Category Archives: Vendor Review

Lavante – The Newest Contestent in the SIM Arena

As mentioned in yesterday’s post, Lavante is the latest provider of Supplier Information Management solutions in the Supply Management space (which includes Aravo, AECSoft (just acquired by SciQuest), CVM Solutions, Hiperos, and Rollstream, which have all been covered on SI). And while it arrived late, it comes ready for battle.

Since you all know by now what a good SIM solution should do (and if you don’t, reread the classic vendor SIM posts linked above), I’m not going to waste any time describing what it should do or spend a lot of time on the details. Instead, I’m going to mention all the standard stuff that the platform does and then focus on what makes Lavante different from the competition and why it should be included in your SIM vendor short list.

Like its competitors, Lavante allows you to collect detailed information on all of your suppliers, including detailed information on each contact. By default, this detailed information includes tax information, headquarters information remit-to information, business structure information, ERP (System) information, ownership information, certifications, services/materials information, risk management information, insurance information, bank information, and user defined summary information. A supplier has the option of entering all of the information on-line or downloading a template. Lavante can import your current supplier master (in a standard format such as XML) or provide a buyer with a (CSV) template to enter information for new suppliers. The information collected can be customized for every supplier, notifications on change can be configured at the element level, and approvals can be required before critical information is changed.

In addition to the standard browser interface, suppliers can also respond to e-mails or faxes (and even call a rep who will enter the information for them if they are still technologically illiterate). The supplier interface allows a supplier to log-in and manage 100% of their information, which minimizes buyer effort if suppliers take an active role in buyer interaction.

At any time, a buyer can get a list of all suppliers who have not provided requested information as well as suppliers who have registered and completed their profile. The buyer can also see which communication attempts have been tried or whether or not the supplier has not provided an e-mail or fax number.

The distinguishing characteristics of the platform are the following:

  • it was built on the cloud
    it was designed to be 100% multi-tenant and cloud compliant from day one
  • extremely configurable
    many early platforms only had the ability to send an alert when a change was made; later ones allowed for alerts to be configured to change type; Lavante’s platform allows each individual data element to be marked as notify/don’t notify on change
  • automatic validation of Tax ID
    Lavante does a real-time check of every TIN that is entered and a supplier is not allowed to register without a valid TIN that matches their name
  • multi-mode outreach
    whereas most providers assume browser or e-mail data provision, Lavante also accepts faxes and integrates OCR and provides supplier outreach services that will get suppliers onboard by e-mail, fax, or phone if necessary
  • a supplier portal that equals the buyer portal
    suppliers were an afterthought in many first generation SIM platforms and a supplier had to log in to a separate instance of the portal for each buying organization they dealt with; in Lavante’s platform, a supplier can manage their data for all buyers who use Lavante through a single log-in — information needs to only be entered once and common information is segregated from buyer specific information
  • very large supplier database
    Lavante, which started as a recovery audit vendor, has been around for 10 years and has amassed a database of over 2 Million vendors that its client do business with — as a result, it has current information on over 2 Million vendors in its database

Plus, Lavante can use this platform to streamline its recovery audits and save an organization up to 10X more than a recovery audit without access to detailed information would save. So when you add the initial savings that will come from 1099 reporting compliance with reduced SIM (when 20% to 40% of supply base information needs to change annually) resource requirements and more successful cost recovery audits, the solution pays for itself almost immediately. Plus, since it’s true multi-tenant cloud, Lavante can turn your organization on in less than an hour.

