Category Archives: RFX

Wham Up Your Direct Sourcing with EffiGO!

EffiGO might not be a name you know, as they spent the first decade building, deploying, and growing primarily in India (where they have over 150 enterprise customers including some of the largest names in India in Construction, Manufacturing, CPG, Automotive, IT, Pharma, and Chemicals and have sourced and procured over 25 Billion in Spend), but they now have a growing presence across Asia, the Middle East, and are just starting to expand into Europe (with America coming soon).

However, it now is a name you should know because they built the system from the ground-up to be a complete purchase requisition to invoice approval system with all of the key sourcing and procurement steps in between for indirect (and tail spend), direct, rate-card based services AND complex (project) procurements for their customers — whatever their customers needed. And the foundational “plan to pay” from purchase requisition to ok-to-pay suite can be obtained by a LMM or SE (Large MidMarket/Small Enterprise) at an annual license cost starting at 100K. Integrations, and they highly recommend integrating to the ERP (where they have integrated with most major ERPs multiple times including, but not limited to SAP, Oracle, Infor, Dynamics, etc.), custom configurations, and services are extra, as with any other major player, but the license cost makes it affordable for the mid-markets who need a direct/complete sourcing solution.

The core of the EffiGO platform is broken into two main modules that cover the two main work streams:

Plan to PO

The Plan to PO component consists of the creation/acceptance of the Purchase Requisitions (which can be pushed from the ERP or manually created in the platform), the creation and execution of the sourcing events, the selection of the award, and the definition of the contract that orders will be made against.

Once a Purchase Requisition is pulled in from the ERP or manually created by a user in another organizational department, the user will see it in EffiGO and can pull it up, see all the details, edit those details (including, but not limited to the goods and services requested, the units, the delivery dates requested, the payment terms, etc.) or request an edit if they don’t have the authority, and approve it for sourcing.

With respect to core sourcing, the platform supports:

  • RFX – Quick
  • RFX – Full (with or without TechnoCommercial Evaluation)
  • Auction
  • Reorder (from a past RFX created in the last quarter)
  • Order from Catalog (for products where [rate] contracts are in effect)

RFX (and auction) creation starts by selecting one or more approved requisitions to kick-off an RFX (or auction) process, selecting the event type, entering basic information (name, business unit, event owners, business unit, desired delivery locations, currency, etc.), and determining whether the event only requires commercial specifications and terms or detailed engineering/technical review and a weight-based award based on commercial terms and product/supplier review.

Note that the system will inform the buyer if one or more parts or items in one or more of the requisitions they select is either in inventory and/or already under contract and can just be fulfilled without going through a sourcing event.

Once the basic event criteria have been defined, and the items and quantities confirmed, the user is walked through the remaining configuration steps that include:

  • documentation – standard organizational terms and conditions, NDAs, and other project specific documents (which can be pulled in from a central library) or uploaded
  • price tables – the platform supports pre-configured bidding templates for different categories and products (that can be associated with any level of the product and service hierarchy they support), which can include non-price components, and the user just needs to select one
  • vendor selection – the buyer can search for vendors by group, category, location, etc. and add them one at a time or in groups
  • dates: clarification questions, bids, follow-ups (if requested), notifications, etc.
  • review criteria: techno only – select the template that will be used for product/services/vendor review and scoring

Note that since the requisitions can be pushed in by the ERP, they can range from a requisition for a single item to a requisition for a complete bill of materials, each item or part can be associated with its own cost breakdown table defined in the EffiGO platform, each part can have its own associated documents, including drawings and detailed product specifications, which can be included in the ERP push, pulled in from the EffiGO library, or even pulled in from a (n optional) PLM integration, and the cost tables can also include service cost rate tables as well. To make bidding easy for the suppliers, the bid sheets can be pulled down into Excel (and then re-uploaded), and that can be done on a product or event basis (and then the workbook will be multi-tab if different cost models are required for different parts and/or service rate cards).

If the sourcing event is being awarded on commercial terms only, then the application will select the lowest bids at the part, bundle (grouping), or RFQ level for award, and if the buyer approves, the award selection(s) can be output for offers, letters of intent, and contract negotiations, one per supplier. If the sourcing event is on commercial and technical, the commercial are auto-scored and the buyer scores the technical components, and then the award can be auto-computed in the application according to the award level.

Once a contract has been signed, it can be uploaded with all of the terms and conditions defined (and all meta-data from an associated event can be associated with the contract), and custom completion requirements can be specified in the meta-data to make sure that all POs go out with those requirements (and they are not forgotten — more on this in our discussion of the PO to Pay module).

PO to Pay

The PO to Pay component consists of the creation of the purchase orders, the management of the purchase order and assurance of contract terms and conditions, the management of associated communications (acknowledgements, change requests, ASNs, etc.), the acceptance of the invoices against the orders, the processing and approvals, and the creation of an ok-to-pay push notification to the payment system.

