Category Archives: Vendor Review

MCA Solutions – A Strategic Service Parts Management Platform

MCA Solutions (acquired by Marlin Equity Partners, merged with Servigistics, acquired by PTC) a Philadelphia, PA company, is not only one of the few companies I know of that has an advanced strategic service parts management solution, but one of the very few that only does service parts management. Recognizing that many large manufacturing, semiconductor, high-tech, aerospace and defense companies often have tens of millions, if not hundreds of millions, of dollars tied up in inventory, and that an inventory planning and optimization solution that is off even by a few percentage points can cost these companies millions, if not tens of millions, of dollars annually, the founder of MCA Solutions, Dr. Morris Cohen, who has worked with IBM, Cisco, Applied Materials, Intel, GM, Saturn, Teradyne, and the U.S. Navy, decided to focus the company on this problem alone.

Why? Because the problem is a lot harder than you think. Just like a product has a life-cycle, so does a service part. Not only do you have to accurately forecast how many replacement parts you’re going to need in your network (as well as where they need to be), you have to manage the return, repair, and re-introduction of the repaired part into your inventory. (Remember, many parts are sub-assemblies because it can be too time consuming to replace an individual part — so it needs to be repaired once it is replaced; just like your IT department doesn’t throw out the desktop they just replaced when only the hard-drive needs to be replaced.)

To accurately solve the problem, MCA Solutions allows you to model your entire multi-echelon parts demand network. What does this mean? You can model all of your primary (warehouse) locations, forward locations, forward-forward locations, etc. to as many levels as you need; you can define all of the production lines, aircraft, or other equipment at each location; define the required replacement parts and desired availability and / or target stock levels for each part; define any and all (performance-based) contractual commitments if you are in the business of servicing lines, aircraft, or other commitments for your customer; define historical demand, service requirements, or maintenance plans; and specify the best type of statistical model for the part in question (poisson, normal, or negative binomial – as low volume, high-volume, and sporadic demand parts need to be modeled differently), as well as any location or usage-specific criteria that influences demand.

Furthermore, MCA Solutions’ platform not only allows you to strategically plan cost-optimal inventory levels for target stock and availability levels, but also takes into account current network stock levels and will give you an executable tactical implementation plan which will tell you what needs to be shifted between locations, what needs to be ordered – and when, and which parts should be repaired (and when) and which parts should be retired. In other words, not only does their solution understand product life-cycles, but it also allows understands the entire part life-cycle.

How well does it work? For their target industries, very well. It was chosen by the Navy, who spent almost a year exhaustively evaluating COTS (Commercial Off The Shelf) solutions against their own in-house solution, it’s used by KLA-Tencor and Cisco — who have some of the most extensive parts supply chains in the IT world, and their solution has been chosen by SAP as their preferred parts planning solution. Furthermore, it’s very well designed. You can work at the aggregate network, network (as it allows you to define different part networks if you have to meet different geographies, different environmental regulations, or just want to separate your internal service networks from those of your customers), forward location, location, equipment / contract, or part level, depending on your need; you can compare the current plan to various “what-if” plans that let you see how your altered stock levels / availability levels affect cost or how shifting forward locations (central warehouses) changes stock levels and affected costs; and you can do extensive reporting, graphing, and, if required, data export to Excel (and Power Point). Plus, you can export orders to your external procurement / ERP / MRP systems and import supplier response data. If the lead-times in the responses differ from what the plan expects, the system will automatically update and re-balance the plan.

If you’re in one of their target industries, it’s certainly worth an investigation. Not only is it designed well, but it appears to be very efficient. The average response time for an update even in a fairly sophisticated what-if network model (with hundreds of locations and thousands of parts) is under two seconds. That’s impressive where optimization is involved given the complexity of a multi-echelon network model.

SourceOne scores a Grand Slam with WhyAbe

Gartner recently named Source One’s (acquired by Corcentric) free WhyAbe.com (sunset) platform as a Cool Vendor in Procurement and Finance for 2008. This is a big score for the sourcing and contract management toolset, when you consider that not many sourcing providers get this recognition from Gartner and that previous winners have included FreeFlow, Vinimaya (rebranded Aquiire, acquired by Coupa), and BIQ (acquired by Opera Solutions, rebranded ElectrifAI) – the latter of which are really cool vendors.

Source One, a Procurement Service Provider (PSP), is a fairly major player in the strategic sourcing & cost reduction consulting marketplace, having been incorporated back in 1993 – well before companies like FreeMarkets (now part of Ariba) made strategic sourcing vogue, and many of their consultants have over 20 years of experience in the field. They take the traditional approach to sourcing projects with a two part project team (consisting of Source One personnel who do the project and Client personnel who sponsor and manage the project on the client site), as compared to the resource augmentation approach some of the newer consultancies take. The approach may seem heavy to a smaller organization, but the results speak for themselves. With an average savings of 18% across 60+ categories (whose average savings range from 5% to 25%, while some outliers, like cash management, are as high as 90%), when they say their aggregated purchasing power allows them to secure exceptionally competitive pricing, they mean it. And from what I hear, they’re doing so well that it’s a daily struggle to keep up with a constantly increasing demand for their services. (P.S. They’ll be making a big announcement at ISM next month. You might want to watch for it.)

