Net Best Thing: August/September 2005

New and notable solutions for the supply chain in Procurement and Service Parts Logistics

PROCUREMENT: e-Procurement Targets the Mid-market The mid-market is getting a lot of attention from the e-procurement players of late, and just in time. "With continued pressures to improve performance and reduce costs, sourcing, procurement and supply management initiatives, and automation investments are now not only a priority but a necessity for mid-market companies," says Tim Minahan, senior vice president for global supply management research at Aberdeen Group.

e-Procurement solution providers that have recently targeted their offerings at the mid-market include Ketera, which has added new supplier members for its online procurement network with an eye toward giving mid-market companies access to better pricing in such categories as office supplies, information technology and electronics supplies. Elsewhere, SciQuest this summer debuted "express" versions of its supplier management toolsets, targeting mid-market organizations with lower-priced preconfigured, Web-based e-procurement applications.

These and other solution providers may have good cause to view the mid-market as their next area of opportunity. According to Minahan, Aberdeen benchmarks show that more than half of mid-market companies have plans to invest in "on-demand" solutions and services to improve supply management operations.

SERVICE PARTS LOGISTICS: Same-day Parts Service No Longer a Luxury Enterprises increasingly are viewing same-day parts availability as a critical component in maintaining high levels of service quality and operating efficiency within their organizations, and growing numbers of companies are turning to outsourcing to meet stringent service level agreements, according to a recent survey by D.F. Blumberg Associates, a research and consulting firm to the high-tech service industry. "Today's leading companies are viewing same-day parts management services as a business imperative, and they are outsourcing in order to succeed at it with the No. 1 criteria being superior service," said Michael Blumberg, president of D.F. Blumberg.

At the same time, some solution providers in this space are teaming up to offer broader offerings in this space, including services that go beyond just delivering parts. For example, Choice Logistics, which provides service logistics and supply chain solutions, is combining its same-day service logistics network with the parts inventory network operated by System Design Advantage (SDA), a provider of parts replenishment and repair solutions, to offer an integrated logistics and parts/repair solution. The alliance with Choice has expanded SDA's capabilities in the emerging market for virtual-managed inventory asset services, a subset of the $1.7 billion service parts market.