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— February 14, 2006

Procurement & Sourcing

Guitar Center Boosts Procurement Process with TradeStone Engine
Guitar Center Inc., a major retailer of guitars, amplifiers, percussion instruments, keyboards, and live-sound/DJ and recording equipment, has turned to TradeStone Software to help it in its sourcing efforts.
The retailer, which operates 161 Guitar Center stores, will use TradeStone's Unified Buying Process product to source instruments, equipment and accessories.
Several factors complicate the supply chain for premium merchandise such as musical instruments, according to TradeStone. Big-ticket items, along with high SKU counts of low-cost accessories sourced directly from Asia, require an integrated approach to supply chain management and accurate visibility. Collaboration between suppliers, logistics providers, buyers and product managers is critical throughout the product lifecycle.
"We selected TradeStone as key to meeting our needs in system functionality, global reach and expertise," says Steven Kitay, director of product and brand management at Guitar Center Inc. "TradeStone should help us manage project details, costs and vendor communication so that new SKUs get to market faster and our overall gross margin increases."
The TradeStone Suite is expected to enable Guitar Center product managers and buyers to quickly develop comprehensive requests for quotes for its global sourcing efforts. TradeStone, Gloucester, Mass., says its suite normalizes disparate currencies, languages and lead times, and automatically calculates the estimated landed costs for a clear understanding and comparison of all the offers. For suppliers located around the globe, the TradeStone Suite “seamlessly unites and coordinates such details as product specifications, RFQ, quality control, packing list, and all the invoices and customs paperwork, eliminating redundant data entry errors and speeding up production.” The solution also enables buyers and trading partners to quickly collaborate on change orders to respond to any fluctuations in market conditions.
"We're very excited to get our sourcing department using the TradeStone Unified Buying Process," says John Zavada, chief information officer at Guitar Center. "TradeStone understands how our supplier lead times and seasonal sales patterns can impact our balance sheet. We want to optimize these processes with supplier collaboration features and eliminate redundant data entry."
The retailer's Music & Arts division operates 81 retail locations specializing in band instruments for sale and rental. Guitar Center reportedly is the largest direct response retailer of musical instruments in the United States through its wholly owned subsidiary, Musician's Friend Inc., and its catalog and web site, www.musiciansfriend.com.
TradeStone's Unified Buying Engine uses Web services technology to layer across an organization's existing infrastructure while its modular software fills in buying process gaps to provide a single view, access and interaction across the entire procurement process. www.tradestonesoftware.com

Whirlpool Relies on CombineNet for Advanced Sourcing
CombineNet, a provider of advanced sourcing and optimization technologies, will host several strategic sourcing projects in 2006 for Whirlpool Corporation.
Their agreement includes two transportation sourcing events, one for global ocean freight and one for North American truckload shipping, as well as an undisclosed number of additional sourcing projects. The North American truckload project will take advantage of CombineNet Truckload, a self-service advanced sourcing tool released in October 2005. Whirlpool previously worked with CombineNet on three other sourcing projects.
“Whirlpool is committed to deploying CombineNet's technology throughout 2006 based on the tremendous success we've achieved in our previous projects,” says Steve Alsbro, global transportation services procurement manager. “The ability to source and manage a very complex global shipping network, balancing value-based pricing with our customer expectations and meeting our business goals puts CombineNet in its own league, and that's a big reason why we use their software.”
CombineNet's advanced sourcing tools allow Whirlpool to collect more expressive offers from more suppliers. With CombineNet's optimization technology, Whirlpool procurement and logistics personnel have the ability to build scenarios that analyze supplier proposals along with Whirlpool's internal business objectives, including service levels, capacity and other typically intangible non-price considerations.
By using CombineNet's intuitive solutions, Whirlpool is able to minimize internal resources while significantly condensing the sourcing cycle. The tools give Whirlpool the ability to quickly review various award scenarios, comparing price and non-price constraints to identify the optimal mix of suppliers who meet Whirlpool's business objectives, allowing Whirlpool's sourcing team to establish a true basis for the optimal total cost of procuring goods and services, according to CombineNet officials.
“At the end of the day, it's about getting the best value from your suppliers. Cost reduction is paramount, but you must be able to ensure that you can meet your overall business goals, and that includes whether or not your suppliers can provide your organization with the service levels you need,” says CombineNet CEO Tony Bonidy.
CombineNet Truckload is available for shippers, logistics teams and supply chain consultants to configure and implement domestic truckload sourcing events.
www.combinenet.com