When a buyer is ready to place an order, the buyer can create a purchase order:

  • off of an RFQ
  • off of one or more catalog items which may or may not be under contract (but are approved for purchase)

As with sourcing, if the buyer selects an item that is already in inventory or under contract (and can be requisitioned without any approvals), the system will inform the buyer.

As with any other system, a purchase order consists of items, units, approved pricing, delivery locations, dates, and other key pieces of information. Unlike other systems, the buyer can specify a full host of requirements that must be met before the PO can be issued, acknowledged, and dispatched against which include, but are not limited to:

  • whether an Ack(nowledgement) is required
  • whether acceptance is mandatory
  • whether an ABG (Advanced Bank Guarantee) is required
  • whether a [C]PBG ([Contract] Performance Bank Guarantee) is required
  • whether a LC (Letter of Credit) is required
  • whether the vendor needs to submit any technical documentation
  • whether the requesting buyer needs to provide the vendor with any instructions or documents
  • whether stage monitoring is required (and what the stages are; these can be selected from pre-configured or PLM lists)
  • whether transportation is in the scope of the buyer or vendor
  • whether the vendor is required to submit dispatch instructions
  • other potential organizational specific requirements around purchase orders (for certain products, services, or categories)

When a vendor receives the purchase order, they also receive all of the associated documents and information provided by the buyer along with all the instructions they need to follow and requirements they need to meet to make a delivery AND get paid for it.

Once a vendor has dispatched (part of) a purchase order (which is also tracked against an RFQ to make sure that they never dispatch more units than they have been approved for), they can submit an invoice, which is associated with the order, which goes into an approval queue. Approval chains can be configured to be as simple, or complex, as needed, with as many steps as necessary.

Catalogs are buyer maintained. Suppliers can upload and submit catalogs to the buyer, but they don’t go live until approved by the buyer, who can accept or reject items and pricing. Once awards have been made and/or contracts have been signed after the issuance of a sourcing event, the buyers can create catalog items with the details and pricing, and mark them as under contract if a contract is signed or the rates are approved (if the supplier is willing to honour the quotes in the latter case).

Catalog items can have as many buyer standardized fields as needed to completely specify the item, which can be searched by type, category, supplier, location, status, and keywords against key fields. All items can be associated with their proper place in the organizational category hierarchy, which can be as deep as required. (Note that vendors can identify the categories they service up to Level 4 in their profile.)

Vendor Management

Required vendor information management is embedded throughout the process and is included with both of the core modules and includes vendor onboarding as well as ongoing information management, reviews, status updates (which can block on a category, unit, or organizational level), and insights (through the built-in reporting).

Vendors can be loaded from the ERP on implementation or created inside the platform. Vendor profiles in EffiGO consist of basic corporate details (type, corporate id, taxation registration, primary category, HQ, etc.), deep business details (registered and correspondence details, production locations, etc.), financial info, registration & certifications (statutory, documents, etc.), sustainability information, declarations, and audit log. Additional forms can be configured on implementation to capture any additional information that the buyer needs to track.

In addition, the buyer can maintain the vendor status and whether or not they are approved on a division, or even category basis. Unapproved vendors can be invited to events by an authorized user, but cannot be sent POs, or approved for payment.

Vendor Portal

A vendor has their own portal to interact with the buyers on the EffiGO platform. While they will get email notifications of every sourcing event, change, award, contract offer, purchase order, change, information request, etc., many actions will need to be taken through their portal (for which they will get a direct link to do so in the e-mail). This is because communications, acknowledgements, change requests, etc. need to be associated with the right event or purchase order, key documents need to be secure, and the organization needs to make sure invoices (with payment instructions) are not tampered with.

Summary

EffiGO is a very different kind of platform — one that was built to serve manufacturing clients in Construction, CPG, Automotive, IT, Pharma, and Chemicals from the ground up and one that ended up being a direct-focussed system that can also handle indirect, services, and complex project procurements as well! It’s a name you don’t know, but if you have a mix of direct, service, and indirect needs, one you should know — especially if you are based in EMEA where EffiGO is currently expanding to!

Technobug
Technobug
Technobug
Technobug

It puts the boom-boom into my heart (hoo-hoo)
It sends my soul sky-high
When the PR starts
Technobug into my brain (yeah, yeah)
Goes bang-bang-bang
‘Til my keys do the same

But something’s bugging me
Something ain’t right
My best friend told me
What he did last night
When I was sleeping in my bed
I was dreaming
But I should’ve been Sourcing instead

Wake me up for EffiGO-go
Don’t leave me hanging on like a yo-yo
Wake me up for EffiGO-go
I don’t wanna miss it when we hit that high
Wake me up for EffiGO-go
‘Cause I’m not planning on Sourcing solo
Wake me up for EffiGO-go
Lets get Sourcing tonight
I wanna hit that high, yeah yeah!

