunity, even if you squeezed out a mere 6.25% average savings, that’s still 5% to the bottom line and a much better investment. At the end of the day, it’s not the line item count that the product can support, but the amount of spend that flows through it. And the bravado claims by first generation solutions that their solution can support tens of thousands of line items have done more harm than good.

Keelvar is an agile company and is developing new product features and global coverage quickly. New developments in the last six months include …

  • RFI with bulk editing capabilities.
  • Bid data sanitizer to detect, correct and prevent erroneous bidding (via automatic identification of outliers).
  • Enhancements to multi-round RFQ capabilities.
  • Large scale e-Auction support for hundreds of lots and bid upload capabilities.
  • New support portal to cater for the growing global customer base.
  • Partnerships with benchmark data providers in Global Logistics.
  • A partnership with an e-Sourcing Suite provider.
  • New offices in South America and Australia (which give it a presence on four continents).
  • Paid trial offering for Global 5000 companies (and, as per a recent SI post, paid pilots, under the consulting budget, could be just what you need to prove the value of an optimization-backed sourcing platform and get investment $$’s to upgrade your platform, and your results).

As one of the few companies aggressively developing an optimization-backed sourcing platform, and one of the few companies in the Supply Management space focusing on adoption first, Keelvar is one of a handful of global companies that might just lead Procurement out of the dark ages (in which Procurement seems to perpetually exist as a resident of the Island of Misfit Toys) and into the enlightenment.

RiverLogic: Bringing Optimization to the Enterprise

In our last two posts on Beyond Sourcing Optimization we noted that Strategic Sourcing Decision Optimization (SSDO) is just one area where optimization can be successfully applied in a progressive organization that is a leader in its industry. An average enterprise organization is ripe with opportunities for the application of optimization technology — optimization technology which can easily add up to 5% to the bottom line if properly applied.

RiverLogic, which is advertising prescriptive analytics technology and enterprise optimization, is one such company that is tackling enterprise optimization. Advertising holistic decision support that performs simultaneous optimization of the entire business model, the optimizer is capable of integrating demand, production, and inventory optimization into a single holistic optimization model that, when run, optimizes production and inventory against demand to maximize profit by optimizing revenue against production and inventory (carrying) costs.

As one may have gathered by our previous post, this is no easy feat. Production optimization requires one type of model that understands production line throughput, machine utilization overhead costs per hour or unit, associated workforce requirements, associated costs during regular and over time, raw material inventory costs, and logistics costs at different production levels. Inventory optimization is a different type of model that must take into account the myriad of costs that contribute to the amortized inventory carrying cost and that include, but are not limited to, warehouse overhead costs, labour costs, and depreciation costs and balance these against logistics costs from more or less frequent orders. Finally, demand optimization is its own beast as one has to have a relatively good understanding of the different types of marketing spend and how each will influence market demand, the costs of production at various volume levels and delivery commitments, the associated lifecycle costs including outbound distribution costs, warranty and service costs, and any end-of-life reclamation costs (if one or more locales in which the product is being sold have mandatory reclamation or recycle laws for the product or one or more of its components). Now, one can create a mega-model that encapsulates inventory and production costs into the demand optimization, but it’s not easy, and that’s why few companies have tackled this problem (just like few companies have tackled true SSDO). And most that have tackled this problem do so by building custom models for their clients that require individuals with advanced degrees in Mathematics or Operation Research to run.

However, the RiverLogic platform, like leading SSDO platforms, comes with this model “out-of-the-box” and all a user has to do to build a basic model is get the data. At this point you’re probably thinking this is a show-stopper as

  • the amount of data required to populate such a model is extremely extensive and
  • outside of the ERP, no one system has even a fraction of the data required.

RiverLogic understands this perceived dilemma as well and that’s why their platform integrates with over a dozen major ERP and Accounts Payable systems because when you get down to it, that’s where the majority of the cost data required for a holistic demand optimization model, that simultaneously balances inventory and production, resides. Once the proper integrations are done, the model can be run out of the box and the organization can instantly see relative to its demand forecast the optimal production and inventory levels (and, as a bonus, the optimal distribution plan and cost model as logistics are also accounted for in this holistic model). This will allow an average organization that has not simultaneously balanced these models before to shave at least an extra 5% to 15% off of overhead costs and, if one or more of these models haven’t been run before, even more. And these savings will trickle down straight to the bottom line the instant the plans are updated.

But the power of the platform doesn’t stop there, like the best SSDO solutions, it also supports powerful what-if optimization that allows the organization to see how production and inventory plans change if the demand projections were to change, if more money was allocated to marketing, or if the estimated impact of marketing campaigns were more or less successful than initial predictions. This model can be run any time and plans updated dynamically, taking effect with the next (automated) order upon publication to the demand / inventory / order management module of the ERP(s) that the platform integrates with.

Now that leaders like you are using decision optimization in your Sourcing and advanced spend analysis in your planning, you’re ready to apply that knowledge and capability across enterprise operations and, as such, are ready for the enterprise optimization (and prescriptive analytics) that innovators like RiverLogic are offering. RiverLogic is one of the handful of companies you’re going to be hearing a lot more about in the coming year
and one that should definitely be on your radar as you look to take cost control across the enterprise (because what good is saving 10% on a category if poor operations just eliminate that savings after the deal is signed?).