Monthly Archives: February 2011

Oh No! App Mania Has Hit The Supply Chain!

Prepare to be nickel-and-dimed one feature at a time. It’s coming.

Unlike the author of a recent post in the SCMR blogs (where “Highjump says there’s an app for that”), I am not pleasantly surprised by the amount of effort being put into smartphone app development right now. First of all, there’s only so much you can do on a smartphone screen. For the vast majority of analytical supply management applications, smartphones just don’t make sense. Secondly, unless you have constant access to free wifi, you’re not going to want to download megabytes of data and push your mobility bill through the roof. Thirdly, the real value in supply management systems materializes when data flows from one to the next — and all of the relevant data is available. Data stuck in a standalone app that doesn’t do much more than display that data isn’t very useful.

Plus, do you really need 100+ WMS apps? Really? No! There aren’t 100 WMS applications, and if you think there are, then what you are really buying is 100 different instances of a WMS workflow engine custom tailored to a specific situation. You’re paying for 90% of the same functionality 100 times over. I guess it’s good for the vendor if they can create 100 apps by only doing the work required to create 11 and charging you for each and every app, but it’s not good for you.

HighJump, one company that plans to release up to 100 apps a year, may try to tell you that it’s a great idea because it is a way to get new functionality in your system without waiting for a new release, but you don’t need apps for that. If you’re using a true multi-tenant SaaS application, then you get every update the vendor makes as soon as its available, and you get it all for one maintenance fee.

In other words, if you want to needlessly empty the corporate bank account, there’s an app for that.

High-Definition Sourcing: Category Excellence Moves to the Next Level


Today’s guest post is from Paul Martyn, Vice President of Marketing for Bravo Solution.
Paul can be reached at p <dot> martyn <at> bravosolution <dot> com.

the doctor — along with many others — has been advocating for “next-generation sourcing” for some time. I couldn’t agree more that modern supply management organizations must take sourcing practices to the next level if they are going to continue to distill value from the discipline and practice.

But like most New Year’s Resolutions, while the aspiration to improve may be great, the effort may be too much for even the most committed. I see this a lot, especially when it comes the challenges of sourcing strategic, complex categories. Not without reason of course, but more and more I also see that the benefits of mastering the art of sourcing these challenging categories far outweigh the difficulties of the actual process.

Strategic categories mean different things to different businesses. For one company, the category may be transportation; for another, packaging material. The common denominator: the business can’t succeed without it, and can’t afford to over-pay for it.

To make decisions based on the most strategic objectives of the business, sourcing teams need to integrate many dimensions of information from areas well outside their domains. For example, if non-price factors like diversity or sustainability are part of the company’s corporate social responsibility initiative, those factors can — and should — be part of sourcing strategies.

As a result, the volume and the sheer variability of the information render common e-sourcing tools or Excel spreadsheets useless for collecting and evaluating proposals. That’s where high-definition sourcing — which combines technology, expertise and process — delivers the goods at the lowest total landed cost, and aligned with the greater organizational strategy.

So how do you know if high-definition sourcing can turn even the most complex categories into real value for your organization? There are generally three scenarios where the opportunity to apply this discipline will help you capture meaningful and sustainable savings

  1. The category leader is frustrated with traditional sourcing techniques
  2. The category is avoided by the faint of heart
  3. Sourcing alone will not deliver the value

Sound familiar? Odds are good that at least one of these reflects what’s happening in your organization. Regardless of which situation you face, there are immediate opportunities to be gained with high-definition sourcing

  • Use technology to design and execute more sophisticated proposal collection and analysis, including the ability to use “what-if” scenarios.
  • Build supplier performance monitoring and triggers for re-evaluating supplier selection into your category management solution
  • Partner with suppliers to drive costs out of the system and strike the perfect balance between suppliers’ pricing and capabilities with buyer business constraints and preferences
  • Tap domain and process experts to bring market and industry best practices to bear on your own sourcing process

The results will be well worth it. Best-in-class companies make the connection between complex categories and the business’ charter. Lowering initial costs is a given. More importantly, these leaders make better decisions based on capabilities and price and secure meaningful — and sustainable — savings.

Thanks, Paul!

That Expedited Shipment Has to Be On Time. Who Do You Choose?

No matter how much effort is put into planning, at some point a shipment is going to have to be expedited. It’s going to cost extra, but there is going to be no choice in the matter. The only choice is Fedex vs. UPS. Which should you choose?

PackageFox recently put together an informative infographic that compares and contrasts the two companies, and the net result is that, from a big picture, they are surpassingly similar. But one difference stands out. With 2.4 times as many jets, Fedex rules the air while UPS, with 4.63 times as many delivery vehicles, rules the ground. While there probably won’t be much difference for in-country shipments, if it is international, and has to go air, it might have to go Fedex.

For Successful e-Sourcing, Put the Supplier First

An article in a recent SIG Newsletter on “eSourcing from the Supplier’s Perspective: Improving Bid Submissions and Event Outcomes”, that was contributed by Denali (who deliver) made a couple of very good points if you want a successful eSourcing event. These points can be succinctly summarized as “design the event from the suppliers’ perspective”. If it doesn’t work for the supplier, it isn’t going to work for you.

As the article states, while many benefits are usually touted to the supplier to get their participation in an eSourcing event, at best, the supplier typically only realizes two benefits: fair(er) competition and an easy(ier) quote process. As a result, the supplier gets discouraged by the whole process and, if the supplier does not win a (significant) award, the supplier is unlikely to participate in future events.

Basically, you have to avoid “the reality chain” that is repeated over and over again as more and more companies hop on the eSourcing bandwagon unprepared for the journey ahead. In “the reality chain”

  1. Supplier begins with little or no knowledge
  2. Supplier reaches out, but receives no guidance on requirements or evaluation criteria
  3. Supplier submits a bid that does not meet the buyer’s need
  4. Supplier receives no feedback as to why
  5. Supplier is discouraged

As a result, not only is the buyer’s event only moderately successful at best, but the buyer’s potential supply base for future eSourcing events has shrunk. However, if the buyer had considered what suppliers want and supplied:

  • detailed RFX requirements
  • post-bid feedback
  • well thought-out RFX
  • more stakeholder communication
  • opportunity to provide alternative solutions
  • evaluation criteria

Even if the supplier lost, the supplier would be encouraged by the process (since the supplier would know why the lost and what they need to improve next time) and the buyer would not only have a successful event, but lay the foundation for successful events for years to come. In other words, if the buyer designs the event from the suppliers’ perspective, success is much more likely.

For more details on how to achieve the level of success required, check out “eSourcing from the Supplier’s Perspective: Improving Bid Submissions and Event Outcomes”.