But let’s talk about WhyAbe.com. From a technology perspective, RFX, Reverse Auction, and basic Contract Management is nothing new … basic solutions for the former has been available for over ten years and a basic solution for the latter for at least seven years. There’s nothing new about cookie-cutter on-line stores or stripped down supplier networks either. What is new is the fact that it’s totally free.  WhyAbe.com is cracking the sourcing mold and offering a free solution that companies new to sourcing and sourcing technology can use and experiment to find out what works for them, what doesn’t, and what they need help on. It’s a great way for a company to test the water as it provides a quick start to e-Sourcing with a price that can’t be beat. Then, when an organization has identified it’s needs, and, more importantly, identified what it can do well in house – and what it can not, it can always upgrade to a more extensive e-Sourcing platform and retain a PSP, like Source One, to help it with those categories that it doesn’t have the experience, or the leverage, to get savings on. Furthermore, should it retain Source One, it can still use the tool as a way to work with the PSP. In other words, even though there’s nothing new from a technology perspective, the model is very cool and I think they deserve the Cool Vendor award for it. If nothing else, it will force some of the stagnant providers in the e-Sourcing space that haven’t done much with their solution for 2, 3, 5, and in some cases, 7 years to update their offering to provide real value for the $$s they’re charging, or fall by the wayside to make room for the new innovators. And that’s a win for the space you can’t argue with!

Exploring EcoVadis

Last month, Jason Busch gave the sourcing world an introduction to EcoVadis in his two part series (Part I and Part II) over on Spend Matters.

In his posts, he noted that EcoVadis was a European (and, in particular, a French) provider of a sustainability solution for evaluating and monitoring suppliers whose primary focus is helping European companies meet emerging green and sustainability regulatory requirements. According to Jason, not only does EcoVadis monitor environmental and operational practices, but they also consider labor practices & human rights, fair business practices, customer and product responsibility, and sustainable procurement. This is important because, in the EU, there are country-specific laws that require green and sustainability efforts.

Jason also notes that not only does EcoVadis provide capability with respect to supplier assessments, supplier audits, and corrective action procedures, but that they are also compliant with GRI G3 standards and the pending ISO 26000 certification with respect to the 150 procurement categories they are currently supporting across 23 green/sustainable criteria (and the 1200 plus pre-defined questions at a user’s disposal).

In this post, I’m supposed to be tackling the technology underpinnings of the solution, but the fact of the matter is that the technology underlying the platform is quite basic – which it should be when you consider the goal. The goal is to give a procurement buyer a quick overview of the sustainability status of a supplier on a single screen while also giving the buyer the ability to drill down deep into the rating and understand where the supplier is strong and where they are weak from a sustainability perspective.

All you need is a “dashboard” that shows a snapshot rating of a supplier on each of the key categories with the ability to drill down (which is key, because, otherwise, a “dashboard” is useless) into scorecards for each rating to find out why the score was high, low, or zero and linkages to relevant audits, alerts, and reports that led to the scores. In addition to this, EcoVadis offers a 360-degree watch that aggregates human-reviewed news articles relevant to the suppliers and their sustainability ratings, benchmarks against other suppliers in the industry on the relevant sustainability categories, and highlight summaries of each supplier. With regards to the solution they are trying to offer, the only critical component missing is an administrative interface where the head of CSR can add additional questions specific to the company and category in question (as some companies will want to go above and beyond the regulations and others will have special needs). The solution, which is multi-linqual, has the ability to add specific questions by category and customer – they just haven’t coded a web-accessible user interface yet (as most of their early customers have been more than content with the extensive question sets built into the product).

The big advantage of a standard web-based solution such as Ecovadis is the fact that suppliers only have to answer a question once and the result of an audit can be shared across multiple clients. One of the biggest downsides to wide-spread sustainability initiatives is the severe burden they place on a supplier. Think about it – not only is it resource constraining for a supplier to answer essentially the same questionnaire from each of its customers, and undergo multiple audits on the same indicators (when one surprise audit every couple of quarters should be more than enough), but it is resource crippling to have to answer the same set of questions for every potential customer, knowing that you’re only going to win a percentage of the RFPs you answer. A supplier should be able to answer the questions once, go through the (surprise) audit once, and then not worry about it for at least a couple of quarters.

IQ-based Navigation of Contingent Labour Sourcing

One of the subjects that is important to discuss from time to time on a sourcing blog is the subject of services sourcing. I’ve discussed the subject of Strategic Service Management a few times on this blog, along with the service management capabilities of Servigistics and Provade, but I’ve never dived into the subject of contingent labor force sourcing.

Although it may not be as universally applicable as the sourcing of marketing, print, and legal services, which every company needs, if you’re a call center, drop shipper, retailer, or seasonal manufacturer, for example, contingent labor services can be a very significant part of your budget. Furthermore, if left unchecked, these costs can not only soar out of control, but lead to significant losses through uncaught over-billing (and by the time you caught them in a properly executed spend-analysis project, it could be too late to get a refund if you’ve switched vendors).