Trade Extensions Keeps Extending the Platform

The fact-sheet based RFX module is not the only improvement that Trade Extensions has made since it last traded up its UI and improved its optimization and reporting capabilities. Since Trade Extensions was last covered on Sourcing Innovation, it has made a number of significant improvements to its platform, including:

  • RFI-driven supplier data requests
  • multiple dimension ranking in e-Negotiation
  • integration with Google Earth
  • more cost support and new incumbent rules in optimization
  • conversion of all reports to OLAP reports and implementation of a new n-way comparison report

RFI-driven supplier data requests

In the Trade Extensions platform, supplier data collection can be configured to be dependent on supplier responses. If a supplier indicates that they don’t have a certain capability (or don’t wish to bid on particular item or category), then they don’t see the associated fact sheets (which they can download as an Excel Spreadsheet if they like). Also, if they indicate they do perform a certain function, the RFI can be configured to request additional information.

Multiple dimension ranking in e-Negotiation

Most auction platforms rank by bid, volume, or another relevant factor to the buyer. The Trade Extensions platform can be configured to rank (and report on) bids on multiple dimensions, such as supplier and location or supplier and quality. This makes it easy to quickly see how a bid stacks up against multiple relevant factors.

Integration with Google Earth

Often times when I hear about integration with Google Maps or Earth I say “that’s nice” because it usually doesn’t add much value. But the TE implementation actually makes Google Earth useful. Not only can you quickly see the lanes, relative volumes [by line thickness], and carrier distribution [by line colour] at different scales, but, with a click, you can pop up a box that provides the full details of what is flowing down the lane (products, volume, from, to, frequency, total weight, etc.). A warehouse manager can quickly zoom into her facilities and see what is coming and when. It can take a scenario with thousands of allocations and make the information quickly comprehensible.

More cost support and new incumbent rules in optimization

Relative and absolute fixed, on-, cost support has been greatly improved in the application. A buyer can define a cost on supplier selection, on a certain volume threshold, on a specified property, etc. This allows for incredibly detailed and accurate costing formulas to be created. Trade Extensions has also added four new incumbent rules to the optimization solution, two new allocation and two new keepers. The user can now choose to allocate an incumbent volume at least equal to what they have now, or to the current percentage of volume, or to incumbent proportions and allow redistribution between incumbents, or between winners in incumbent proportions.

Conversion of all reports to OLAP reports and implementation of a new n-way comparison report

When Trade Extensions last traded up their UI, they had just implemented their new OLAP reporting feature and were in the process of converting their existing reports. Now that the OLAP reporting feature has been fully implemented, all of the reports have been converted and the new report creation facility is complete, allowing users to define their own OLAP reports on the dimensions of their choosing. Also, the user can now create arbitrary n-way comparison reports and “glue” reports together from existing report definitions.

And Trade Extensions has no intention of slowing down. In addition to a commitment improve SIM/SPM/SRM, Trade Extensions is also working on:

  • auctions – simplifying them for low-end spot buys
  • e-Negotiation – instant messaging, better charting, etc.
  • enterprise features – search across projects, track cross-project metrics, integrated BI
  • roles – admin, project manager, buyer, viewer, etc.
  • new project types – to simplify auction setup
  • on-demand training – the wiki is under constant development and walkthrough videos will soon be available

It should be an exciting year for this European company that has just started to gain traction in North America (where they opened a new office last year).

Trade Extensions Trades Up to a Fact Sheet User Interface

Trade Extensions is another company that has refused to sit still during the downturn. Even though it did a complete overhaul of its UI in late 2009 (when it traded up its UI and e-Negotiation Management Capabilities), it realized that was just the first step of many that would be required to make its application more useful and more useable across the Supply Management Organization. Trade Extensions has been working hard to break out of the “complex transportation optimization” niche that they started in and has developed a fully functional Sourcing and Supply Optimization solution because they see the value that an organization can receive when optimization-based sourcing events are undertaken across the board.

While Trade Extensions started as a niche Strategic Sourcing Decision Optimization platform in the early naughts, it has expanded into a full suite solution over the years and now includes one of the most powerful RFX modules on the market, real-time optimization-powered reverse auctions, contract management, and OLAP spend analysis (which rivals many of the other suite spend analysis solutions on the market and a few of the pure-play solutions as well). And while they don’t yet have much of a SIM/SRM/SPM solution, they recognize that as a weak point and it is one of their top priorities for the coming year.

