Category Archives: Vendor Review

B2B Connex: e-Document Management for Small & Mid-Size Manufacturers

B2B Connex provides a web-based sourcing and procurement document management solution that is a great fit for all types of small and mid-size manufacturing organizations that need simple e-Sourcing and e-Procurement functionality at a low price tag. It’s basic portal solution, that plugs in to your existing ERP & MRP solution, can be acquired for as little as $30,000 (plus 20% annual maintenance) for a small operation. Mid-size operations are generally priced by the number of locations and users, but even their larger customers don’t pay much more than 100K. (Pure SaaS configurations and pricing are also available, but most of customers with traditional on-site ERPs/MRPs generally prefer on-site installations.)

Designed to fill the niche in the small and smaller mid-sized business market left by the big end-to-end e-Sourcing and e-Procurement suite vendors whose solutions often come with a big price tag, the B2B Connex solution allows you to easily manage the following e-Document types (among others) and efficiently conduct your day-to-day procurement operations.

  • RFQs
  • Purchase Orders
  • Kanban Orders
  • Shipment Notices
  • Payment Inquiries
  • Invoices

In addition, it can also handle the CRM side of your business and allow you to manage the following e-Document types (among others):

  • Inbound RFQs
  • Sales Orders
  • Inbound Shipment Inquiries

It’s implemented as a simple web-based portal solution, that can be accessed as needed by your procurement personnel, and it integrates with your back-end ERP and/or MRP systems. (Right now, they support about a dozen ERP/MRP systems with no or minimal configuration work, including SAP, Oracle, JDE, Intuit, Avantis, and Mapics.) And since it handles all the key document types, it allows you to do m-way matching and insure that the invoices are accurate (and represent actual shipments and agreed upon pricing) before you pay them. Since the lack of this capability is one of the two biggest reasons that up to 60% of negotiated savings never materialize (with the other being maverick spending), it’s a good one to have!

In addition to document status (such as new, acknowledged, reviewed, accepted, etc.), the system also supports state management, and a supplier can, for example, accept, reject, or mark each line item for negotiation on a purchase order. This is a useful feature for spot buying, which is common for MRO, SG&A, and low dollar spending in smaller organizations. Also, each e-Document can have an unlimited number of e-Document attachments, so your RFQs can contain detailed item descriptions and sample contracts and your purchase orders can contain detailed specifications and shipment terms and conditions, etc.

If you’re a small or smaller mid-size manufacturer still on EDI and holding off on an e-Procurement system because you think it’s too extensive for your needs, or you think it won’t integrate with your ERP/MRP, or you think you’re too small for such a solution, it’s certainly a system you should check out. Plus, they have an ROI guarantee. If the system does not pay for itself in a year, they’ll refund the purchase price. However, considering the implementation of even a basic e-Procurement e-Document management system such as this generally comes with at least a 25% productivity improvement across your Procurement department, it’s pretty hard not to see savings (especially since the automatic matching will reduce payment errors and the built-in e-Negotiation capabilities on spot buys will help you get price reductions).

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SupplierSoft and its Supplier Process Management Solution

Last year, the Sourcing Maniacs introduced you to SupplierSoft, a provider of Supplier Data and Process Management solutions as part of their vendor tour.

SupplierSoft is a unique solution not only because they’re one of the few companies that understand the importance of centralizing all of the supplier process management solutions in a common platform (because supplier management is more than just supplier information management and supplier risk assessments, two prominent directions that their competitors are moving in), but because they decided to build their solution on the #1 CRM platform, SalesForce.com. As noted in the previous post, there is a lot of similarity between CRM and SRM, since both require extensive information management and the ability to capture and organize the data against relevant business processes.

Despite its recent market entry, the SupplierSoft platform is one of the most extensive Supplier Relationship Management (SRM) and Supplier Information Management (SIM) platforms on the market with supplier management, audit management, corrective action management, product compliance management (PCM), environmental compliance management (ECM), bill-of-material (BOM) analysis, and end-to-end reporting modules.

