Organizational Damnation 54: Marketing

So far we’ve tackled the organizational damnations of Logistics and Legal, but these are just the beginning. Today we’re going to tackle one of the biggest organizational damnations of all: Marketing. Like Legal, Marketing is one of those evils that the organization can’t live without, but Supply Management often can’t live with.

While it’s true that marketing is usually necessary to create demand for the products and services the organization produces, which in turn necessitates the demand for the raw materials, components, and services that Supply Management exists to source, it’s also true that sometimes when marketing creates that demand they use advertisements that are misleading as to the capabilities of what is being sold or promises that are unrealistic and, sometimes, those advertisements are outright lies and those promises are impossible to keep.

For example, let’s say the organization is selling a new phone. Marketing might claim it runs on a faster network (when, in reality, none of the carriers that support your phone support the faster network protocols), has a processor that is 30% faster (even though every independent benchmark only has it 10% faster and the design specifications indicated that the expected performance improvement was only 20%), and uses next generation RAM because it supports a faster MHz (even though it’s current generation RAM).

In this example, marketing is being almost realistic by stretching the truth with only a few small lies. If the organization is not as lucky, marketing might have the gall to say that your organization’s product is an effective cure for the common cold (because no one in the study caught a cold during the one year preventative trial), even though there is no evidence to that effect. (If the control group happened to be in an isolated community and were selected because they were the fittest of the group, it’s a biased study.) This is an example where marketing did not even attempt to be realistic in their claims.

But it might not stop there. Marketing might promise functions that are full of bugs, features that are still in development, and delivery schedules that would be unrealistic even if the design was complete, all the R&D was done, the team was fully staffed, and all of the resources that are required are available. As a result, Engineering will be freaking out and demanding that Supply Management find it better materials, new suppliers that can complete the work that is required in the time-frame that is available, and more talent to fill its ranks. This could be a very tall order on a very short notice.

Moreover, it’s an order Supply Management will have to fulfill for the organization to meet its obligations, maintain its brand integrity, and stay profitable. As if Supply Management’s job wasn’t hard enough to begin with.

Statess Wants to Stabilize Your State of Flux Part III

In our last two posts we introduced you to Statess and their SRM solution. With eleven years of SRM consulting behind it, and six years of Global SRM research, the platform hits the mark and provides the solution that many companies need to manage their supplier performance, development, and relationships. In today’s post we’re going to cover some of the key features of a few of the core platform modules.

As indicated in our last post, the platform is easily configured to provide a 360-degree view of a supplier and from the supplier homepage, a user can quickly access the overview report, profile data (which can be used to build a complete Supplier Information Management, or SIM, solution), performance data (collected internally and from third parties), the risk profile, associated contracts, tracked innovation efforts, Corporate Social Responsibility efforts undertaken by the organization and/or the supplier, current projects, supplier accreditations, 360-degree surveys (by the supplier of the organization), existing reports, and all dashboards that correspond to the supplier. In addition, if available (via 3rd party plugins), the buyer can also access trading information related to the supplier and its products, news feeds on the supplier, and the supplier’s media portal. Whereas some SRM solutions scatter supplier data throughout the different modules, the Statess solution, which allows for data entry and maintenance throughout the different modules, allows for the easy creation of centralized views by supplier so the organization, and a buyer, always has all of the relevant information through one common access point.

The system supports very extensive supplier profiles. In addition to basic HQ, Finance, and Contact information, the system can also store information on the supplier’s organizational structure as well as information on the supplier’s mission, vision, corporate objectives, and sustainability commitments (used in the CSR module). Furthermore, it can store extensive governance information that includes all of the individuals responsible for the relationship on both the supplier side and the organizational side, a complete stakeholder map, necessary actions, governance plans, planned meeting dates, and the minutes and reports associated with those meetings. Actions are implemented as project tasks and have owners, states, and status. This, in turn, provides a strong foundation for performance management and development programs.

At its core, the platform supports a very powerful generic survey mechanism that, like a good RFI solution, allows multiple types of surveys to be built with multiple sections, different response types (checkbox, numeric fields, free text, etc.) for each question, and automatic weighting mechanisms. This allows the organization to prepare the appropriate internal performance surveys and external 360-degree surveys that form the basis of good performance, CSR, Risk, and Relationship management programs.

Projects, which can correspond to the different types of efforts that can be managed in the system (including, but not limited to, risk management, compliance management, supplier development, innovation, and sustainability), can be associated with a business unit, optionally associated with one or more contracts or bids, and contain multiple stages or tasks, as they are defined in accordance with the traditional, well understood, project management methodology.

Performance reviews are built on KPIs (Key Performance Indicators), one or more KPIs can be built for each area (risk, compliance, CSR, contract, etc.) of interest, and the review can be broken down by key area. Year-over-year changes can be automatically calculated and the data can be imported from external systems or the ERP in supported data formats. Color-coding and drill-down views allow an organization to quickly pinpoint problem areas and then launch development initiatives off of the relevant area or KPI. KPIs have an extensive definition in the system (which includes categorization, associated business units, organization and supplier owner, input/import method, update frequency, default reporting frequency, tolerance levels, etc.) and, when properly defined, become a powerful performance measurement and management tool.

