Monthly Archives: June 2010

Intelligent Sourcing through Intesource

Founded in 1999, Intesource is another player in the e-Sourcing / e-Negotiation space, but one with a bit of a twist. Whereas most SaaS providers are trying to sell you the all-powerful self-service fluffy magic box cloud solution, Intesource is still focussed on providing a full-service offering. Specifically, while you are given full access to the platform, their sourcing experts, who have conducted tens of thousands of events for hundreds of companies with a combined supply base that consists of over 10,000 companies, handle all of the event details for you which frees your organization to focus on high-level strategy and analysis. (Of course, if you need guidance in that respect, their sourcing experts are willing to work with you to identify the categories that are likely to generate the greatest ROI.) This approach has proved very successful for them and their customer base, and they typically drive an ROI of 10x for their clients within one year.

In addition to their sourcing expertise, they also have the ability to deliver a customized platform, as they built their entire solution in-house. This customization can go beyond just look and feel and include integration to external systems or new functionality and customized workflows based on organizational processes and best practices.

Platform-wise, they have a fully featured e-Negotiation platform with extensive RFX, Auction, Supplier Information Management (SIM), and document/contract management capabilities, which integrates with Microsoft Sharepoint for those who want a (collaborative) contract and document authoring solution in addition to the ability to track contracts and associated meta-data. And while the platform is not multi-lingual, it is multi-currency and they are integrated with multiple currency exchange data feeds. As a result, up-to-date currency conversions are always available.

With respect to e-Negotiation, or the RFX and Auction component, a buyer can use a templated workflow, capture as much cost and supplier information as they need to, and iterate through as many rounds as required. Plus, there are thousands of templates available to choose from for just about every category imaginable, built up by the Intesource sourcing team over the last decade as they captured the knowledge and best practices that materialized from the tens of thousands of events they ran, many with the global sourcing teams of some of the largest food, beverage, and retail companies in North America (which are the verticals they have particular expertise in). These templates contain complete workflows, customized RFIs, and customized bid templates with all of the relevant cost components. This allows bids to be broken down into unit cost, transport cost, duties & tariffs, utilization costs, warranty costs, etc. And, of course, the auction functionality is full featured and permits suppliers to be ranked against each item, group, or total award; the auction to be automatically extended based on last bid time; and bids to require a minimum decrement.

With respect to Supplier Information Management (SIM), you can capture all of the basic overview, classification, financial, product, service, and catalogue information associated with a company and augment it with feeds from D&B that include risk indicators and MWBE information. You can augment this with your own categories and fields of interest, and collect the data with the built in RFI capabilities. You can also get current marketing pricing on a wide range of commodities, as they have integrated data feeds from over 160 market exchanges.

The document / contract management module is a straight-forward repository- based solution that lets you manage as many documents, and as many kinds of documents, as you want with meta-data indexing and search. Creation capabilities are available through Sharepoint integration.

Based on their extensive workflow capabilities, which supports the hundreds of customized templates that are available across hundreds of categories, they have built a solid e-Sourcing Project Management Module that allows you to not only track your progress, but build your own customized workflows and category templates which can capture a significant amount of detailed information with respect to each task.

Finally, Intesource has an extensive SaaS interface for the supplier as well as the buyer, where the home-page dashboard — which shows current events, previous events, offered awards, accepted awards, pending tasks, etc. — can be customized for each supplier as well as the buyer.

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George Kimball’s Tips for First-Time Outsourcing Buyers

Over on Horses for Sources, Phil Fersht recently ran a great piece on practical outsourcing tips over a pint which contained advice from George Kimball that is definitely worth your time.

The article contained nine essential tips for first-time buyers which can determine the difference between success and failure, including these too-often overlooked tips:

  • Get good advice.

    Don’t try to do it all in-house, and, definitely, don’t just “turn it over to the experts”. No outside advisor will know your business as well as you do. You need to find an outside advisor you can work with who will work with you to create the best agreement for your specific situation, as there is no one size fits all agreement for outsourcing.

  • Prepare to manage the contract and relationship.

    Weak governance — too few people, without sufficient clout, and accustomed to managing operations, rather than relationships — remain the single, most common, avoidable error among customers. A team needs to be built before the contract is signed and needs to be involved in the deal making process.

  • Tone matters more than people suspect.