ERP Procurement Not Working? Then I Ask Ya: Why Don’t You Look At Axya!

Axya was founded in 2019 to help traditional direct (custom) manufacturing companies modernize procurement and supplier management and become more effective and efficient in both processes than traditional ERPs — that barely allow a customer to send purchase orders, track inventories, and maintain basic supplier profiles — will allow. This, of course, is a far, far, cry from where manufacturers need to be today (but where many are stuck when the majority of S2P solutions were designed for indirect and few were designed with traditional custom manufacturing in mind).

The Axya solution has 3 primary modules / capabilities on the buy-side:

  • sourcing
  • order management / procurement
  • supplier management

All designed to supplement the ERP where it is weak and help a contract manufacturer manage its direct sourcing, procurement, and supplier management. We’ll take the modules one by one and discuss their core capabilities.

Sourcing

The sourcing module is designed to take a part or bill of material from the ERP, create an RFQ, and allow a buyer to complete that RFQ and execute a sourcing project. When a requisition is created in the ERP, it is automatically pushed to Axya through direct integration, and will include any attached part or component diagrams. (Axya supports most of the major ERPs — including SAP, Infor, Epicor, etc. — and has integrated with them numerous times across its 100+ customer base.)

The RFX module is quite straightforward. When a buyer logs in, they see the RFQs assigned to them, including the ones newly created by an ERP push that needs to be completed, and can select one to work on. The RFP consists of the header information (name and number, dates, master documents, and status), the part list (populated from the Bill of Materials), and suppliers — which the platform can be configured to auto-select based on the part or components or to force manual selection. The buyer can alter the list to their liking from suppliers loaded into the application and each supplier will receive their own, secure, copy of the RFQ.

The platform supports internal chat between team members and external chat between team members and suppliers, each in the supplier’s own portal and/or e-mail box (more later). In addition, if not all of the required documents needed to detail the part creation are in the ERP, the buyer can upload additional documents before the RFQ is sent. In addition, the portal tracks which documents are accessed, when, and by which suppliers. (And if any part of the BoM needs to be updated, the change can be made through the Axya platform.)

Once the quotes are in, the buyer can see them side by side for easy comparison. At a part level, the buyers can then select a supplier for an award, or have the platform auto-select the the lowest cost supplier for each part and then generate an award that can be saved and pushed back into the ERP.

Procurement

When a purchase order is created in the ERP (off of an award), it can automatically be pushed to the Axya platform where, like an RFQ, it can be managed through the platform. In the Axya platform, the buyer can see the status of an order (sent, acknowledged, in process, shipped, in receipt, complete). The buyer can, through the portal, communicate with the supplier, review change requests, track order (and revision) history, and do 2-way order-receipt matches.

All supplier communication, directly or indirectly, goes through the platform, the buyer can make manual updates at any time, and can set up automatic reminders to notify the supplier if a certain time has passed since receipt, acknowledgement, last shipment, etc. to make sure the suppliers are reminded on a timely basis.

Supplier Management

The supplier management module allows the buyer to maintain extensive supplier profiles that go much broader, and deeper, than what the ERP supports. Supplier profiles can be customized on implementation and can contain deep details on certifications, insurance, specializations, technology, locations, etc. It can support metrics, documents, notes, custom forms, specifics per shop, and any other requirement the organization needs to track.

In addition, the platform can be used to store all contracts related to the supplier (but the platform does not support contract negotiation, signature, or lifecycle management) for quick search and retrieval.

The platform also associates all RFQs, active POs, and metrics with the supplier. These metrics are operational metrics and include total requests sent, responded, awarded, and their value; orders sent, in process, shipped, and complete; and overall success rates.

Dashboard

A buyer logs into the dashboard where they can see a summary of the RFQs, orders, and supplier requests in the system (where information is gathered/updated through forms), as well as see a summary of critical information that includes:

  • new orders pulled in from the ERP
  • unacknowledged orders
  • orders that need attention (revision requests, late)
  • new requisitions pulled in from the ERP (which templated new RFQs)
  • RFQs in progress
  • RFQs requiring attention
  • unread messages
  • … other tasks that need to be performed

In addition, the buyer sees key summary information through widgets that can be drilled into for quick task access, which include (but are not limited to):

  • various order status dashboards
  • various RFQ status dashboards
  • various request status dashboards
  • (active) supplier summary (in the Axya platform, only active suppliers are pulled in during integration)
  • team (member) summary
  • basic performance/execution-based analytics across RFQs, orders, and suppliers

On the supplier side, they have three solutions:

  • supplier portal
  • email, Excel, and PDF
  • weekly recaps

Supplier Portal

Like most sourcing platforms, Axya has a modern supplier interface where they can log in and see their RFQs, Purchase Orders, and communications and can manually respond to each of them through the platform. However …

Email, Excel, and PDF

Unlike most sourcing platforms, Axya was built to support traditional manufacturers who are engineering geniuses but technological novices when it comes to modern SaaS platforms and who like to work in Email, Excel, and PDF — making it one of a select few platforms that doesn’t require a supplier to ever access the portal.