In addition, while they don’t yet have category RFX solutions or a centralized data management facility (or “Business Centre”), they are planning to introduce new project types to simplify RFX and Auction setup and their new support for fact-sheet based RFX and reverse auctions makes data management significantly simpler and takes them further down the data management path than many of their e-Sourcing Suite provider brethren who have been standing still for the last few years.

Internally, Trade Extensions uses OLAP cubes to store its data. Thus, the user can provide data in d-dimensional fact sheets, which include 2-dimensional spreadsheets and 3-dimensional workbooks, that define data in familiar matrix notion. This is a very powerful method of data input. A user can define a fact at any level that makes sense. If the cost of interest is a single freight cost from a ship from to a ship to, the user can provide costs in a 2*2 matrix of ship from locations and ship to locations. Users can also define costs at the region or country level if they like, and if a user defines a fact sheet that relates lanes to regions, the user only needs to specify costs at the region level. Moreover, if the user so desires, once costs are specified at the region level, they can be overridden at the ship from – ship to level. The system will do this automatically if the fact sheets are appropriately defined and included in the project as it knows d+1-dimensional costs always override d-dimensional costs. In other words, if you define continents as collections of territories, territories as collections of regions, and regions as collections of lanes, the system knows that territory data overrides continent data and region data overrides territory data, if defined. Otherwise, default values from a higher level in the hierarchy are to be used if no suitable cost exists at a lower level of the hierarchy. This is important as this allows a user to only enter detailed cost data where it is required (and where it differs from default pricing for the category).

As a result, data collection in Trade Extensions’ e-Sourcing platform is quite easy. A buyer only has to define what the organization wants to collect, and a supplier only has to bid on what it can provide. Furthermore, a supplier only has to bid to a level of detail that makes sense. Plus, all bids can be formula based. So, if a supplier supplies a product in different sizes, and the price is dependent on weight or volume, it can define a formula once and re-use it on each size. Furthermore, a user can re-use any and all fact sheets from the event in other events, minimizing data collection and data entry. It’s definitely another step along the path to ultimate usability.

BravoSolution’s Business Centre Category Sourcing Solution Takes e-Sourcing to a New Level

Yesterday’s post discussed how BravoSolution has figured out that a real key to e-Sourcing success is a platform that is usable and efficient. It’s one thing to collect bids through a browser (which can be done by any junior high student these days, literally, especially when you consider 14-year olds and 11-year olds are building top downloaded apps in the app store), but another to actually make such an application usable for a category where thousands of bids need to be collected and compared from dozens of suppliers along with tens of thousands of pieces of non-price information.

In other words, they have hit upon the fact that key to e-Sourcing success is the delivery of a platform with the ability to:

  1. define an event of a known (category) type with the click of a mouse,
  2. dynamically determine appropriate and minimal data requirements,
  3. but still handle as much data as can be thrown at it, while the platform tools
  4. make use of and manage existing data.

This is what BravoSolution has done out-of-the-box for nine different categories, what they are doing for more categories as you read this, and what a buying organization can do for any and all categories of their choosing (with a little elbow grease up front). A buyer can view a category specific business centre for Chemicals, Transportation, Packaging, Industrial MRO, Facilities Service, Direct Materials, Contingent Labor, Travel, and Fleet Management which not only lets the buyer see the status of all of her past, present, and upcoming events, but quickly set up, manage, and re-run an event of the given type with a few mouse clicks.

But, more importantly, it is setup to allow a buyer to define and capture all of the relevant pieces of data about a complex category for consideration and analysis with minimal effort. As an example, we’ll consider a rigid packaging RFP through the Packaging Business Centre. In this type of RFX, a buyer will often be looking for plastic bottles and containers. The pre-defined RFX format can capture plant locations; detailed plant information; up-front costs by resin, machining, decoration, and colorant; pricing by group, where groups can be defined by volume, shape, finish, height, overflow capacity, and/or resin; freight; bundle information; plant and machine capacity limits; and additional RFI and RFP details as defined by the buyer.

