This is the second in a two-part interview with Paul Noel, senior vice president of procurement solutions at Ivalua, Inc. Missed Part 1? Read it here.
MetalMiner: How do you see procurement and supply chain applications overlapping (or not) from a technology perspective in manufacturing? What is “the line” between them (if there is one anymore)?
Paul Noel: Procurement and supply chain applications traditionally overlap. Both these applications have the following:
- Supplier master data and item master data
- New product introduction data, such as BOM, designs, specifications and project plans
- Product quality data, such as initial reviews, quality certs, first article inspection data, APQP reviews and data
- Supply chain and supplier risk data
- Supplier performance, KPIs and error data, along with improvement plan data
- Assets and tooling data, including supplier loaned and leased assets
- Inventory data, such as central, in-factory stock-rooms, vendor managed inventory data, etc.
Our view is that procurement applications are developing and innovating at a more rapid pace than supply chain applications when it comes to affecting core business operations, expanding their functional footprint into the supply chain, and in some cases, becoming the primary master source of record (e.g. in case of supplier master and risk data). As an analogy, procurement applications today represent multiple “garage bands” — some in the process of becoming rock stars — of the business, while supply chain is a conductor, orchestrating activity deep within the supply base. Both are different — and needed.
Supply chain is, however, continuing to orchestrate activity.
MetalMiner: What is your view on commodity price volatility? What are you hearing from your customers?
Paul Noel: The most current information is key, of course. That means that when you are buying volatile commodities, you need to have a facility to quickly perform item validations with contracted vendors to ensure you are seeing the best price for the current market. In some industries, it needs to be a lights-out operation that reminds suppliers of their commitments and solicits their re-bids on a schedule. This isn’t just asking for the latest price, but also changes in packaging, lead time, ship-from information and so forth. Read more