Category Archives: Supply Chain

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.

SourceMap: Striving to Bring Supply Chain Visibility to the Masses

SourceMap is a supply chain mapping tool that is designed to help an organization map out their end-to-end supply chain to help them gain critical insight and understanding into their performance, costs, sustainability, and risk. Especially risk. Most companies don’t understand the risks hidden in their supply chain — the sole-source parts, the over-dependence on high-risk geographic areas, or the ability of a single port strike to knock out multiple shipping lanes. (Nor do most companies understand the cost of risk, which is discussed in detail in Sourcing Innovation’s upcoming white-paper on Playing With Fire, but that’s a discussion for another post.)

SourceMap, born as a research project at the MIT Media Lab to publish and measure the environmental footprint of all the products on earth, was launched as a public platform for supply chain mapping in 2009 that allowed individuals to see every aspect of a product’s life — the good and the bad. Then, in 2011 it partnered with the MIT Centre for Transportation and Logistics to pursue opportunities in automating supply chain visualization and risk management. Shortly after, the 2011 Tohuku tsunami hit and wiped out over 45,000 buildings, damaged over 144,000 more, shut down all of Japan’s ports (including 15 that were located in the disaster zone). All told, it did over $300 Billion in damages and sent shockwaves throughout global supply chains. Companies were scrambling to understand the impact on their supply chains, SourceMap was approached, an incorporation followed, and the private sector solution was born.

Hands-down, SourceMap is the best visualization of the supply chain to hit the scene since Resilinc, which is, in Sourcing Innovation’s view, is still the leader in Supply Chain Risk Management solutions, but if all an organization needs is visibility and Supply Chain Visualization, SourceMap is now a leading contender in that arena. SourceMap has the ability to use an organization’s ERP data, public data sources, and survey data from the organization’s suppliers, the suppliers’ suppliers, down to the raw material suppliers, to create a complete point-to-point map of the supply chain that an organization can use to trace it’s products from source-to-sink on a (Google Earth) Map and visually see what is happening. This is a very powerful feature that allows an organization to gain insights into their supply chain that they never knew before. And just like an organization is typically shocked the first time they run a spend analysis (we spend that much with who?!?), they are typically just as shocked when they run a map and see that a number of distributors and tier 1 suppliers are using, or outsourcing a significant portion of, spend to the same tier 2 supplier and just pushing the single-source point of failure an organization is trying to avoid one step further down into the Supply Chain.

And the SourceMap solution, which only needs common location data points, can quickly import and combine all data sources an organization can get its hands on and SourceOne can often create a starting supply chain map for an organization in less than an hour. It’s not complete or perfect, but it allows the organization to quickly drill into the supply chain and see where the data, and focus, is needed.

SourceMap is quickly becoming the new supply chain visibility solution to watch, and for a real in-depth analysis, Sourcing Innovation would recommend the in-depth write-up that the doctor and the prophet collaborated on over on Spend Matters Pro (membership required) that provides four pages of deep insight into the solution.

Two Hundred Years Ago Today …

… saw the first successful test of a Davy Lamp, a safety lamp for use in flammable atmospheres that consists of a wick lamp with the flame enclosed inside a mesh screen that acts as a flame arrestor. The idea is that air (and firedamp) can pass through the mesh freely enough to support combustion, but the holes are too fine to allow a flame to propagate through them and ignite any firedamp (like methane) outside of the lamp.

While this lamp, designed to decrease accidents by preventing explosions that would maim or kill miners when there was an abundance of methane or other combustible gasses, actually increased mine accidents (as miners believed it was now safe to work in parts of the mine that had previously been closed for safety reasons), successors did eventually increase mine safety and allow mines to be worked more safely (when the lamps, such as the Protector Garforth GR6S flame safety lamp, are properly used).

When the lamp was first released, miners believed they could work in sections of the mine that had unsafe levels of methane because the lamp would not ignite the methane. This was true only insofar as the lamp was not damaged, but, in the original design, the bare gauze was easily damaged and the lamp became unsafe as soon as a single wire broke or rusted. Plus, because the mine owners thought the safety lamps were enough, they did not install proper ventilation to keep methane levels down (which would have prevented methane explosions from slightly damaged lamps).

But, eventually, legal requirements for legal air quality and safety lamp improvements made mining safe, and the raw materials we all depend upon to create our products became easier to mine and supply became more predictable. While the Davy Lamp may have been a bump in the road, it was an important invention on the road to modern mining.