All RFQs, Purchase Orders, and Messages are sent to the supplier through e-mail, with attachments they can download, fill out, and send back for RFQs and Purchase Orders (and they can simply respond to the email for messaging). Since the Axya platform directly integrates with Microsoft Outlook in addition to directly integrating with the ERP, it can track, monitor, and replicate all communications that flow through email in the Axya platform as long as they contain the RFQ id, order id, or communication id.

The platform will also automatically import and process any Excel or PDF attachment, and if it is a bid file, extract the bids; an order acknowledgement, capture it; a shipment, note it; a response, associate it with the question. This is one of the most unique, and powerful features of Axya — allowing sellers (and buyers) to work in their familiar, preferred environments.

On the buyer’s side, they can access the Axya panel inside Outlook at any time and associate any communication from a supplier with an active RFQ, order, (survey) form, or question (from a chat) as needed. Moreover, a buyer can also handle the majority of communications with a supplier who prefers to use email, Excel, and PDF through email, with limited need to log into the portal once the RFQ, order, etc. has been issued (until it is complete and time to make an award or complete an order).

Weekly Recaps

The system automatically creates a weekly recap for all suppliers with open orders, survey form requests, RFQs, or questions (not responded to); that summarizes all of them with direct single-click links that will take the supplier to the appropriate RFQ, order, survey, or question; and once in the RFQ, order, survey, or question they can submit a quote, submit an acknowledgement or update, answer the survey quickly and easily.

Implementation and Integration

Axya takes a staged approach to implementation, starting with one buying team and their active suppliers to quickly get the client up and running, verify the implementation and integration, and give them time to help the client identify the buying teams, suppliers, products, and profile requirements that the client needs which they will work on for phase 2, which will quickly be implemented once phase 1 is complete. The timeframe is client dependent, but depending on the ERP and complexity of the integration requirements, initial implementation is doable in a few weeks, and phase 2 can be completed in a few months.

Conclusion

Axya is a very powerful direct sourcing, procurement, and supplier management solution …

that is almost a complete solution for direct / custom manufacturers, with only a few small pieces needed. The first is DIY (do-it-yourself) form capability, because right now Axya has to create all the supplier surveys a buyer wants to send to the supplier (which will soon become burdensome on Axya if not addressed), and the second is invoice acceptance, 3-way matching, and ok-to-pay.

Axya has realized both of these, and has already started building a DIY form builder for supplier surveys and information gathering, which will be released later this year, and just started researching advanced technology for invoice processing, as direct invoices are significantly more difficult to parse as indirect (due to the need for very precise low-level part mappings), as they recognize the need for invoice processing and 3-way match.

And while there is more that could be done, there is little the average mid-sized direct/custom manufacturer will need, at least not for a few years while they progress up the Source-to-Pay maturity curve. As a result, Axya is a great solution for a MM custom manufacturer struggling in the modern digital world due to lack of modern Procurement support in the ERP.

How Do You Turbo-Charge Negotiations?

Not that long ago, THE REVELATOR asked some questions around negotiations and how you could turbo-charge them for a better outcome. Of course, the doctor answered because this is becoming an even more important topic given the state of world, and technology, affairs, but its also one that needs a repeat discussion because this topic comes up a lot and the doctor fears that everyone is missing at least one key point.

What does it mean to “turbocharge” negotiations?

How about “what should it mean”. Everyone has their own answer for “what does it mean”, and most aren’t that useful.

Turbocharge should mean to back up with facts (based on organizational data) and market data relevant to every aspect of the negotiation, to go in knowing both what value there is in it for you as well as your BATNA, and the value that it is in for your counterpart, and a best guess at their BATNA.

Without all this insight, you don’t know if you even have a leg to stand on, or how to reach common ground to carry the negotiation forward. Data insight goes much, much, further than a carrot or a stick ever will.

What do you define as being a successful negotiation outcome?

A successful negotiation outcome is a win-win. It’s not a zero-sum win-lose game like a certain world famous infamous author thinks it is … unless, or course, both parties have the exact same collection of goals which they would rank and weight the exact same way, which is astronomically rare. Thus, since the vast majority of the time both parties have their own unique definition of winning, which can have some overlap, both parties can win.

What are your thoughts about AI and the negotiation process?