ClearOrbit Powers Lexington Home Brands' Furniture Procurement
Lexington Home Brands, whose name brands of furniture include Bob Timberlake, Nautica Home, Palmer Home, Tommy Bahama, Waverly, Lexington, and Liz Claiborne, as well as house brands Haley & Carter and Henry Link Trading Company, has implemented Purchase Order Collaborator from ClearOrbit.
As Lexington has sought finished furniture from overseas contract manufacturers, the company has implemented ClearOrbit's POC to automate, centralize and control the tracking of more than $55m in annual inventory across four warehouses, where over 300,000 items are received, staged, and shipped each year.
Lexington uses POC to track individual furniture containers as they are shipped from Asia. When orders are received, Lexington registers the inventory with custom barcodes generated by ClearOrbit's POC, which automatically identifies missing units or shipment discrepancies. POC also tracks the results of quality assurance tests conducted on each incoming item. With this highly detailed data captured in its Oracle ERP system, Lexington then ships finished products on to its nationwide network of independent home furnishings retailers, and Destination Home retail stores and designer showrooms.
ClearOrbit says that POC not only serves Lexington's needs for purchase order collaboration with its many vendors, but it also provides key WMS functionality to track the disposition of inventory as it moves through Lexington's supply chain.
POC is part of ClearOrbit Xtended Process Control (X.PC) Suite, which provides Lexington with process automation by extending the functionality of its Oracle E-Business Suite. The added capabilities offered by POC dramatically reduce the errors and inefficiencies associated with traditional methods of procurement and replenishment. Utilizing a “rules-based” approach that offers business process configurability without customization, POC leverages the Oracle's enterprise database model for real-time data.
“ClearOrbit's Purchase Order Collaborator eliminated a huge 'black hole' in import receiving,” says Larry Merritt, director of global logistics for Lexington. “We had no tracking of incoming items or goods that were waiting to be processed at our receiving warehouse. With ClearOrbit, we have end-to-end supply chain visibility, combined with the ability to automatically identify and reconcile shipping errors.”
www.clearorbit.com

Capgemini Energy Taps Verticalnet to Improve Sourcing
Verticalnet, a provider of on-demand supply management solutions, says that Capgemini Energy (CGE), active in business process outsourcing of supply chain operations and information, has selected the Verticalnet XE Supply Management suite as its offering platform for current and future outsourced customers. Verticalnet XE integrated functionality ranges from spend analysis to sourcing, from negotiation and contract management to e-procurement and catalog management services.
"We look forward to utilizing the Verticalnet XE Suite of tools in delivering service to our customers," says Paul Dickens, CGE's manager of supply chain services. "An end-to-end platform such as Verticalnet will enable us to drive efficiencies and savings and will enhance our overall service delivery."
Nathanael V. Lentz, Verticalnet president and CEO, says: "The integration between components of the XE suite provides CGE and their outsourcing customers with synergies that are not possible with individual, stand-alone software products. The fact that the entire XE suite is on-demand also means that CGE can deliver value for their customers sooner without lengthy software implementations and costly software upgrades." Verticalnet says that its solutions go beyond traditional spend management and sourcing approaches to provide "the visibility, insight and process control required to maximize the sustained value realization from supply management."
Verticalnet Procurement Manager is among the modules of XE Supply Management. It is designed to simplify and improve control over the procurement process.
www.verticalnet.com

European Department, Mail Order Group to Implement 'One Way to Buy'
The procurement division of European retail giant KarstadtQuelle has selected TradeStone to provide an important part of the technology backbone for its global sourcing operation. TradeStone's Unified Buying Engine will serve as the platform for KarstadtQuelle, and will be augmented by the addition of TradeStone's modular applications for Product, Sourcing, Logistics, Finance, Unified Order Management and Product Lifecycle Management.
Initially, KarstadtQuelle International Services AG, the international buying agent of KarstadtQuelle Group, will use TradeStone's Finance Module to streamline its financial operations. TradeStone says this is important because KarstadtQuelle International Services AG offers its sourcing services to other independent retailers and must comply with those retailers' unique billing and documentation requirements, as well as internal invoicing and vendor payment for goods bought on its own behalf.
"Sourcing globally is complex for any company, regardless of whether that company is located in the Americas, Europe, Asia or Africa," says Sue Welch, CEO of TradeStone Software. "A retail giant like KarstadtQuelle not only needs to carefully manage the international sourcing process, but also meet the financial demands of special regulations which require meticulous accounting and tracking. Only by integrating all the pieces can this be possible."
As an international buying agent operating 25 local offices in Asia, Turkey and Eastern Europe, KarstadtQuelle International Services AG offers professional buying services for sourcing consumer products from more than 60 countries. The services are offered to customers from the KarstadtQuelle Group as well as external customers, including mail-order business, department stores, wholesale and specialty Stores.
www.tradestonesoftware.com

