Top SI Posts: What Are You Peers Reading? Part II

SI doesn’t do many top X lists, because not many are useful — but every now and again it’s informative to look at what is being read and ask why. In yesterday’s post, we summarized the top 11 posts from the first half of 2016. In today’s post, we discuss potential reasons as to why the indicated posts were the top posts from the first half of 2016.

If we analyze the top x posts, we see the following overlapping subjects, in alphabetical order:

  • Automation
  • Marketing
  • Platforms
  • Procurement Strategy
  • SRM
  • Supply Risk
  • Tail Spend

All of these revolve around platform, strategy, risk, and spend with (strategic) suppliers. Basically, your peers, enlightened as they are, are concerned with making the right decisions when it comes to identifying products and suppliers on which to allocate spend. This right decision revolves around a combination of cost avoidance, risk avoidance, and waste avoidance. The wrong decision can cost too much, come with too much (potentially devastating) risk, and cost the organization a lot of resources and effort over the long run to manage and control. All of this wastes time, money, and effort.

A Procurement organization with the desire to (someday) be best in class realizes that the only way it can do so when it is constantly under-resourced and under-funded is to be as efficient and effective as possible. It realizes that it has to build and maintain a sustainable value engine and focus on what matters — reliable supply, quality products and services, cost control (not savings), and value generation — and that this requires the right talent, technology and transformation from a laser focus on savings to a broad value focus on the organizational goals. A focus that understands and manages risk; that forms, adopts, and implements strategy; that gets all spend under management (even if that management is simply 3-bids and a buy or automated auctions for tail-spend so that the organization never spends more than market average and never gets less than market average quality); and that realizes that platforms provide power, but not solutions. Human intelligence is still required.

In other words, what SI has been focussed on since day one.

And that’s probably why these posts rounded out the top 20.

Top SI Posts: What Are You Peers Reading? Part I

SI doesn’t do many top X lists, because not many are useful — but every now and again it’s informative to look at what is being read and ask why. In today’s post, we’ll summarize the top 11 posts from the first half of 2016. Then, in tomorrow’s post, we’ll discuss potential reasons as to why these are the top posts from the first half of 2016.

#11: How Do You Find the Right Platform for You?

In this post we proposed an introductory four step process that could be used to help an organization identify the right Supply Management platform(s) to help it in its operations. This followed our two-part series on “what is a platform”.

#10: Ditch the Pepsi Blues, Already: Become a Marketing Procurement Asset Part II

In part II of this 2-part guest-post from Brien Seipel of Source One he noted that the next step for a Procurement organization that did not want to be ditched was to realign priorities and put the “marketing” into marketing Procurement. What does this mean? Check out the series!

#09: Can Your Platform Handle Direct? Take the Direct Procurement Challenge!

In this post we discussed how the direct procurement lifecycle was considerably different from the classic indirect procurement lifecycle (which is, by the way, cost centric perfect for indirect), and that an organization that wanted to get a grip on direct needed to understand this. We also noted that for an organization to figure out what platform was right for it, it had to take the direct procurement challenge.

#08: Don’t Let Tail Spend Take You For a Tail-Spin!

Tail spend is starting to get attention, and by right it should as this bottom spend often contains an overspend as high as 30%! Getting rid of this overspend can be as effective as saving 7% on the top spend.

#07: How Does Your State of Flux Measure Up?

In this post we noted that, in many organizations, SRM — Supplier Relationship Management, is in a state of flux. Policies are undocumented. Processes are not automated. Critical interaction data is not captured. And the majority of your employees interacting with your suppliers on a daily basis cannot even identify five of your top ten strategic suppliers. (Finance might hazard a guess, but while dollars spent is an indicator, it’s not a guarantee.) Something has to be done.

#06: AI Will Not Save Procurement — Thought Leaders Will

In this post we noted that despite the fact that Procurement is at a crossroads, and despite grandiose claims to the contrary about the power of AI-powered predictive and prescriptive analytics, AI will not save Procurement. Better systems will make us more efficient and effective, and power our Procurement Value Engine, but they will never be able to make decisions for us. They never have all the data, they never see beyond the numbers, and they don’t have the insight to look beyond what they are given. Their proficiency might increase, but it will never be perfect … and automating your Procurement function with them will simply automate your way to failure.

#05: Ditch the Pepsi Blues, Already: Become a Marketing Procurement Asset Part I

In part I of this 2-part guest-post from Brien Seipel of Source One he noted that organizations don’t ditch marketing procurement, they ditch bad marketing procurement and if you’re organization wants to get Procurement spend under control, the only way to do so is to become an asset, not a roadblock.

#04: Driverless Delivery? Tantalizing Theft Target!

Everyone loves automation and everyone loves Google’s and promise to automate everything — but automating deliveries is simply automating theft. Don’t believe it? Read the post!

#03: the doctor doesn’t like lists either, but the 50/50 is as good as it gets

The title says it all — warts and all, the 50/50 is the best Supply Management Vendor List out there.

