Category Archives: Procurement Innovation

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.

Synertrade – Another European P2P Vendor Expanding Westward

While this vendor was effectively unknown in North America even a year ago, Synertrade has one of the broadest, and deepest, footprints in the S2P (Source to Pay) marketplace. And it has additional functionality, like innovation management, portfolio strategy, quality management, and a centralized supplier portal not generally found in most S2P platforms.

So while you might already have a dozen vendors on your P2P evaluation list, if your organization needs a solution that goes beyond the basics, this is one that should definitely be on your short list. Why?

As discussed by the doctor and the prophet over on the recent 3-part series that appeared on Spend Matters Pro (Part I, Part II, and Part III) [membership required], it has a number of strengths, including, but not limited to:

  • ease of use
  • role orientation
  • innovation management
  • risk intelligence
  • quick data integration

In addition, Synertrade is a well established with:

  • 16 years of P2P solution history
  • over 500 global customers
  • 15 global offices on 4 continents to support an international clint base
  • strong partner support

The Synertrade platform is a set of applications integrated across business processes to support an average enterprise in the full breadth of its Source to Pay activities. The 27 modules that are currently available (with another 6 coming by year end) can not only be configured as needed to support client requirements, but can be enabled or disabled as necessary, and the workflow adjusted accordingly, to customize the experience for each client, and each employee of each client.

The Source to Contract application contains RFX, auctions, and contract management capabilities with event (tender) management. The Procure to Pay application contains catalogue management capability (which supports the webshop), basic procure to pay, as well as order tracking and inventory management. In addition, the WebShop is comparable to any other web-based catalog purchasing solution with integrated EDI catalogs, custom catalogs, and free-form requisitions and checkouts. The Supplier Management application is built around a supplier database and supports supplier self-registration, qualification and assessment, certificate and document management, quality management, and development measures. The Purchasing Intelligence application, built around a harmonized data store that integrates all data from the platform and any relevant external applications (and pre-defined spend cubes), supports standard spend analysis, performance analysis, supplier scorecard analysis, and risk analysis.

There are a number of strengths to the platform, and major strengths include:

SynerConnect

The SynerConnect tool allows them to quickly map a client’s data to a common schema that has been developed using fifteen plus years of best practice data mapping and integration. With this tool, Synertrade can integrate just about any existing system or (real-time) (market) data feed that the organization wants to integrate in a manner of hours. Even obscure ERPs, custom-built supply management systems, and discontinued database products can be integrated quickly.

Risk Intelligence

The risk intelligence piece is quite powerful as it integrates supplier scorecards with Risk Methods and Ecovadis data and allows an organization, and a buyer, to evaluate supplier risk from multiple angles — financial, geographic, product/material availability, social responsibility, etc. The standard measurements and ratings can be overridden by the clients and the reports can be customized as needed. Plus, it is built on their analytics platform, which is built on Qlikview and extensive data cubes built up over years of platform extension (and cube definition).

Material Category / Supplier Portfolio Strategy

It’s great to know how much you are spending on a category, supplier, product, service, etc. and to be able to break it down across all of these dimensions, but if you do not know what to do with this data, that’s not that helpful. The Synertrade product helps buying teams and organizations overcome this by integrating the knowledge captured in the classic Kraljic matrix and the more modern AT Kearney Procurement chessboard and based upon this and extracted measures can recommended levers and strategies for categories, suppliers, and their intersection. This is extremely useful for organizations looking for a starting point in their strategic sourcing and procurement efforts.

For a deeper dive into Synertrade strengths, a full corporate SWOT analysis, a product selection guide, and an analyst commentary, see the in-depth three part series by the doctor and the prophet over on Spend Matters Pro (Part I, Part II, and Part III) [membership required].

Procurement is Complex. Is Your Platform Capable of Handling It?

There’s been a lot of analysis of Brexit — Britain’s decision to leave the EU — an analysis that SI has pretty much stayed out of. There’s a lot to be said about the issue, pro and con, and a lot of fallout that will occur in the times to come. But when you get right down to it, this is just another example of the dynamic, ever-changing nature, of supply chains — which cannot be predicted.

Supply chains are full of risks. There are risks that can be easily predicted, such as raw material shortages, strikes, fleet breakdowns, and so on. There are risks that can not be easily predicted — such as embargoes on regime changes, riots, and massive shifts in trade and politics almost overnight (such as what happens when a country votes to leave a political union that manages trade).

All of a sudden, your costs are changing. Some of your supply lanes are changing (as some lanes will no longer be feasible or viable for your carriers). And some of your partners are going away (as they decide that they don’t want to do business with you anymore or you decide they are too expensive). And you do not know how these costs are going to change, which lanes will suddenly be unavailable (or what new options will materialize), and which partners are the most likely to leave, or what the new supply chain will look like.

With so much changing, how do you figure out what your new costs are? Which carriers, and lanes, are viable? Which partners you still want to do business with, and which partners will still want to do business with you when all things are considered?

In order to figure this out, you need big damn cost models. Complex, formula-driven, calculations. Breakdowns that include all components, energy costs, labour costs, other overhead costs, logistics costs, storage costs, and other costs. Modifications for expected changes based on recent and projected trends. What if analysis based upon potential cost concessions for volume or cost increases for lack thereof. And so on.

And, as you should be well aware by now, advanced cost modelling, bill of materials, and value-optimization is not a capability found in the majority of Procurement platforms. Is it in yours? If it’s not, there will come a point, possibly very soon, where your platform fails to serve you. This is not something you can afford.

As the doctor has said many times, a modern procurement platform can be your salvation, but it has to be the right one. Or at least the right one for the task. The reality is, you might need two. If your organization has a lot of high-dollar indirect with complex transportation requirements but also has a lot of simple indirect and MRO, or has a lot of complex direct with a lot of simple or non-strategic tail spend, you might need an optimization-backed sourcing platform with a simple e-Negotiation suite for the junior buyers or a sophisticated direct sourcing platform with a tail-spend platform for the day to day Procurement professionals.

Before you get blindsided by an occurrence that has the potential to totally decimate your supply main models and destroy your cost baselines, make sure you have the right platforms in place to adapt and get the best value no matter what. Start now while your not-so-bright peers are taking this strange thing called “vacation”. You won’t be sorry.