Viacore Buy Enhances IBM's Business Transformation Outsourcing Service
IBM, which last year introduced its business transformation outsourcing service, has augmented that business with the recent takeover of Viacore Inc.
The acquisition expands IBM's capabilities, specifically in the electronics and retail industries, by enabling a client and its supply chain partners to easily exchange information on sourcing, as well as capacity, inventory, production, delivery, forecasting, and planning in real time. IBM says this ability enables communities of supply chain partners to reduce costs, improve responsiveness to customers and forge more tightly integrated relationships.
"Building a responsive, integrated supply chain that operates in real time with suppliers, partners and customers, is a highly complex proposition that requires a unique combination of consulting, technology and services skills," says Bill Ciemny, vice president for Global Supply Chain BTO Solutions at IBM. "With the acquisition of Viacore, IBM adds to an already well-established portfolio consisting of internal and external partner capabilities that offers clients the opportunity to outsource their supply chain, while they continue to focus on innovation and their core competencies."
"Viacore's business process integration solutions have helped our customers create dynamic supply chains that deliver significant cost, responsiveness and productivity improvements," says Fadi Chehad, CEO of Viacore. "We've enjoyed a collaborative sales and marketing relationship with IBM for several years, and our combined efforts will create a stronger value proposition for companies looking to develop a competitive advantage through supply chain business transformation outsourcing."
IBM's supply chain BTO offering helps clients optimize business processes from procurement and logistics to strategy and planning.
www.ibm.com

Perfect Commerce Acquires More of Commerce One
Perfect Commerce Inc., a major provider of on-demand supplier relationship management (SRM) solutions and The Open Supplier Network, has taken over Commerce One, a pioneer in bringing suppliers and buyers together online.
Perfect Commerce, Kansas City, helps companies improve bottom-line performance through complete source-to-settle on-demand SRM solutions, including deep supply chain expertise and services and The OSN, the "world's largest independent supplier network." By simplifying the complex challenges of the purchasing process, the company says, it enables businesses to reduce costs, improve efficiencies and accelerate the delivery of bottom-line results.
With the acquisition, Perfect Commerce secures complete ownership of Commerce One core technology and intellectual property, an expanded global presence and new revenue opportunities. By acquiring Commerce One, Perfect Commerce is able to continue to aggressively grow transaction volume within The OSN, access an established base of European customers and deliver on-demand software-as-a-service solutions to a global marketplace. Prior to this announcement, the two companies enjoyed a strong relationship with many Commerce One clients utilizing The OSN and sharing several joint customers. "With the acquisition of Commerce One, Perfect Commerce completes a strategy it began a few years ago when it acquired the Commerce One supplier and transaction network," says Tim Minahan, chief services officer, Aberdeen Group. "The deal reaffirms Perfect Commerce's roll-up strategy for the SRM market, stabilizes its SRM suite and adds more global marquee companies to Perfect's customer base."
www.perfect.com

Goodyear Retains ICG Commerce on Procurement Initiative
Procurement services provider ICG Commerce reports that it is partnering with the internal procurement department of The Goodyear Tire & Rubber Company. ICG says the initiative is designed to drive cost reductions of several millions. Goodyear has identified indirect procurement as a major element of the company's current cost reduction effort.
"The retention of ICG Commerce on our indirect procurement exemplifies our focus on driving a low cost structure, one of the seven key drivers contributing to our improved company performance," says Jonathan Rich, president of Goodyear's North American tire business unit.
Goodyear's corporate sourcing team has already established significant savings opportunities through its ongoing strategic sourcing efforts. ICG Commerce says its role is to ensure that the savings opportunities borne from these efforts are fully realized; to identify and implement additional savings opportunities in indirect buying categories; and to drive year-over-year cost improvements.
To achieve that objective, Goodyear will leverage ICG Commerce's procurement infrastructure consisting of category experts and process specialists, a best-practice-based Buying Center, and flexible tools and information to manage a broad spectrum of procurement processes, including strategic sourcing, savings implementation, transaction processing, and ongoing category management. In a prepared statement, ICG Commerce says, it will "provide a suite of services to not only help drive aggressive cost reductions in North America but also support and accelerate the utilization of an established e-procurement system."
"The combined efforts of our two teams of professionals will bring our procurement capabilities to a new level of performance," says Gary Miller, Goodyear vice president and chief procurement officer. "Our company has made good strides in identifying opportunities for savings and putting a platform in place to enable improved focus and line-of-sight alignment as well as to drive compliance through effective purchasing. ICG Commerce provides the category, process and operational expertise we need to make sure the savings are realized and continuously improved upon and the platform is fully utilized."
www.icgcommerce.com

Lawson at Work on Next-Gen Merchandising Software
Lawson Software says it and a consortium of leading players in the grocery industry are working on the vendor's next-generation Merchandising software suite.
"Our ongoing investment in Merchandising reflects our continued commitment to this industry," says Dale Christopherson, director, Retail Product Development, Lawson Software. "Based on the feedback provided by our retail customers, we're focusing our product development resources on Merchandising enhancements that will help save our customers time and help deliver a significantly lower total cost of ownership."
Lawson is reportedly updating seven applications within its Merchandising suite, including Retail Channel Order Management, Category Review, Distribution, Costs and Deals, Replenishment, Business Organizer and Reference Maintainer.
Lawson's industry-focused software solutions are designed to help retailers integrate the systems they use to run and grow their businesses. Lawson customers include five of the top 10 U.S.-based retailers, eight of the top 20 apparel retailers, seven of the top 25 grocery chains, 23 of the top 100 restaurant chains and 20 of the top 100 specialty chains.
www.lawson.com


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