Statess Wants to Stabilize Your State of Flux Part II

In our last post we introduced you to Statess, a relatively unknown solution provider in the SRM space on this side of the pond even though they were conceived from State of Flux who have been producing leading SRM research reports for six years, in business for eleven, and are a leading provider of SRM consulting in the UK.

We discussed how they offer a SRM suite focussed on performance, contracts, risk, innovation, relationship, and sustainability management with over fifty sub-modules that address dozens of facets of performance, risk, and relationship management. We also noted how the platform could, if needed, be used for category management in addition to contract management, CSR management, and even the management of overall supplier development programmes.

The first thing to note about the Statess SRM platform was that it was designed to be modular, flexible, and adaptable. This means an organization can not only choose only the functionality that they want from such a platform, but can configure it how they want and even customize the terminology used in the UI. Even if an organization could use all of the functionality, sometimes a staged roll-out with limited functionality is best at first as this allows training to be focussed and prevents users from getting overwhelmed and avoiding the system. (And if the organization has systems with some of the functionality and wishes to keep using those existing systems, disabling duplicate functionality makes sure that the users don’t get confused.)

The next thing to note is that this web-based platform is highly configurable. Not only can the user define and customize reporting dashboards, as one would expect from any modern tool, but the user can design and customize their home page and the view for the entry point to every module they have access to. Basically, not only do all reports have overview widgets, but all action types have summary widgets, particular to what the user can see and do, that can be shown or hidden, rearranged as the user sees fit, and customized from a look-and-feel perspective. This allows the user to create a page that focusses on upcoming and overdue actions, quick access to artifacts (such as contracts, audits, certifications, etc.) stored in the system that they need to review on a regular basis, and entry points for key tasks that the user performs on a regular basis instead of just a shiny dangerous and deadly dashboard (which is where most systems stop).

After this, the next most important thing to note is that the user can create views from both an organizational perspective and a supplier perspective. The latter allows them to focus on a 360-degree view of a single supplier, as opposed to just an organizational view from a performance, relationship, or contract perspective and even replicate what the supplier will see based on what information they choose to share (with the supplier). Furthermore, from this view they can create or access any data or system artifact that relates to the supplier, regardless of the module it lives in as well as initiate new survey, innovation, or development programmes. The system maintains the necessary multidimensional relationships between the different data elements to enable the buyer to rapidly configure and access multiple views. Just like the best insights in a spend analysis project often come from looking at the data in unconventional ways, the best insights into supplier performance and, most importantly, development opportunities often come from looking at the supplier (data) from multiple perspectives. Statess realized this and built a tool that could support these multiple perspectives.

And the last point we are going to note in this post is that the platform, while quite extensive, is still looked upon as an early stage solution and is being actively, and aggressively, developed and more (and deeper) functionality will materialize over time, as well as more integrations to third party systems and data sources to shorten the average implementation timeframe and progress towards even more of an “out of the box” solution.

In our third, and final post in this initial series on Statess, we’ll overview some of the key capabilities of a few key modules.

Statess Wants to Stabilize Your State of Flux (Part I)

These days an average organization has a lot of uncertainty to deal with as a result of sustainability, regulatory, and risk headaches that plague it on a daily basis. These headaches range from paperwork headaches to regulatory migraines to minor delivery hiccups to major supply chain disruptions depending on whether an import form wasn’t received on time, certification requirements for key personnel were not completed, a strike erupted at a major port, or an earthquake destroyed a major production plant.

However, that uncertainty can be reduced with good planning, monitoring, and execution. Somewhat ironically, achieving this requires proper planning to identify the right processes and technologies that can be used to not only monitor the supply chain for events that can cause disruptions, but create mitigation and continuity plans that can be executed at the right time. And while it’s not always easy to identify the best processes, it’s a bit easier to identify the right kind of technologies. An organization that wants to reduce uncertainty needs to implement systems that monitor for events outside of its control that could increase its organizational risk and cause unexpected disruptions and it needs to implement systems that monitor for issues inside of its control that, if left unchecked, could increase risk or decrease effectiveness. One of the most important systems in this latter category is a SRM (Supplier Relationship Management) system because an organization’s suppliers, that often are the recipients of up to 80% of organizational spend, represent one of the biggest known, and manageable risks, to the organization.