Risk tracking is also quite extensive, allowing the organization to categorize risks in different categories and track them using external data feeds (or manually entered data), define and store supplier contingency and business continuity plans, and integrate Lexis Diligence in real-time against the supplier and identified risks of interest.

Contract Management tracks all of the contract meta-data that you would expect, supports versioning, stores default templates, tracks contracting entities, and even allows for the definition of sibling (related) and child contracts so a buyer can not only quickly retrieve a contract for a product or service, but determine if there are any other contracts of relevance if she is sourcing a category or thinking of dealing with an entity wholly owned by the supplier.

The innovation module serves two primary functions. First of all, it allows an organization to centralize tracking and management of supplier projects focussed on innovating (a new product design or service). Secondly, it allows the organization to track public challenges that it issues on sites such as Innocentive. This is a useful capability that many software solutions overlook.

In summary, the new Statess solution is a very extensive SRM platform that makes a great entry point for any company wanting to get their SRM under control.

Statess Wants to Stabilize Your State of Flux Part II

In our last post we introduced you to Statess, a relatively unknown solution provider in the SRM space on this side of the pond even though they were conceived from State of Flux who have been producing leading SRM research reports for six years, in business for eleven, and are a leading provider of SRM consulting in the UK.

We discussed how they offer a SRM suite focussed on performance, contracts, risk, innovation, relationship, and sustainability management with over fifty sub-modules that address dozens of facets of performance, risk, and relationship management. We also noted how the platform could, if needed, be used for category management in addition to contract management, CSR management, and even the management of overall supplier development programmes.

The first thing to note about the Statess SRM platform was that it was designed to be modular, flexible, and adaptable. This means an organization can not only choose only the functionality that they want from such a platform, but can configure it how they want and even customize the terminology used in the UI. Even if an organization could use all of the functionality, sometimes a staged roll-out with limited functionality is best at first as this allows training to be focussed and prevents users from getting overwhelmed and avoiding the system. (And if the organization has systems with some of the functionality and wishes to keep using those existing systems, disabling duplicate functionality makes sure that the users don’t get confused.)

The next thing to note is that this web-based platform is highly configurable. Not only can the user define and customize reporting dashboards, as one would expect from any modern tool, but the user can design and customize their home page and the view for the entry point to every module they have access to. Basically, not only do all reports have overview widgets, but all action types have summary widgets, particular to what the user can see and do, that can be shown or hidden, rearranged as the user sees fit, and customized from a look-and-feel perspective. This allows the user to create a page that focusses on upcoming and overdue actions, quick access to artifacts (such as contracts, audits, certifications, etc.) stored in the system that they need to review on a regular basis, and entry points for key tasks that the user performs on a regular basis instead of just a shiny dangerous and deadly dashboard (which is where most systems stop).

After this, the next most important thing to note is that the user can create views from both an organizational perspective and a supplier perspective. The latter allows them to focus on a 360-degree view of a single supplier, as opposed to just an organizational view from a performance, relationship, or contract perspective and even replicate what the supplier will see based on what information they choose to share (with the supplier). Furthermore, from this view they can create or access any data or system artifact that relates to the supplier, regardless of the module it lives in as well as initiate new survey, innovation, or development programmes. The system maintains the necessary multidimensional relationships between the different data elements to enable the buyer to rapidly configure and access multiple views. Just like the best insights in a spend analysis project often come from looking at the data in unconventional ways, the best insights into supplier performance and, most importantly, development opportunities often come from looking at the supplier (data) from multiple perspectives. Statess realized this and built a tool that could support these multiple perspectives.

And the last point we are going to note in this post is that the platform, while quite extensive, is still looked upon as an early stage solution and is being actively, and aggressively, developed and more (and deeper) functionality will materialize over time, as well as more integrations to third party systems and data sources to shorten the average implementation timeframe and progress towards even more of an “out of the box” solution.

In our third, and final post in this initial series on Statess, we’ll overview some of the key capabilities of a few key modules.

Statess Wants to Stabilize Your State of Flux (Part I)

These days an average organization has a lot of uncertainty to deal with as a result of sustainability, regulatory, and risk headaches that plague it on a daily basis. These headaches range from paperwork headaches to regulatory migraines to minor delivery hiccups to major supply chain disruptions depending on whether an import form wasn’t received on time, certification requirements for key personnel were not completed, a strike erupted at a major port, or an earthquake destroyed a major production plant.

However, that uncertainty can be reduced with good planning, monitoring, and execution. Somewhat ironically, achieving this requires proper planning to identify the right processes and technologies that can be used to not only monitor the supply chain for events that can cause disruptions, but create mitigation and continuity plans that can be executed at the right time. And while it’s not always easy to identify the best processes, it’s a bit easier to identify the right kind of technologies. An organization that wants to reduce uncertainty needs to implement systems that monitor for events outside of its control that could increase its organizational risk and cause unexpected disruptions and it needs to implement systems that monitor for issues inside of its control that, if left unchecked, could increase risk or decrease effectiveness. One of the most important systems in this latter category is a SRM (Supplier Relationship Management) system because an organization’s suppliers, that often are the recipients of up to 80% of organizational spend, represent one of the biggest known, and manageable risks, to the organization.