When it comes to AI and Negotiation, the answer is no, No, NO, 𝐍𝐎, π“π“ž! Since it’s not true artificial intelligence, you should never, ever, ever let it negotiate as that is letting the system make a decision, vs recommending a decision, which even IBM told all its employees 46 years ago that this is something you should NEVER, EVER do!

To what degree do experience and expertise impact negotiations?

Experience and Expertise both help, but reality is that the results depend more on the differential between the two parties at the table than any scale you might come up with to measure your own. So you want both, but you should always expect to be outmatched, which is why data, facts, and insight are so critical. If you can find that common ground and give up at least some of what the other party truly wants, you have a much better chance of getting something you want and coming out okay.

Bonus Questions

“Are women better at negotiation than men?”

That would, of course, depend on your definition of negotiation and success. I’m inclined to say yes, but if your definition of success is to be a complete a-hole pre, during, and post, well, I’ve seen way more men who excel at that.

“Is AI better at bluffing than humans?”

Regular humans, or sociopaths? Since AI has no feelings, and doesn’t understand truth from lies, depending on how you define bluffing, it can be absolutely great at it … or not.

“Is AI β€œGenderless”

Not the right question. We know tech is genderless.

The right question is the following: Is AI trained genderless? Usually not as its usually trained on results that were predominantly created and input by men (who make up 75% of STEM). So it’s not genderless and, sometimes, it is very, very biased.

FINAL QUESTION

Is it the technology or how you use it?

It is most definitely how you use the technology, not the technology itself. Heck, you can get good results with a carrot if you are in negotiations with a bunny. πŸ˜‰

And that technology must be used to get you the data and insights you need to have a good human to human negotiation. No more, no less. Because, at the end of the day, that’s the only way you can turbocharge a negotiation for success!

Think you can’t afford modern S2P as a SME? Think Again and Auxionize!

Auxionize is a very interesting new source-to-pay marketplace, with optional managed services, for the SME and MM indirect and off-the-shelf direct sourcing/procurement organization that gives buyers the 80% of what they need in a Source-to-Pay platform at a fraction of the cost of a larger mid-market/suite offering. (Small organizations (up to 5 buyers, only a few auctions a month) that might think they can’t afford a modern sourcing tool can start with an ultra-basic plan that starts at 600 Euro a year and MM organizations can get a decent sized solutions with the core modules starting at 2,500 Euro a year (and an all inclusive unlimited use solution for 1,000 Euro to 2,000 Euro a month, fitting it on their P-card). (And for twice that, they can get a fair bit of managed services to augment their team and significantly increase their sourcing throughput. And if they are a MM with a 8K to 10K monthly budget, full platform with more-or-less unlimited use and unlimited services for an average mid-sized organization’s needs.)

Auxionize, which is based in Sofia, Bulgaria where it was founded over a decade ago and where it launched its modern S2P-powered marketplace about 5 years ago, takes advantage of being a low-cost locale with a relatively high level of education, as it is in the EU, and its costs are half that of most major US or EU locales. Moreover, since its platform is designed for high efficiency throughput, it can keep its service costs low and service levels high and provide SMEs and MMs what they need (and the majority of what they want) at a price point they can afford. (Moreover, their sales organization is now US-led, so North American companies can work on their timezone.)

In order to discuss Auxionize, we have to unpack that first sentence. When we do, we see it has four primary offerings:

  • product catalogue (that powers the)
  • marketplace
  • source-to-pay
  • managed services

Product Catalogue

The Auxionize platform is built on a detailed product catalogue that provides very detailed descriptions for standard products and parts (which is why it’s also a good direct sourcing platform for off-the-shelf manufacturing as you can specify complete part details that are precise enough for standard manufacturing). They have a very detailed taxonomy that is built on top of the Product Information Management (PIM) of icecat that they use to organize standard products defined in the icecat PIM as well as custom products defined by buyers on the platform (which can be public or private, and will be public if supplier defined and may be public if buyer defined). For every product, you can define its features, materials, weight and dimensions, and other standard information specific to its category. Even for a screw their default profile is material, thread type, head shape, length, manufacturing standard, surface finish, diameter, grading, etc. For stationary, they will capture the weight, thickness, opacity, strength, brightness, tear resistance, tone, finish, etc. will all be captured — as will the expected packaging (size). And so on. (And if they don’t have a template, you can copy the closest one and add what you need to specify your product or part — and, as a result, can specify any part you need for indirect or off-the-shelf direct sourcing and procurement.)

The catalogue currently has over 250,000 parts, so if what you want is a standard part or product, it’s probably already in the system and very quick for you to get going on a sourcing event.

Marketplace

Auxionize started out as a marketplace before it realized that a marketplace wasn’t the right solution for sourcing and strategic procurement, but realizes it is still a valuable solution for companies just needing to do spot buys or identify suppliers to invite to a sourcing event. As a result, it’s a traditional marketplace that is free for sellers and free for buyers to search, but they need to be a (paying) customer to run an event (and make a purchase, which can be a sole-source RFX for a spot-buy).