#02: Failure to Monitor a Supply Chain for Risk Can Tarnish Your Brand

Supply chains are fraught with risk, but the biggest risk of all is the brand impact from an unexpected supply chain disaster that can destroy the corporate bank account.

#01: Aligning Procurement Strategies to Business Goals, Part I

This guest post from Torey Guingrich of Source One talked about how to align Procurement strategies to business goals, a necessity for organizational success.

Pool4Tool: Bringing The Direct Procurement Platform — And Message — To the Masses! Part III

In Part I, we began our discussion of the Pool4Tool platform by focussing on its Sourcing capability. Then, in Part II, we discussed their Procurement and SRM capabilities, and specifically, the catalog management capability, procurement requisitions, service management, the SRM portal, and the overall procurement workflow capability. In this third and final installment of our initial 3-part series on Pool4Tool, we are going to discuss the supply chain management capabilities, which is where many of the capabilities not found in traditional source-to-pay (or procure-to-pay) platforms designed with indirect in mind fall short for direct materials management.

The Pool4Tool platform contains a number of unique supply chain management capabilities, including deep ERP integration, document approval, VMI, automated order dispatch and order acknowledgement, Kanban, and quality control.

Let’s start with ERP integration. Pool4Tool supports extremely deep ERP integration and the integration to SAP is so strong, and the interfaces so useable, that it’s actually deeper than Ariba and more useable by its clients for SCM than SAP’s own interfaces in some cases.

It’s EDI integration with third party content is extensive as well. Third party feeds that have already been integrated include, but are not limited to, D&B, Ecovadis, and about a dozen other providers. This data can be viewed side by side with all internal system and supplier data to provide a true 360 degree view of a supplier that extends beyond the enterprise to the market as a whole.

One of the true strengths of the platform is the integrated VMI capability. Not only does the portal allow a supplier to self manage all of their data, see all of their purchase orders, get real-time visibility into their invoice status, and collaborate with the buyer, but it allows the supplier to manage inventory levels on behalf of the buyer. The supplier can keep track of stock levels in real time, manage deliveries to make sure stock levels do not fall below minimums or exceed maximums, and insure the buyer can run their operations smoothly at all times. This can take MRO to a new level and allow both parties to be more efficient.

And, last but not least, the bill of material support and integrated lifecycle costing with integrated budget management extends into supply chain management capabilities as well. The cost of a product is more than just the production cost, or acquisition cost, or sales cost — it’s the cost of distribution, the cost of maintenance, the cost of return, and the cost of raw material reclamation. The lifecycle cost can be many times more than what it costs to make a product, and the POOL4TOOL platform not only contains models to accurately compute that cost, but also to manage the acquisition, distribution, and support against a budget and track the costs across the lifecycle.

In other words, the capabilities of the Pool4Tool platform, while only briefly discussed in this series, go well beyond the average Source to Pay platform designed with indirect in mind and is, thus, a platform that should definitely be evaluated by any sourcing organization that does a lot of direct (material) sourcing.

For more information on why indirect platforms cannot support complex direct sourcing needs, see Sourcing Innovation’s recent white paper on The Direct Procurement Challenge. For more information on complex direct sourcing needs and the importance of efficiency and effectiveness in general, see the doctor‘s recent paper on The Procurement Value Engine, co-authored with the procurement dynamo. And check out the Pool4Tool platform.

For a deeper dive into Pool4Tool and their platform, see the recent 3-part series over on Spend Matters Pro [membership required] that does a very deep analysis of Pool4Tool and their capabilities. (Part I, Part II, and Part III.)

Pool4Tool: Bringing The Direct Procurement Platform — And Message — To the Masses! Part II

In Part I we began our discussion of the Pool4Tool platform, focussed on its Sourcing capability. Specifically, we discussed the RFX and e-Auction capability, the Contract Management capability, and the Catalog capability which can be used to kick-off Sourcing events or procure much needed products and services. Today, we are going to discuss the Pool4Tool platform’s Procurement and SRM capabilities.

It’s important to understand what the Pool4Tool platform does, and how it is different because, as we have been saying (in the Direct Procurement Challenge), indirect platforms cannot support complex direct sourcing needs and the Pool4Tool platform is one of the few platforms that can. (For more information on complex direct sourcing needs, see our recent paper on The Direct Procurement Challenge, sponsored by Pool4Tool, and for more details on the importance of efficiency and effectiveness, see the doctor‘s recent paper on The Procurement Value Engine, co-authored with the procurement dynamo.)

As per our last post, one of the capabilities of the Pool4Tool platform is a powerful catalog management platform that can be used to manage not only multiple supplier catalogs, internal and external through punch-outs, but also multiple requisition types and templates that can be reused as needed across sourcing and procurement projects. These catalogs can be managed by the buyer or by the suppliers themselves, and fully supports UNSPSC. The catalog is fully integrated into the e-Procurement platform and supports approval workflow by employee, cost center, or organizational unit. Requisitions can be approved in full or in part and (partially) approved requisitions can be automatically pushed into the ERP as soon as an approval is made. This can also kick off an automatic purchase order to the relevant suppliers (as requisitions can contain requests for products and services to multiple suppliers) and can do so in their own currencies (as not only does it support multi-currency, but even multi-currency within a single order).