That’s why, if you fall into one these categories, you really should have a good labor sourcing and management solution. One such solution that I would consider is the one offered by IQ Navigator.  I recently had a chance to walk through and discuss their SaaS-based services management solution in length, and while, like a few other offerings, it is flexible enough to handle multiple services category, it is particularly well suited to contingent labour force sourcing and management.

Contingent labor is a complex category. Sometimes you’re hiring by the hour, sometimes by the day, and sometimes by the week. Sometimes you’re hiring one person for a job, sometimes twenty. Each position has a different job description, and different requirements. And, each HR person usually has hundreds of jobs across dozens of positions across multiple locations to fill simultaneously in your typical multi-national. Furthermore, multiple documentation requirements, including resumes, need to be maintained for each potential resource.

IQ Navigator’s solution not only allows each job requisition to be customized by type, requirements, and process flow, but it supports the entire process from job definition, advertisement distribution to staffing agencies, resource resume review, resource selection, time and rate approval, project tracking, billing, matching against approved rates, and alerts if a resource comes close to their approved hours. It also supports job type templates, project and process templates, and calendar based definition of resource requirements. This last capability is well thought out and rather unique – it allows a supervisor to load up a single monthly-calendar based screen, and, for each job, specify how many resources are needed for each shift in that month. All the supervisor has to do is enter numbers – and the system enables the HR manager to take care of the rest – automating the distribution of the advertisement to staffing agencies, the collection of resumes, and the matching of experience and certifications against job requirements.

IQ Navigator’s product is also quite configurable. It supports the definition of projects with multiple statements of work (SOW), where each SOW has multiple deliverables, and every SOW can have different terms and rates, tied to a contract, which can be incorporated as a key field or as an attachment. It also allows mass approvals, which can be done by e-mail or mobile device by a busy manager in the field.

And it works. IQ Navigator has over 50 clients, including a couple dozen Global Fortune 500s, processes over 50,000 thousand contractors weekly, from over 4,700 staffing agencies in over 15 countries which represent over 3 Billion in spend under contract annually. Furthermore, over one quarter of spending by its global multi-national clients is outside of the US.

Is This The Year Austin Tetra Breaks Out?

Austin Tetra has been relatively silent since their acquisition by Equifax a little over a year ago. And it’s not because Equifax is in a hurry to dissolve the name (unlike D&B who appear to be trying to dissolve the Open Ratings brand as soon as possible), but because they want their new division to be well prepared with a solid offering for the B2B and B2C communities before they re-launch the service offering.

the doctor had a chance to catch up with the business leaders of Austin Tetra, Equifax’s commercial business unit, last month and it sounds like they have been making a lot of progress over the last year. They’ve been busy helping Equifax build a unique global identification system that will compete against the as-to-now relatively unchallenged DUNS # of D&B and Austin Tetra has been making good progress integrating the US, Latin America, European, and other global databases in Equifax’s arsenal into one universal database with one universal classification scheme – a task they expect to complete in the first part of this year.

They’ve also been making great strides in their service offering that pulls business and consumer data together for businesses that need to deal with small businesses on a regular basis and need to determine the risk, especially where the financial stability of the business often comes down to the financial stability of the owner. They can now, for a given small business, pull together the credit history of not only the business, but the owners as well and give you a combined risk or credit score where they have the data integrated.

They’ve also been making strides in compiling their supplier master and customer master databases where, for any given business, they can give you its performance history both as a supplier and as a buyer, as well as their employee master, where they can tell you how much the individual earned at his or her last job if his or her previous employer submitted information to the TALX database (another recent Equifax acquisition) – which has income, salary, and compensation information on approximately 150 M employees in the US.

They’ve also made great strides in their balanced scores, which aren’t just about diversity anymore. Their blended financial / risk scores now take all of the following information into account:

  • public filings (which they monitor and append regularly)
  • denied / debarred party tracking
  • blended score on individual & business credit history for small, private, businesses
  • customer credit risk based on past payment trends
  • diversity information
  • predictive supplier business failure score
    the chance of failure over the next 12 months using all available information

In addition, they’ve been extending their web services platform to make the data instantly available through customers’ current platforms and their current customers are now able to access all this data through multiple platforms that include Oracle, Siebel, and SAP.

In other words, now that they have the support of a 20B business behind them, they’ve been making great strides. However, given that they still believe in the “crawl-walk-run” philosophy when it comes to development and release cycles, they believe that it will likely be the middle of the year before everything is complete and tested (by current customers) to their liking, and hence likely the summer or fall before they attempt to make a big media splash. But that doesn’t mean that, if these are the types of solutions that you need, that you can’t start talking to, and evaluating, them now – or that, if these are the types of solutions that you might need down the road, you can’t keep a watchful eye out to see what they announce this year. Regardless of what happens, now that D&B is about to have a major competitor, I bet you’ll see a lot more innovation in this space over the next few years as the new contender in the space begins its fight for dominance – and that’s a good thing.