But more importantly, if all of this information is known for a supplier from a previous event, it can be configured to automatically attach the existing information for a supplier so that all a supplier has to do is define new capabilities, remove old capabilities, and define new pricing. Furthermore, since all of the information is accessible through the business centre, before the buyer even selects the supplier, she can view the supplier information in the business centre to determine whether or not the supplier is even appropriate to invite. (If capacities are too low or if the supplier has not been awarded business in the past three events, it might not even be worth inviting the supplier. On the other hand, if a new supplier has been added to the system and meets the capacity and capability constraints, which can easily be determined by either querying the data or doing a search for suppliers that meet a minimum requirement, then it might be a good idea to invite the new supplier this time around.)

The information that can be collected and maintained about suppliers and capabilities is incredibly detailed. Plant definitions can be multiple screens long and a buying organization can capture location, hours per shift, shifts per day, operating days per year, labour contract information, number of employees, yearly changeover, key contact information, inspection and certification info, and other fields meaningful to the buying organization. Machine capabilities can be captured for each plant and this information can include machine types, models, tonnage, average age of machines, and cost per fully loaded machine hour. Other up front costs that can be captured included detail cost information on resins (for PP, HDPE, PES, PET, etc.) by manufacturer and SKU, bottle decoration (which have one-time set-up costs, waste percentages that affect costs, dec. cost per 1,000, etc.), and colorant costs. Pricing can then be defined for each group and freight can be defined for each lane by truckload (and less than truckload if so desired). Bundles can be defined along with minimum volume rules and discount information. Capacities can be defined by plant and machine type and can include auto-increments for each machine a supplier indicates they are willing to add if such supplier is awarded sufficient business. And no time is required to set all of these templates up, because they are already there.

And once everything is captured, all of the information can be fed into (collaborative) sourcing optimization and rules (and filters) can be defined on any price or non-price factor. All of the standard price adjustment (favor/disfavor, by bid attribute), count (supplier, bid attribute), award allocation (conditional, guaranteed, relationship, revenue, etc.), exclusion, limit, and force rules are available. These rules can be restricted by any or all suppliers and bid types and allow a user to do a very powerful analysis. And once the award has been made, the details can be pushed into the contract centre where a contract can be quickly authored using an existing template, or existing clauses. BravoSolution’s category solution RFXs are very well thought out and much better than many of the first generation e-Sourcing tools still on the market (which were a great start, but leave much to be desired once a Supply Management organization is ready for next generation sourcing).

BravoSolution Masters High Definition Sourcing with the Business Centre

Yesterday’s post introduced us to BravoSolution’s Next Generation Sourcing paradigm that they call High Definition Sourcing. Built on their Collaborative Sourcing framework, BravoSolution’s High Definition Sourcing paradigm realizes that for collaborative sourcing to be truly effective, the following additional requirements must be met:

  • all affected parties have access to the tool and can contribute relevant data,
  • data entry must be as simple as possible,
  • data that already exists somewhere else on the platform need not be reentered at any time, and
  • selected data must be capable of being pushed out with a single click to any tool on the platform that requires it.

In other words, BravoSolution has realized that the ultimate key to long-term e-Sourcing success on an e-Sourcing platform is usability — and usability is more than simply letting people enter data in an Excel spreadsheet and upload it through a browser. It sounds simple, but the sad truth is that it takes an average enterprise software company (at least) ten years to realize what usability really means (and some never figure it out). And even though the more progressive enterprise software companies realize after about five years that usability is important, it still usually takes them a few tries to get it right (if they even try).

The big problems with first generation suites are:

  • the monumental effort required to define an event for a high-value or complex category where a considerable amount of price and non-price data elements are required,
  • the subsequent monumental effort to collect all the data, and
  • the monumental effort to do it all again when the category has to be re-sourced.

