E-Sourcing Forum » Technology to the Rescue

Technology to the Rescue

October 18th, 2006 at 06:57am David Bush - Iasta

In the September issue of Inside Supply Management, we find the column Beyond Lean, Tech Rules that notes that Leveraging technology, the key to profits and growth, will take you five steps ahead of your competition.

The article indicates how should cost modeling, inventory management, and dynamic visibility solutions can be used to decrease risk and cost and move your supply chain forward and gives examples. However, one thing it does not mention is that even a basic sourcing suite, properly used, can achieve most of the desired results.

For example, most sourcing suites, even the on-demand ones, will contain contract management and compliance tracking capabilities. If you also track delivery times and quality, and compare them against expected delivery times and quality, you can often get an early warning of potential problems, much sooner than if you are just tracking financials or relying on one-time supplier audits to determine supplier stability.

If you use the analytics capability of your spend analysis solution on the expected and actual delivery dates, you can get an idea of how often you need product, how fast you can get product, and use that data to refine your inventory requirements and possibly save inventory cost as efficiently managed inventories are leaner, smaller, and cheaper.

If you construct detailed RFPs and create what-if scenarios in your decision optimization tool for different product configurations, you can get a decent idea of what a product should cost and this can help you out in make vs. buy decisions as well as detailed negotiations.

Should cost modeling, inventory management, and supply chain visibility are all important aspects of today’s sourcing function, and dedicated solutions can be valuable, but it all starts with the basic sourcing cycle, best practices, and a sourcing suite that meets the needs of today’s sourcing professional. If you don’t have the basics in place, an advanced, dedicated, solution probably will not do you much good.

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Entry Filed under: Functionality, General, Technology / SaaS

1 Comment Add your own

1. David Weatherford | October 18th, 2006 at 4:05 pm

I agree with your comments above but especially with your last paragraph. I have managed eSourcing applications at my company for 4 years now and over those 4 years we have implemented 3 different applications. The biggest issue we have had is the notion among some executives that the application will make up for the fact that sourcing professionals stray from best practices and the prescribed sourcing process. Sales folks from the applications sell our leadership on the strengths of the tools and when the tool fails to deliver, (sometimes its the tool, sometimes its the incorrect use of the tool and sometimes it’s non compliance with best practices) the tool gets all of the blame.

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