Boston November 12, 2001 Buyers at technology wholesaler Ingram Micro are set to get a new tool for gauging supplier solvency and performance under a deal announced today with solution provider Open Ratings.
The solution provider today also unveiled a new predictive indicator for assessing the likelihood of short-term financial problems at a supplier.
Under the three-year agreement with Ingram Micro, terms of which were not disclosed, all product managers at Ingram will have access to Open Ratings' flagship Buyer Insight Enterprise, a system that helps buyers select, evaluate and monitor suppliers.
Open Ratings says that the system goes beyond inferences based on historical performance to predicting future supplier performance and solvency. By preempting poor performance or insolvency in the supply base, organizations potentially can mitigate supply chain risk and improve the overall performance of their supply bases.
"We needed to find a technology solution to predict supplier solvency and performance issues that would help us manage our hard and soft dollar costs", said Keith Bradley, vice president and controller at Ingram Micro US.
Ingram Micro is the largest global wholesale provider of technology products and supply chain management services. The company, which operates in 36 countries and had sales of $30.7 billion in fiscal year 2000, distributes technology products and provides services, marketing development and supply chain management services to more than 175,000 technology solution providers and 1,700 manufacturers.
"Distributors, such as Ingram Micro, in today's fierce economic climate understand that knowing about a supplier's history is not enough," said Stan Smith, president and CEO of Open Ratings.
Meanwhile, Open Ratings today unveiled its Supplier Stability Indicator (SSI), a predictive indicator for assessing the likelihood of severe, short-term financial problems at a supplier.
The SSI turns "on" when a supplier is displaying an unbalanced financial condition and is likely to be one of the riskiest 5 percent of businesses - from a financial perspective - for the next 15 to 90 days.
Open Ratings says that its benchmarking tests over the last several months, along with analyses of customers' supply bases, have shown that the SSI can accurately predict more than 95 percent of supplier insolvencies known to have occurred in a given month.
"The continued decline of global economic conditions has increased the vulnerability of experiencing supply chain glitches due to supplier insolvency," said Tim Minahan, vice president of supply chain at technology consultancy Aberdeen. "The availability and accuracy of Open Ratings' SSI can position buying organizations to proactively monitor supplier viability and performance, and adjust their procurement activities to mitigate this risk accordingly."
The SSI is available immediately through Open Ratings' Buyer Insight family of products and covers more than 15 million suppliers across North America.