All a supplier rep has to do is sign up, create a company profile, wait for it to be verified (in the appropriate commercial register), and then create their catalog (which can be uploaded from csv files that use the template format that can be downloaded). If the suppliers need help, Auxionize has premium plans and pay-as-you-go managed services. Their products are then in a public marketplace that all buyers can search. (And, to be clear, a company can be both a buyer and a supplier on the platform, although most sellers are not yet buyers [as with any marketplace].)

Source to Pay

The platform supports standard e-Auctions and RFX (that they call pre-auction) for sourcing, award generation (which can be used to automatically generate the meta-data for the contract once it is uploaded into the system — note that the Auxionize platform does not support negotiation, and only provides a contract repository where you can associate orders, attach related documents, find associated orders and their associated invoices], and manage alerts and notifications around milestones, renewals and expiry), order creation and management, and invoice acceptance and management (as the system ends at ok-to-pay). It also provides suppliers with a portal where they can access the sourcing events they are invited to, see their orders, and upload their invoices over a secure channel.

(Pre) Auction

The core of the platform is the (pre) auction platform that the buyer uses to set up a sourcing event and that walks the users through the seven necessary steps (and doesn’t let the user publish the RFX [pre-auction] or auction until it is complete and issue free. But before we can discuss the seven step setup process, we need to discuss IPS — Integrated Product Specification.

Integrated Product Specification

Sourcing events in the Auxionize system are for complete product specifications, which consists of a (marketplace) product catalog item the buyer wants to obtain along with all of the additional specifications necessary to source that item. This will include a buyer product specification — which wraps the standard catalog item as a buyer item with internal identifiers, documents, drawings, specifications for environmental or regulatory compliance, and any additional non-standard specification — and the purchasing specifications (quantity required, unit, minimum order quantity, warranty requirements, currency, delivery location, payment terms, etc.) as well as (internal) purchasing strategy information. At this point, general terms and conditions, drawings and specifications, and general notes can also be associated with the item.

Auction Setup

Once the buyer has created one or more internal product specifications, the buyer can create a (pre)-auction following the seven step formula built-in to the Auxionize platform:

  1. Users: define the users who will have (read) only access to the sourcing event (once published)
  2. IPS: select the items, defined by IPS, that will be sourced; they can be grouped together (into sheets) if desired
  3. Type: RFX (Pre-Auction) or (Reverse) Auction
  4. Rules: the auction configuration / settings including, but not limited to, access (open, controlled, closed); award rules (product, group, all); visibility (sellers, products, prices); extension period and max offers in that period; etc.
  5. Access Control: which suppliers, and which of their representatives, have access
  6. Documents: upload any (additional) documents required to specify the sourcing event, terms and conditions, etc.
  7. Notes: add any final notes and instructions for the sellers

Once each step has been completed, with minimal, acceptable, definitions, then the event can be published and sellers can start bidding. Once the ending time, with any extensions, has been reached, the buyer can see the bids (side by side) as well as the (default) awards as per the award rules they defined in the setup (but which are hidden from the sellers). They can accept the default allocations and generate an award (which can be output for contract negotiations and which can be used to auto-index a contract, once signed and uploaded, with meta-data once it is associated with a previous sourcing event).

Note that once the auction is live, the sellers have access to a public forum to ask questions and get answers, as well as a private channel to send and receive private messages.

Order and Invoice Management

Once a sourcing event has been completed, the buyer can create one or more orders against it and send the order to the selected seller(s) — and continue to do so over time. The order is pushed into the supplier portal and sent to the supplier in an email. Once the seller has shipped the order, they can upload the inovice to the buyer direct to the system (and if they have the original order email, they can click the provided link to go right to the upload screen). (Unlike some competitors, they don’t allow email submissions because they detected multiple man-in-the-middle attacks in the past.)

If desired, Auxionize can be integrated with the ERP (in a custom project) and push orders direct to the ERP.

Odds and Ends

Supplier profiles right now are limited to basic company profiles, and if the supplier a buyer wants isn’t in the system, they can invite the supplier with a simple email.

In the next version, if the buyer negotiates a contract for something that wasn’t sourced through the system, the platform will use AI to automatically extract all identifiable metadata it has confidence in, negating the need for the buyer to manually enter all of the metadata (and instead just override any metadata that wasn’t identified to the buyer’s liking). In the current version, if the contract isn’t associated with a sourcing event, the buyer has to enter all of the metadata manually to store the contract.

The platform also computes the projected savings from each award based on the current average market price and tracks the contribution from each project, buyer, and department over time.

Once a buyer has done business with a seller, the buyer can leave a simple rating on a 5-star scale that contributes to a public supplier average that can help all buyers select trustworthy, reliable sellers in the marketplace.