The entire process can be kicked off by a Procurement Requisition from somewhere in the organization that can be made through the platform, be automatically routed to the right buyer, and kick off the right sourcing or (catalog) procurement process. This allows for all requests to be captured and managed in a central fashion. This is more important than you think as this allows all spend to be captured, tracked, analyzed, and brought under management.

In addition, service orders are deeply embedded in the e-Procurement platform and can be kicked off like procurement requisitions and tracked and managed through the entire process outside of the catalog or the standard PREQ if need be. Each type of service order can have its own workflow and approval process, can be tracked, invoiced against, and paid only when services have been rendered.

From an supplier point of view, the Pool4Tool Supplier portal is quite extensive. Suppliers can (self) register and create, and maintain extensive profiles. They can also manage their certifications, qualifications, insurance policies, and other documentation that is required by the buyer. They can access all their RFXs, auctions, communications, orders, invoices, and have a 360 degree view of their activities with the buyer.

Flipping back to the buyer view, the buyer can also use the portal to manage and develop their suppliers using the supplier development and (corrective) action management capabilities of the platform. And, like the buyer, they can get a full 360-degree view of all activities associated with the supplier. Past and present RFX and auctions, contracts, current orders and commitments, innovation initiatives, development activities, issues and corrective action plans, and overall supplier scorecards are all centralized. It’s a central point to get a comprehensive view of supplier capabilities, commitments, engagements, and possibilities.

In Part III, we are going to discuss the SCM capabilities of the Pool4Tool platform.

Pool4Tool: Bringing The Direct Procurement Platform — And Message — To the Masses! Part I

Hopefully you caught the recent webinar on The Direct Procurement Challenge or at least downloaded Sourcing Innovation’s recent paper on The Direct Procurement Challenge and realize that not all platforms are cut out for direct procurement. The majority of Procurement platforms were custom designed for indirect procurement and only handle those categories well.

The core issue is that direct procurement is typically much more complex than indirect procurement and requires capabilities that are not typically found in indirect platforms. As per our recent post on 5 Reasons Why You Need to Take the Direct Procurement Challenge, there are (at least) fifteen (15) capability requirements that a direct sourcing professional requires to efficiently and effectively source direct categories, and none of these are completely satisfied by indirect procurement platforms. To be more precise, nine are only partially satisfied and six are not satisfied at all.

That’s why you need the right platform, with the right capability, and an understanding of what that capability is and how to use it. Pool4Tool has been heavily focussed on educating you on the why (with the aforementioned white-paper, a two-part white-paper on The Procurement Value Engine Part I, and upcoming papers on Value-Based Sourcing and Virtual Procurement Centers of Excellence), and core capabilities to look for, so in these posts we are going to discuss the Pool4Tool platform and some key capabilities it has to support your direct procurement.

Pool4Tool has a very extensive platform with capabilities that not only span the traditional Source to Pay process, but also what we’re going to call the Procure to Produce process, as it can also manage inventory and production processes as part of its PLM capabilities. And all of this, as anyone who read the paper or attended the podcast would infer, allows everything to be done in a very supplier centric manner so that all of the needs — material composition, quality, delivery, etc. — can be evaluated in a balanced fashion against each and every supplier.

Pool4Tool capabilities can be divided into 4 (four) major buckets: Sourcing, Procurement, SRM, and SCM. Today we’re going to tackle the sourcing bucket.

Pool4Tool sourcing capability consists of standard RFX and auction capability, which is found in any e-Sourcing platform, but also includes sophisticated cost breakdown analysis and bill of materials support. A key requirement for any direct platform is bill of materials (BoM) support, and the need for BoM support is a key differentiator between indirect — where you are buying finished products for use or distribution — and direct — where you are buying dozens, if not hundreds, of raw materials and components to complete a product. Furthermore, these cannot be purchased separately or put out in separate lots as they all have to be compatible and meet rigid, interlocking, specifications in order for the product to be properly assembled and meet the quality requirements. In the Pool4Tool product, the Bill of Materials can have as many components as needed, and can be included in the cost breakdown analysis which can also include energy costs, labour, and overhead costs. This analysis can be done by product by supplier and insures that only useable bids are considered.

In addition to RFX and auction capabilities, designed for direct, it also has contract management capability. The contract management module, while not a best of breed enterprise contract management solution with deep authoring support, is just as good as the contract management capability found in the majority of sourcing platforms, and includes the capability to store and index all necessary documents required by the sourcing process, as well as search the (meta) data associated with those contracts. Finally, it also has deep catalog management capability that can store all direct, indirect, and even standard service requirements required by the company that can be used to either (insta-)buy products and services as needed or kick-off sourcing projects by populating requirements in RFX or auctions.

In Part II, we will discuss the e-Procurement and SRM capability of the Pool4Tool platform.