While SRM solutions aren’t new, new SRM solutions are still being developed, and one such SRM solution that you likely haven’t heard of that could meet your organization’s needs is Statess. Although it’s a relatively new solution, it’s quite mature for its age as, unlike many solutions that first hit the market, it was not developed by a new software company but originally conceived of over six years ago by State of Flux, a mature, eleven year old provider of Supplier Management consulting, training, and research services (that recently rebranded their technology division as Statess). Even though you may never have heard of them, as they are on the other side of the pond, State of Flux is a leader in best practices and thought leadership for Supplier Management, and has been producing the “Global SRM Research Report” for the last six years. That’s longer than a number of self-proclaimed industry leading research firms on this side of the pond have been around!

As a result of this research, and the consulting they did for their clients, they not only quickly realized the need for a proper tool to manage supplier relationships, but realized that if the tool was not designed to streamline the common operations and adapt to the organization’s needs, it would not be effective. Based on this, they set out to design a tool that would work for the average organization it served and not end up as another piece of shelfware. Such a tool would not only have to help manage relationships and performance, enforce compliance, and mitigate risk, but also promote supplier development, allow for cross-organizational team collaboration, and, most importantly, go beyond just management to encourage true supplier innovation. In addition, depending on organizational need, the platform may need to support and manage contracts and categories, address sustainability and Corporate Social Responsibility (CSR), and manage overall supplier development programmes.

It’s a pretty tall order, but the new Statess supplier management platform meets the bill with core modules for relationship management, performance management, contracts management, risk management, innovation management, and sustainability with over 50 uniquely defined sub-modules that address different aspects of contracts, performance, risk, innovation, and relationships.

In our next post we will begin to discuss the capabilities of the solution in detail and how it addresses each of these core issues.

Societal Damnation 40: Crime / Piracy

These damnations have been around longer than supply chains, and they aren’t going away any time soon. THe only difference is that today the types of crime an organization is exposed to today are much more varied than the crimes an organization was exposed to in the past. For example, terrorist attacks, identity theft, and cybercrime were not something the average large organization had to deal with on a regular basis, if at all.

But now, terrorist organizations, many of which are composed of individuals who are ex-military or trained by military and/or government agencies, are becoming common in many countries where there is significant civil unrest or animosity towards a people or government. And these terrorist organizations often target large shipments of goods that they need to sustain their efforts near the territories that they are based in — and this is not just restricted to weapons but also includes fuel, food, clothing, and personal electronic devices. It’s not just common thieves and criminal groups plotting to steal a few boxes or empty an 18-wheeler when the driver takes a lunch break — it’s a terrorist organization planning to steal an entire convoy of 18-wheelers (because they want the trucks too).

It used to be that identify theft was when one person impersonated another to fool an unsuspecting individual at a company or bank to gain access to funds or products, and this could easily be protected against by good security measures, passwords, and biometrics, but now we have the situation where the identify of entire companies is being stolen. This has become especially prevalent in the US since the introduction of MAP-21 (which SI likes to call RIP-21) which resulted in thousands of small transport companies going out of business when the minimum bond was increased from 10,000 to 75,000. Shortly after this happened, some very enterprising individuals decided to setup fake companies that pretended to be the company that was out of business. They faked registration documents, insurance certificates and bonds, and personnel records, presented themselves to 3PLs that the company previously worked with (stating that they managed to raise the bond money and were back in business), and even presented themselves to large manufacturers and retailers the company used to do business with. When contracts were awarded, they acquired trucks, hired drivers, and made deliveries. Some of them even operated just like a legitimate company for months until they were trusted with a multi-million dollar shipment of products that would fetch a similar sum on the black market — then they vanished overnight with millions of dollars of products. (See SI’s post on how increased cargo theft is the next impact of MAP-21.

And cybercrime has hit entirely new levels. It used to be that the best a hacker could do was steal a bank account number and password, do an ACH transfer, and make off with the operating account. But now, hackers can infiltrate your networks and make off with all of your bank account numbers and passwords, hack other networks and replace the corporate director and officer records, falsely represent themselves as your company to banks and lenders (by stealing the identities of your corporate officers and then hacking your virtual private networks and spoofing your IP addresses to access your bank accounts in what appears to be a legitimate access by the bank), take out massive loans and not only make off with every dollar in every account you have, but leave your company on the hook for millions more. And that’s if the hackers are being nice. Plus, while the hackers are at it, they hack your merchant terminals, steal all of your customer’s credit card information, sell it on the black market, and leave you with a massive media black eye that puts your brand reputation in the toilet.