Managed Services

Finally, Auxionize offers managed services that will help the buyer create their ISPs, create and run their auctions, negotiate their contracts, upload and index them, create the orders, and see whether or not a supplier has accessed the order or responded. These services start as low as 1,000 Euro a month for a buyer that runs 5 auctions or less, on a limited number of ISPs, in the EU timezone. Most smaller mid sized clients can get all the managed services they need for about 5K Euro a month (as most still only run a handful of events for a small team of users), or the cost of 1 FTE.

All-in-all, Auxionize is a fairly extensive mid-market offering at a great price point for small and smaller mid-sized organizations that might think a modern, foundational, source-to-pay platform is out of their grasp (and services a pipe-dream).

How Many Zumens to Manufacture a Light Bulb? Just One!

Zumen, billing itself as the most comprehensive Source-to-Pay software for product manufacturing companies, purports to be the connect between the Part Life Cycle, Product Life Cycle and the Procurement Life Cycle and offer you one platform to manage your entire Source-to-Pay Process through their Direct Material Life Cycle Management platform.

So how does it stack up?

Well, let’s start with the basics. The Zumen platform offers core functionality in five areas:

New Product Development

To support new product development, they have modules centered around:

  • product, part and material data
  • product & infrastructure planning

The core of any direct sourcing platform is its pats management capability, and the Zumen platform can track all of your parts, all of their versions, all of their associated programs, all associated product and costing plans, all associated sourcing events, all awards, all procurements, and all associated drawings and documents. With respect to part data, you can not only track every related code and cost, but all associated materials. With respect to materials, you can also track estimates, supplier, and market commodity price data as well as associated scrap rates and scrap value. When it comes to building cost models for parts, which can include tooling costs, the platform also allows processes to be tracked in the norms master (with associated machines, norms, and units).

The platform goes beyond just tracking parts, but also tracks inventory, blocks (internal commitments), commitments (from awards/contracts), and production schedules around the parts.

In the Zumen platform, product development is governed by a program that tracks production sourcing, supplier management, strategic sourcing, and procurement. The platform supports the definition of full programs at the final good level, even if that is an automobile or piece of construction equipment with 10,000 parts, assembly level, or part level. Like any good product management platform, it supports versioning and a full history. Programs can be imported from the ERP or engineering systems (like Windchill) or created in the platform from scratch. BOMs are placed inside a product hierarchy of product sectors, product lines, model families, models, and/or other programs, as appropriate. The bill of materials will support as many levels as desired.

Bill of materials are very extensive and go beyond just basic specifications, but will also track all costs and commitments at each phase of the bill of material lifecycle based on the associated program. This can include estimated and actual costs during initial product planing, production sourcing (during initial development), strategic sourcing (for mass production), the current procurement cycle (if the costs are tagged to indices), alternate part costs if there are alternate parts defined, and (alternate) quotations if there are associated quotations from suppliers.

Moreover, from the currently active programs, the platform can automatically extract the current material requirements plan to get a complete overview of the material requirements at the base level across all of the bill of materials, including the current delivery dates, which can be amalgamated and modified in the material requirements plan.

Sourcing

  • product costing and approvals
  • request for purchase
  • RFQ
  • budgeting & spend management

Cost estimates can be as high level or as detailed as the user desires. They can be high level models that simply break down the cost into material costs, production costs, delivery costs, and tariffs, or detailed models that break out the cost associated with each material, production processing step, service, transport leg, and delivery/trade charge. This can include tooling cost breakdowns, assumed minimum order quantities (for economies of scale), packaging, internal rate on credit, and other related costs.

Once a cost plan is complete, often after one or more suppliers have returned a quotation in a (production) sourcing event, a product cost approval can be created for formal costing approval.

At any time, a user of the platform can request a part or program for purchase for production sourcing or full (strategic) sourcing, and it will kick of an RFQ. The request will be pre-populated with all of the part data, and all the user has to do is define the volume required (which could be as low as a single unit during R&D or initial production sourcing or as high as a few million units during strategic sourcing for mass production of the product over the next few years). For production sourcing, the annual volumes are automatcally derived based on the program definition or the annual operating plan. The RFQ will be instantiated from a template that can be linked to the appropriate program classification, and the documents associated with the relevant commodities will be pulled in automatically as well when the RFQ is constructed. The RFQ can be limited to a single supplier, all suppliers who can supply the part, or a chosen set of suppliers. All associated documents, compliance requirements, NDAs, delivery terms and conditions, etc. that have been configured in the platform will automatically be included, as will the default manufacturing locations for delivery and product encodings.