Over the past year, they have significantly extended their regulatory compliance capabilities in their PCM and ECM modules with extensive customizable BOM and (PDF & web) forms support. You can collect data at any level of the BOM, which rolls up into higher-level components and reports, which can then be drilled into as required. This allows you to focus only on exceptions and non-compliance, which is a must when you have thousands of parts that collectively use thousands of compounds that you need to track to maintain compliance with RoHS, WEEE, and REACH (which is about to get a lot more involved as it works its way through the SIN List). The solution allows you to define custom forms, with defaults, that allow you to only collect the regulatory data relevant to you, which can then be (automatically) customized (by the system) for each supplier with respect to the products they supply you (and the declared components and/or raw materials). SupplierSoft’s clients have found that by creating easy-to-use custom forms, they get better responses to their regulatory compliance efforts with less work on their part. In one customer’s case, the compliance manager was able to free up half the staff to work on initiatives more important than just ensuring the supplier provides all of the necessary information.

A good compliance management solution, which SupplierSoft provides, is becoming very important because:

  • it significantly reduces data collection, review, and reporting costs
    which are becoming more and more significant as a flurry of global regulations are forcing many companies to keep electronic mountains of data
  • it reduces time to market for new products
    which can get delayed due to regulatory reporting requirements if you can’t fill out all of the forms and provide the necessary supplier documentation on-demand
  • it reduces risk
    as manual processes can allow non-compliant raw materials and parts to “sneak” through, which can result in forced recall and significant revenue losses; it also provides you with a “due diligence” defense should you be accused of recklessness in your regulatory compliance efforts
  • it contributes to a 360° view of suppliers
    which is very important to your SPM program

So if you’re looking for an SRM solution and you’re looking at Aravo, CVM, or another big name SIM/SPM/SRM solutions vendor, you might want to give SupplierSoft a look as well. Like their competition, they’re currently getting a lot of attention from a couple of Fortune 100’s and I expect they’ll be getting more attention as time goes on. You won’t know what option is truly right for you unless you look at all of the relevant ones.

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Trade Extensions Trades Up Its UI and e-Negotiation Management Capabilities

About a year ago, I introduced you to Trade Extensions (TE) on the eleventh day of X-Mas. A provider of an extensive on-demand e-Negotiation platform, Trade Extensions is an emerging player in the global e-Sourcing marketplace — one that offers negotiation management, extensive RFX, and (reverse) auctions with embedded real-time decision optimization.

Since my initial coverage, Trade Extensions has made the following significant updates to their platform:

  • a brand new UI across their end-to-end system
    The new UI is crisp, clean, and click-minimal. It’s quick and easy to use and very self evident. Plus, their online help pages are very extensive and updated regularly by the entire TE development and consulting teams.
  • integrated data cleansing & classification capabilities
    Have to fix a lot of data? Just create a rule and map it, just like you’d do in a spend cleansing and classification system.
  • OLAP Reporting for Scenarios
    Users now have access to full OLAP capabilities when viewing scenario results and reports.

In addition, the following features, which I have not covered before, have been improved:

  • extensive modifications to their bid supplement functionality
    Data — pricing, discount(s), rebate(s), etc. — can be captured at any level (supplier, business unit, plant location, etc.) and used for mark-ups, discounts, qualitative scores, or as the basis for any formula(s) the user wishes to define.
  • flexible bid forms
    Not only does TE support full Excel integration, but bid forms can be designed by the user to fit their business needs. There’s no need to force your information into a single system format. A user can create additional worksheets, add columns and rows to existing worksheets as required and add macros and formulas without interfering with the platform’s ability to read completed bid forms.
  • outlier analysis and statistical reporting
    The platform can automatically detect bids that might be too high or too low and flag them for your review (after you define your outlier rules, such as specific bid field values x% away from average / historic / custom calculation). The platform also includes a number of statistics reports, including a parameter statistics report that contains a detailed analysis at the lot and bid level.
  • composed filters
    Filters, which allow you to define constraints on any set of suppliers, ship from locations, ship to locations, products, etc., can now be defined on other filters to allow for very easy, and very powerful, constraint creation.
  • selection sheets
    Excel spreadsheets can be used to define allocation constraints, discounts, penalties, and multipliers … greatly simplifying discount and constraint creation in many cases.
  • project management functionality
    100% integrated into the cohesive e-Negotiation platform, the project management functionality allows for the creation of phases and tasks, the allocation of resources to phases and tasks, and the creation of scopes (by supplier, geography, etc.) as appropriate.