    Not only does collaboration require good working relationships built on candor, civility, and trust, but you need to remember that the people you will be working with not only come from a different culture, but, likely, one that is much older than yours. (For example, civilization in China and India goes back thousands of years. They don’t want to deal with “children”.) Furthermore, the world is changing, and in just a few years, the “low cost” countries of today will be the economic powerhouses of tomorrow.

For the other six great tips, check out George’s practical outsourcing tips over a pint and if you really want to dive in, he recently published Outsourcing Agreements: A Practical Guide.

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How Will Your Organization Deal with the Sustainability Megatrend?

In a recent post we explained how “sustainability is the current megatrend”, but we did not give you any tips on how to deal with this information. In this post we’ll overview some of the advice provided in a recent Harvard Business Review article on “the sustainability imperative” and address how the sustainability imperative may impact your supply chain.

The first piece of advice given in the article is to learn from past megatrends. For example, in both the IT and quality business megatrends, the market leaders evolved through four principal stages of value creation:

  1. Cost, Risk, and Waste ReductionInitially, companies focussed on reducing costs, and on risks that could drive costs up and waste that also unnecessarily increased costs.
  2. Performance Optimization of Product, Process, or Business FunctionsIn this stage, businesses moved from doing old things in new ways to doing new things in new ways. Processes were transformed using new tools and methodologies so that overall operations were more efficient and more cost effective.
  3. Integration of Innovative Approaches into Core StrategiesInnovation was no longer relegated to a black-ops skunkworks unit as entire business strategies were built around continuous product innovation.
  4. Value Proposition Differentiation through New Business ModelsInnovation was extended throughout the enterprise and transformed the underlying business models.

So what do these classic stages of value creation mean to your organization, and, ultimately, your supply chain?

  1. Cost, Risk, and Waste ReductionIn this stage, a company will focus on outperforming competitors on regulatory compliance and environmental risk management. The company will implement trade manage solutions to keep abreast of current and upcoming regulations, switch to greener raw materials when a choice is available, and switch to suppliers with a lower carbon footprint.
  2. Performance Optimization of Product, Process, or Business FunctionsIn this stage, a company will optimize natural resource efficiency across the value chain. Products will be redesigned to remove environmentally harmful materials and reduce the environmental impact of the production process. Lean, Six Sigma, and related approaches will be applied where appropriate to minimize waste.
  3. Integration of Innovative Approaches into Core StrategiesIn this stage, sustainable innovations become the source of new revenue and growth. For example, the organization will switch from manual paper processes to automated systems to improve efficiency, move to the utilization and creation of energy efficient products, and embrace frugal innovation to capture an increasing share of emerging markets.
  4. Value Proposition Differentiation through New Business ModelsIn this stage, a company will embrace a new business model to the point where it permeates the corporate brand and employee engagement. For example, a car manufacturer may switch its entire product line to hybrids.

And that is how your organization will begin to deal with the sustainability megatrend.

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A Purdue Philosophy Degree — Literally Not Worth The Printed Paper

I found this recent article on Daily Finance on how “eBay halts indebted Purdue Grad’s diploma auction” very amusing. While I feel sorry for the alumnus, it strengthens my belief that a degree in the philosawfical isn’t worth the printed paper you hand over for the printed parchment in return. As per the article, the graduate said that his philosophy degree has not given him the means to earn enough income to cover his $470 per month obligations to Sallie Mae.

A degree is only an investment if it increases your income — and since most liberal arts degrees don’t lead to a job, these degrees are just expenses. So if you can’t afford them, i.e. if you can’t afford to flush the 30K, 50K, or 100K down the toilet that some institutions will charge you for the privilege of obtaining the degree, don’t borrow. It’ll only end in tears, as it did for this poor soul who racked up 97K in debt getting degrees in religious and women’s studies.

This Is Gonna End Well … NOT!

As pointed out by Dick Locke in his post from earlier this week on More Headlines You Hate To See, this is an actual headline from DailyTech:

Foxconn Makes Employees Promise Not to Kill Themselves

FoxConn is asking all of its “colleagues” to sign a “health and wellness” letter that includes, in one of the numbered clauses, a statement that

I will not harm myself or others

in response to Apple’s demands to do something about the “suicide problem” in a factory that has seen almost fifteen suicides in recent months. (KokuGamer.com) I think the nets that Foxconn chairman Terry Gou plans to build around the dormitories are going to be more effecitive. (source)

After all, how are you going to reprimand a dead employee? Flail him? He’s already dead, moron.

Hopefully Apple and Dell can figure out what failed and force Foxconn to fix the problem. (source)