Managing Automation - February 2008 - (Page 34) [ TRANSFORMATION ] Transformation TechWatch Integration retailers, and wholesalers in this arena track the CPG, automotive, and high-tech industries. their suppliers’ on-time delivery performance, High tech, in particular, has been focused on but nothing more. sourcing and procurement risks for many years, “If you don’t know how many factories your supsays Harish Iyer, senior director of supply manplier has or who their suppliers are, if something agement solutions for i2 (see sidebar, p. 33). goes wrong, the entire product line is at risk, and “We enable you to monitor a host of metrics that can impact your revenue,” Burgess says. relating to supplier quality to do supplier scoreAnother key metric is code of conduct status: carding. You can tie that into supplier analysis, whether the supplier is compliant with child lawhich can be used to do supply base rationalibor laws. A manufacturer’s brand image and zation,” Iyer says. reputation are at stake if its suppliers fail to folWith the fragmenting forces of globalization, low these laws. the nature of the strategic sourcing problem is Centric’s software, announced in June 2007, changing, according to Iyer. “Your suppliers falls under the heading of “product intelligence,” according to Burgess, and “If you don’t know how many factories your represents a broadening of the product supplier has or who their suppliers are, if lifecycle management (PLM) category. Traditional PLM focuses on pure de- something goes wrong, the entire product sign data relative to a bill of materials line is at risk.” — Centric’s Betsy Burgess (BoM). Centric’s market “sweet spot” is consumer goods companies that deal in soft used to be in your backyard. You did not have to goods and apparel, for example. “These goods worry about anything other than just the price are low-cost, high-margin, and high-volume. per piece. Now you have to monitor quality, take These companies have very different needs for logistics costs into account, worry about political PLM. They still want to track the product speciunrest. Supply chain risk comes in different fication and all the information about whether forms today,” he says. they will get a product to market on time, but the However, it’s not necessary to buy a full-feaapproach is different from traditional PLM,” tured platform to get a better handle on reducing Burgess says. sourcing risk. A host of lightweight e-procurement solutions — many offered in an on-deFACTORING IN RISK mand, hosted model — offer relief from the Centric Strategic Sourcing helps customers mantangle of e-mail, phones, and faxes without age the selection of products from the earliest breaking the bank. concept, to tracking the SKUs, to “The first part of any strategic sourcing efdetermining the cost of landed fort is simply understanding the supply base managingautomation.com goods with all the financial varithat is out there,” says Matt Miller, president RELATED ARTICLES: ables. Most companies in this of K2 Sourcing, an e-procurement software venBoeing’s Big Supply Chain Wager market segment have been getdor. With K2 Sourcing, users can create an elecwww.managingautomation.com/boeing ting by with a mix of homegrown tronic request for information that will help them Beating the Odds in Global Supply applications, spreadsheets, and quickly winnow the pack of potential suppliers www.managingautomation.com/globalsupply e-mail — the hodgepodge of stuff using weighted responses in a matrix. The comDirectory Product Feature: PLM that still keeps most businesses pany’s eRFI tools, available for a free trial, help www.managingautomation.com/PLMupdate running. One problem with these pin down exactly whom you’re dealing with — a Directory Product Feature: SRM office stalwarts is they don’t allow supplier, its agent, or, worst, a trading intermewww.managingautomation.com/SRMupdate companies to add the dimension diary — so manufacturers can make more inDirectory Product Feature: SCM of risk to their sourcing deciformed sourcing decisions. www.managingautomation.com/SCMupdate sions. “To do risk mitigation, Of course, none of these products eliminates you’ll need to invest in a tool,” the need to look a supplier in the eye and visit its COMPANIES MENTIONED: Burgess says. plants. No matter what industr y you’re in, if Centric Software www.managingautomation.com/Centric Or, if you’re already using a you’re going to source a significant quantity of software suite, you might be able goods overseas, sooner or later you will have Dun & Bradstreet www.managingautomation.com/DNB to use a strategic sourcing addto visit. Dealing in person with an important in. i2, for example, offers i2 Total supplier is a key element of risk reduction. i2 www.managingautomation.com/i2 Supply Management as part of its Most procurement organizations are just besupply chain management suite ginning to evaluate and mitigate sourcing risks, K2 Sourcing www.managingautomation.com/K2 of applications. The company Lawton of D&B says. “Risk is new for them, but serves manufacturers chiefly in they are learning in a hurry.” s maonline ma February 34 2008 Industries http://managingautomation.com http://www.managingautomation.com/boeing http://www.managingautomation.com/globalsupply http://www.managingautomation.com/PLMupdate http://www.managingautomation.com/SRMupdate http://www.managingautomation.com/SCMupdate http://www.managingautomation.com/Centric http://www.managingautomation.com/DNB http://www.managingautomation.com/i2 http://www.managingautomation.com/K2
For optimal viewing of this digital publication, please enable JavaScript and then refresh the page. If you would like to try to load the digital publication without using Flash Player detection, please click here.