During a production sourcing event, the buyer can also include details on the program, estimated annual volumes, estimated delivery schedules, current (buyer) (program) cost estimates, any associated (child) part details of relevance, and other relevant data. With proper platform configuration, all of this can be automatically included. When a buyer creates a sourcing event, they can access the entire part history for reference. They can also associate (internal) sourcing criteria with an RFQ, and when a quotation is returned, evaluate each quotation, and see the sourcing evaluations and score side-by-side with the quotations. (They can also see which documents have been returned and access any documents they need to for quotation and criteria evaluation). Note that the quotations have full drill-down capability even in side-by-side mode, allowing you to drill down to components of interest and roll back up for high level (assembly) overviews.

When an RFQ is returned, be it for production sourcing or full strategic (multi-year) sourcing, you can see the full quotation from each supplier, and compare them side by side, as well as comparing them to estimates.

These quotations can be used to create budget items, populate budgets, and update budget cycles (as budgets can be over multiple periods and associated with multi-year production plans). Budgets in the system can be at the part or program level, and, like purchase requests and quotations, be approved before finalized.

Procurement

  • purchase orders
  • accounts payable

Once the quotations have been returned and an approval has been completed, the buyer can create the relevant purchase orders to begin the sourcing process. These will then be sent to the suppliers for acceptance and/or requests for modification (if they want/need to split shipments), and once the suppliers accept the purchase order, they can send advance shipping notifications (ASN) when they are ready to ship.

Once the parts have been shipped, the suppliers can flip the purchase order into an invoice and send it back to the buyer, who will then receive it in the accounts payable module for processing.

Analytics and (Production) Monitoring

The platform contains a number of built-in dashboards for monitoring parts, programs, RFQs, production plans, cost estimates, budgets, inventory, and other platform capabilities. One of the main dashboards is the production dashboard that allows you to track total production over time from global production down to an individual part through drill-downs.

The platform also has some basic spend (analysis) dashboards for total spend and program/product cost analysis which, like the other dashboards, can summarize spend at the highest level across a time period of interest and allow drill down to a single part for a single date, and everything in between. The dashboard can also allow a buyer to drill into changes in product cost breakdowns over time. There is a similar dashboard for direct material spend, which can be global, program level, plant level, across all materials, a category, or a single material. And, of course, a dashboard that lets you drill into spend by supplier.

There are also a number of built in analyses around product costs which include, but are not limited to, landed cost analysis, import cost analysis, currency trend analysis, spend by plant, share of business analysis, and overall product cost analysis.

Supplier Management

Supplier Management is centred around supplier onboarding, information, quality (PPAP/APQP), and performance management. You can onboard a supplier using a customized workflow that collects the corporate, capability, and compliance information that you need to work with a supplier.

The Big Q

The real question is, does the platform fulfill its promise?

Let’s consider a minimal product development, sourcing, and procurement cycle.

  • Design
  • Development Sourcing
  • Design Finalization
  • Sales Projection
  • Demand Planning
  • Production Planning
  • Production Sourcing
  • Procurement & Fulfillment
  • Demand and Production Updates
  • Part Replacements and Supply Base Modifications
  • Service and Support

Through its new product development support, Zumen allows you to maintain product and part designs, including all historical versions, manage bill of materials in programs (and sub-programs), and ensure your sourcing initiatives are tied to design. With its RFQ support, deep cost models, and quotation comparison capability, development (and production) sourcing is well supported. You can import the projections from your ERP and do period based (month-over-month, etc.) demand planning and break that down into projection plans, which can be used to enhance production sourcing by providing potential suppliers with the demand breakdown over time. Once the awards have been made, they are tracked and purchase orders can be automatically or manually kicked off as needed. ASNs can be automatically received and tracked during fulfillment, demands and production plans can be tweaked at any time, part replacements tracked and associated with original parts, and associated services tied to the product/part awards.

Thus, Zumen really does manage the core part life cycle, product lifecycle, and procurement lifecycle in an end-to-end Direct Source-to-Pay platform and limits the number of additional best of breed platforms you will need to support your Source-to-Pay+ and supply chain management activities beyond the ERP/MRP and PLM. Key weaknesses are no scope 3 carbon tracking, which should be done at the part level to not only fully support EU requirements but allow for precise calculations, which is best done in the Source-to-Pay platform (and not a third party system) and supplier risk assessments (critical during qualification, and typically doesn’t live in a supplier discovery platform). While risk data should come from other platforms, the risk analysis should live in the supplier management platform to allow for not only performance tracking, but risk and compliance tracking. However, neither of these capabilities would be that difficult to build on the foundations they already have in place, so our bet would be that core capabilities for risk and carbon management will be added in over the next 12 to 24 months.

And, of course, if you are on the market for a new direct source-to-pay platform for product-development and direct product(ion) sourcing, Zumen is an option that you should add to your shortlist, especially in heavy machinery and manufactured parts industries (where the founder and his team have decades of experience).