They’ve also continued to increase its power. Consider a recent project run by a financial services firm that tendered all of the components of a direct mail project that would result in the mailing of 1.8 Billion documents. The project, which consisted of 65,000 items, 60,000 transport destinations, and 400,000 bids from over 100 suppliers was valued at $1 Billion with a “B”.

The project was to ultimately deliver documents to the firm’s customers, but to get to that stage each part of the supply chain needed to be tendered. This included design, paper supply, printing, assembly, and transport. The project was completed as a single tender with offers collected on-line and all components tendered concurrently. In addition, suppliers could make conditional offers that reflected their own efficiencies that could present the firm with further savings. This was a project that could not even be attempted by hand as it would take someone close to two weeks just to scan each bid. There’s no way someone could even fathom attempting to optimize this scenario if all they had was a spreadsheet solution that couldn’t handle more than 65,536 rows.

Finally, TE is one of the few players in the market to make their pricing scheme public.

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Become a Financial Superstar with The Receivables Exchange

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The Receivables Exchange, which bill themselves as the world’s first electronic marketplace for trading accounts receivable, simply put, allows businesses to sell their receivables to a global network of institutional investors through an auction (with an eBay-like “buy it now” option) and access working capital in as little as one (1) day. The model, which has been covered by a large number of leading publications (including BusinessWeek, Forbes, and Inc.) is very successful with 99% of all auctions completing and more than 90% closing through the buy-out option, sometimes in as little as thirty seconds!

So why should you care as a Procurement Professional?

In these troubled times, it’s your job to do everything you can to save the business money … and helping finance, who are probably just going to the local bank and accepting the (higher) rates offered on operating credit lines, save money on working capital counts. If you need 2,000,0000 of working capital for the next 30 days while waiting for payments to come in and you take a loan at 2.5% when you could sell your receivables (as an asset-based sale) at 1.5%, that’s 20,000 in financing payments you don’t need to be making. If you have to do it every month, that’s 240,000 of instant savings. And we all know that the financing terms can be much more onerous than just 2.5% for many small and mid-sized companies today, meaning that this can be a million dollar plus savings opportunity for many mid-sized businesses.

Not only can you point out this solution to your finance team, which is probably spending 2.7% of working capital unnecessarily on an annual basis, but you can use your procurement and customer expertise to let them know which receivables would be the most attractive to third party financiers and which receivables would command the best rates. This would go a long way to helping traditional finance managers, that probably see you as the “L” in “P&L” (as astutely noted by Mr. Guth on the VMO blog), understand the cost-savings potential of your department when your expertise is applied throughout the organization.

Furthermore, it’s also your job to keep tabs on the financial health of your suppliers and help your strategic suppliers out so that they are there to help you in the future. If you know that they are in need of more working capital, and you’re not in a position to pay them early (at a fair discount), you can point them to The Receivables Exchange and even help them with the on-boarding and due-diligence process.

So how does The Receivables Exchange work?

Unlike traditional factoring, which generally costs more and places much more onerous restrictions on your financing, The Receivables Exchange is completely anonymous, your customers are not notified that your receivables have been sold (unless you want them to be notified — which means there is no impact to a customer’s AP department) with a 100% transparent fee structure, that is free from restrictive covenants. You bundle one or more invoices for auction, define the minimum advance you require and the maximum transaction fee you’ll pay (for a 30 day advance), your optimal “buy it now” financing requirements, the auction start time (usually “now”), and the auction length (3+ days). Then 30+ buying organizations, which represent 15 Billion in A/R buying power, bid on your receivables and, if the requirements are reasonable, a few days later (1-10 depending on how long the auction takes to close and transfer time requirements), you have cash in your bank account. Then, when your customer pays your invoice(s), the advance, along with the lending fee, is paid to the buyer, a small transaction fee (that is typically between 30 and 60 basis points and determined by your z-score) is retained by The Receivables Exchange, and the remaining funds go into your bank account.

And it’s a sellers market right now. The exchange currently has buying power that is four times it’s current throughput with a number of Receivables Buyers still waiting in the wings to take advantage of the great supply chain financing opportunities that are being passed up by banks and other traditional lenders. The only downside is that the platform is currently limited to US-Headquartered sellers. You can list international receivables on the exchange, including receivables due to international units, but you currently have to be operating, and headquartered, in the US to take advantage of the exchange. When you consider that you can significantly decrease DSO at a very low cost of capital, compress CCC, and increase ROE in a matter of minutes once you are registered (as the auction environment has been optimized for the sale of receivables and the process of uploading your invoice and due diligence documents, bundling for auction, and defining your minimum and optimal terms has been streamlined to only take a few minutes, on average) and download their Adobe Air client, it presents a great opportunity for any company that needs to improve their working capital situation.