If you thought the Fraud and Corruption (as chronicled in Damnation 41) was bad, just wait until you have to deal with the new terrorists, identify fraudsters, and cyber-criminals. And if you survive this first wave, then you get to deal with the Somali pirates! (And they are a whole lot meaner than the Saskatchewan pirates.)

Environmental Damnation 15: Waste, RoHS, & WEEE

Waste is bad, and legislation that requires waste to be minimized, dangerous chemicals and compounds to be avoided, and products to be properly recycled and reclaimed and safely disposed of is good. But it’s not good for your supply chain if new legislation comes into effect faster than you can react.

While all products should be designed with recycling and reclamation in mind, it takes time to identify new designs that use safer materials, build new production lines, and get the products to market. And while efforts should currently be in progress to redesign each and every product that contains a substance restricted in at least one major market, sometimes a design does not yet exist that uses an alternative chemical or compound and a more restrictive or new legislation could threaten a major product line.

This is becoming more likely by the day. While the US might not be as advanced as the EU in terms of environmental legislation, some states, like California (which just sent “a bumper crop of environmental legislation” [nrdc.org] to the Governor) are making a push and it won’t be long before it’s even harder to get products approved in some states than it is in the EU. Furthermore, as noted by SI in the past, when even countries like India and China (through the initial Order 39 in 2006 and the updated version in 2012) are considering more restrictive Environmental Legislation (which can be thought of as their own version of RoHS – the Restriction of Hazardous Substances Directive, one can be sure it won’t be long before this type of legislation become the norm and not the exception.

And while there is a lot one can do to prepare for the coming reality, it all takes time, money, and preparation.

First of all, one needs to make sure the organization has a good bill of materials system in place that tracks each and every compound and chemical that is used in each and every product produced, imported, and exported.

Then, one needs state of the art trade document management systems that properly completes all of the necessary import and export documents to make sure that, provided the goods are compliant, they are not held up or confiscated at the border.

Finally, one needs to implement a good online collaborative design solution that will allow all parties within the company and its partners to design, and produce, alternative products that are compliant with the relative legislation where the company wishes to produce the product or import it for sale.

And while all of these systems are systems that the company should have in place regardless of current or expected legislation, it requires time to identify the right systems, implement the systems, and learn to use the systems to their maximum potential.

Infrastructure Damnation 11: Postal Services

While most Supply Chains don’t run on public postal services, and instead rely on private transportation companies for both their freight and package delivery needs, public postal services are still needed. Why?

Without public postal services, there would be an effective private monopoly in mail and package distribution. While there are multiple private options, without a public body to set baseline prices, there is no incentive for the private companies to be competitive. As long as the private companies thought they could charge more, it is very likely that rates would increase across the board, consistently, until the average company switched to independent bike couriers.

More importantly, without public postal services, the average consumer would not be able to afford to shop online as much as she does now, which would likely lead to an across the board decline in sales for many companies, which would, of course lead to a decline in order volumes and Procurement’s negotiating leverage with its suppliers.

And this is looking like a reality in multiple countries right now. As discussed here on Sourcing Innovation over the last few years, The First World Postal Services Are in Trouble and the, US, UK, and Canadian public postal services are all deep in debt and may need to drastically reduce services in the coming years in order to balance the books and keep in business. Consider SI’s recent posts on the US, UK, and Canadian postal services (including, but not limited to, our posts that asked if the U.S. Post Office Can Be Fixed and Too Bad the US Post Office Did Not Follow Royal Mail’s Lead). They are billions in debt (Canada Post is over 1 Billion in debt exclusive of pension liabilities, the recently privatized Royal Mail has a debt to equity ratio of 91% (which puts its debts at over 1 Billion US Dollars, and US is over 100 Billion in debt (cnsnews.com) when underfunded pension liabilities are taken into account, and it’s not getting any better.

While one may think that this will never happen, as Canada has had its own public mail service since 1867, the US has had a reliable public service since the Pony Express started back in 1860, and the UK has had public mail since 1516 — but we could be just a few years away from the day it’s private bike courier for mail and small packages (and we need a Dark Angel for reliable deliveries). It is likely that Royal Mail is only still in existence because it was privatized (and that postal services in North America, if they do not drastically restructure operations, will have to follow suit).
And while you might not see a large impact to your supply chain, since the 3PLs and trucking companies are here to stay, when your order volumes decline and you have to pay double just to send a contract across town, you will.