If the tool does not allow the buyer to create an event template (and many of the low-end first generation tools still don’t have this ability), then the buyer pretty much has to start from scratch next year. This is one of the biggest limiting factors of wide-spread tool adoption. If it takes weeks (or months) to do an event, then the Supply Management organization can only do a few dozen each year.

The key to e-Sourcing success is a platform with the ability to:

  1. define an event of a known (category) type with the click of a mouse,
  2. dynamically determine minimal data requirements (and allow a supplier to define as little or as much data as they want, or need, to),
  3. but still handle as much data as can be thrown at it, while the platform tools
  4. make use of and manage existing data.

While most of the progressive e-Sourcing platform providers recognize the first two requirements, and have some capabilities in that regards (usually by way of templates and conditional RFIs), only a handful can handle massive amounts of data well. Most providers haven’t figured out the right way to use and manage existing data — for which there are a couple of valid approaches.

Supplier masters or MDM (Master Data Management) is not enough because, where events are concerned, there is the need to collect and manage multiple rate sheets, term sheets, and bid sheets and to maintain these over time. A supplier will have standard quotes by region or mile, bid sheets for certain high-volume lanes, and then specific quotes for a buyer if a certain volume is agreed to on lanes the supplier is best capable of servicing. All of these rates are valid depending on the situation — and all should be maintained. Furthermore, each set of bids should be usable in any and all events (and scenarios) where they are valid. And in a well-designed tool, it should be trivial to attach the bid sheet to the event (or scenario in the event). And I mean attach, not import. Most tools import, which creates another copy of the data, which is not automatically updated if the supplier creates a new rate sheet that has to be maintained separately. That’s okay if the buyer wants to create a “what-if” scenario and manually override bids, but if the buyer just wants to use standard rates, it’s not acceptable.

In a well designed tool, a buyer will be able to create and run an event simply by selecting an event category (which will load the workflow that has already been defined), defining a few dates, inviting suppliers (from a known list), and populating the event by selecting all of the appropriate data already in the system (current/standard quotes, KPIs, volumes, etc.). Creation of a simple or low-value category, when everything about the buyer’s procurement and shipping preferences are already known, should be a single click, just like checking out on Amazon.com. And the most complex of categories should only take a few hours to configure. No one has days (or weeks!) to create an event any more, and with the workflows known, standard questionnaires in the system, and standard pricing and last year’s responses already known, all a buyer should have to do to create the event is define any changes (in volume, delivery location, sustainability, etc.) from the last event and all a supplier (who has bid before) should have to do is define any changes since last year. The only effort required should be in the analysis, and even that should be partially automated (as the standard price and change reports should be run automatically as well as the baseline, basic rules, last-year’s allocation, and comparison optimization scenarios). A buyer shouldn’t have to work, only think, because that’s what the organization is paying its top Supply Management professionals for.

BravoSolution has figured this out and created their Business Centre where a user can not only log in to their management console (complete with dashboard) to see what they are doing, what needs to be done, what has been done, etc. but can also manage all of the events and data in the system (and, if they are a power user administrator, customize the workflows as appropriate). When a user wants to create an event, they select a category type with a click. They can then add suppliers with a few more clicks, attach last year’s data or standard bid sheets with a few additional clicks, import supplier performance data with another click, and, if enough data is already in the system, run starting reports and baseline scenarios before a single supplier responds. It’s a simple concept (that many first generation e-Sourcing platform providers continue to overlook) with a powerful implementation. But what is even more impressive is how it’s easily integrated with the custom RFX category workflows and how much value this gives a buyer. Tomorrow we’ll discuss one of BravoSolution’s pre-packaged category RFXs, that they have created by working with leading Supply Management organizations over the years, and discuss how easy it is, with the right platform at the organization’s disposal, to take Sourcing to the next level.