While SRM solutions aren’t new, new SRM solutions are still being developed, and one such SRM solution that you likely haven’t heard of that could meet your organization’s needs is Statess. Although it’s a relatively new solution, it’s quite mature for its age as, unlike many solutions that first hit the market, it was not developed by a new software company but originally conceived of over six years ago by State of Flux, a mature, eleven year old provider of Supplier Management consulting, training, and research services (that recently rebranded their technology division as Statess). Even though you may never have heard of them, as they are on the other side of the pond, State of Flux is a leader in best practices and thought leadership for Supplier Management, and has been producing the Global SRM Research Report for the last six years. That’s longer than a number of self-proclaimed industry leading research firms on this side of the pond have been around!

As a result of this research, and the consulting they did for their clients, they not only quickly realized the need for a proper tool to manage supplier relationships, but realized that if the tool was not designed to streamline the common operations and adapt to the organization’s needs, it would not be effective. Based on this, they set out to design a tool that would work for the average organization it served and not end up as another piece of shelfware. Such a tool would not only have to help manage relationships and performance, enforce compliance, and mitigate risk, but also promote supplier development, allow for cross-organizational team collaboration, and, most importantly, go beyond just management to encourage true supplier innovation. In addition, depending on organizational need, the platform may need to support and manage contracts and categories, address sustainability and Corporate Social Responsibility (CSR), and manage overall supplier development programmes.

It’s a pretty tall order, but the new Statess supplier management platform meets the bill with core modules for relationship management, performance management, contracts management, risk management, innovation management, and sustainability with over 50 uniquely defined sub-modules that address different aspects of contracts, performance, risk, innovation, and relationships.

In our next post we will begin to discuss the capabilities of the solution in detail and how it addresses each of these core issues.

Societal Damnation 40: Crime / Piracy

These damnations have been around longer than supply chains, and they aren’t going away any time soon. THe only difference is that today the types of crime an organization is exposed to today are much more varied than the crimes an organization was exposed to in the past. For example, terrorist attacks, identity theft, and cybercrime were not something the average large organization had to deal with on a regular basis, if at all.

But now, terrorist organizations, many of which are composed of individuals who are ex-military or trained by military and/or government agencies, are becoming common in many countries where there is significant civil unrest or animosity towards a people or government. And these terrorist organizations often target large shipments of goods that they need to sustain their efforts near the territories that they are based in — and this is not just restricted to weapons but also includes fuel, food, clothing, and personal electronic devices. It’s not just common thieves and criminal groups plotting to steal a few boxes or empty an 18-wheeler when the driver takes a lunch break — it’s a terrorist organization planning to steal an entire convoy of 18-wheelers (because they want the trucks too).

It used to be that identify theft was when one person impersonated another to fool an unsuspecting individual at a company or bank to gain access to funds or products, and this could easily be protected against by good security measures, passwords, and biometrics, but now we have the situation where the identify of entire companies is being stolen. This has become especially prevalent in the US since the introduction of MAP-21 (which SI likes to call RIP-21) which resulted in thousands of small transport companies going out of business when the minimum bond was increased from 10,000 to 75,000. Shortly after this happened, some very enterprising individuals decided to setup fake companies that pretended to be the company that was out of business. They faked registration documents, insurance certificates and bonds, and personnel records, presented themselves to 3PLs that the company previously worked with (stating that they managed to raise the bond money and were back in business), and even presented themselves to large manufacturers and retailers the company used to do business with. When contracts were awarded, they acquired trucks, hired drivers, and made deliveries. Some of them even operated just like a legitimate company for months until they were trusted with a multi-million dollar shipment of products that would fetch a similar sum on the black market — then they vanished overnight with millions of dollars of products. (See SI’s post on how increased cargo theft is the next impact of MAP-21.

And cybercrime has hit entirely new levels. It used to be that the best a hacker could do was steal a bank account number and password, do an ACH transfer, and make off with the operating account. But now, hackers can infiltrate your networks and make off with all of your bank account numbers and passwords, hack other networks and replace the corporate director and officer records, falsely represent themselves as your company to banks and lenders (by stealing the identities of your corporate officers and then hacking your virtual private networks and spoofing your IP addresses to access your bank accounts in what appears to be a legitimate access by the bank), take out massive loans and not only make off with every dollar in every account you have, but leave your company on the hook for millions more. And that’s if the hackers are being nice. Plus, while the hackers are at it, they hack your merchant terminals, steal all of your customer’s credit card information, sell it on the black market, and leave you with a massive media black eye that puts your brand reputation in the toilet.

If you thought the Fraud and Corruption (as chronicled in Damnation 41) was bad, just wait until you have to deal with the new terrorists, identify fraudsters, and cyber-criminals. And if you survive this first wave, then you get to deal with the Somali pirates! (And they are a whole lot meaner than the Saskatchewan pirates.)