For additional information, you can contact Paul Hoeper (phoeper@receivablesxchange.com) directly.

Roll Out to Your Community with RollStream

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RollStream (acquired by GXS) is a new entrant to the emerging SIM-centric (Supplier Information Management – centric) subspace of Supply Chain Management that has taken a Web 2.0 inspired approach to its solution. At the core of its “Enterprise Community Management” solution is the belief that collaboration is the missing critical component in many of today’s supplier management solutions.

As a result, when it comes to ease of use and supplier on-boarding, it has developed one of the best, as well as one of the easiest to use, solutions for Supplier Information Management as many people today are familiar and comfortable with the Web 2.0 and social network like interfaces it has developed for supplier, partner, and contact profile management as well as for survey creation and information gathering. It’s scalability and ease of use has allowed one of its largest customers to on-board their roughly 13,000 suppliers and manage roughly 150,000 points of contact. The solution has assisted this customer in credentials capture, compliance, training and enablement, and new technology rollout.

But, as you know, SIM is only the first component of Enterprise Management, whether you call it Supplier Central (CVM Solutions), Extended Enterprise Management (Hiperos), or Enterprise Community Management. There’s also, depending upon your outlook, risk, performance, compliance, sustainability, diversity, dispute resolution, initiative management, and collaboration for innovation.

The RollStream solution addresses, in its own words, basic Supplier Information Management in the form of on-boarding and profile management, Dispute Resolution by way of on-line collaboration, Compliance and Risk Management by way of task-managed projects and web surveys, and Performance and Feedback Management by way of a workflow-based community dashboard and collaborative scorecarding process.

The Supplier Information Management component, which is what they started with, is mature, and as I said above, one of the best and easiest to use solutions that you’re going to find for SIM on the market today, used by a number of global Fortune 3000’s to manage supplier bases of over 10,000 suppliers and 100,000 contacts in a number of verticals. The collaboration components, with complete conversation and audit trails, simplify the online dispute resolution process and make it much friendlier than the alternatives.

The Performance and Feedback Management is good for simple surveys and on-line discussions, but don’t expect to be able to build any complex scorecards within the system at this point in time. If you have a solution that generates your scorecards as spreadsheets or PDFs, you can automate the retrieval and attachment of the scorecards within the platform and then create tasks around the discussion of the scorecards with the relevant individuals at each of your suppliers, which could be quite helpful, but you can’t yet build complex scorecards within the system or attach comments to individual sections. This should not be an issue for most companies in most verticals, but if you are very metric-focussed or use collaborative scorecarding and need to retrieve inputs as well as send them and integrate all of the scorecards into a common collaboration tool, you’ll need to evaluate the solution carefully.

This brings us to the last component — Compliance, Risk, and Sustainability Initiative Management. Their solution, which allows you to build as many virtual sub-communities as you want within the application, and then create as many task-managed projects around those communities as you want, is quite powerful in its simplicity when it comes to the management of these projects, but most projects will require data collection and the degree of data collection will determine its fit within your organization. If you primarily do indirect sourcing or simple commodity sourcing, the solution should be more than enough for your needs as most of the regulatory requirements can be captured in simple yes-no questions. But if you do direct manufacturing, where you have to deal with RoHS, REACH, and or WEEE, the simple survey-monkey style web-form survey capability isn’t going to cut it when you have to capture not only whether or not thousands of chemicals are present in your products, but to what extent they are present. Similarly, if you have adopted, or foresee the need to adopt, complex carbon measurement calculations which depend not only on if-then logic (which the forms support) but also complex built-in calculations, then you’ll find their solution is not ready for prime time.

So what’s the verdict? I think many companies will find that the solution meets their SIM-Centric Enterprise Community Management needs, especially when you consider that even the best solution will take at least a year to roll-out to thousands of suppliers and get them proficient on the solution. In that timeframe, you’ll see more capability added to the Performance Management and Compliance, Risk, and Sustainability Management components as RollStream continues to implement their solution roadmap.