Statswatch #2: Ramping up suppliers

Following our article introducing the ShipServ Key Performance Indicator (KPI) dashboard we look in more detail at the ‘e-enablement’ KPI.

So what is e-enablement? Put simply, it’s a KPI expressed as a percentage and shows the proportion of a ship manager’s purchase orders that go through TradeNet. The higher the level of e-enablement the more the buyer is taking fuller advantage of the benefits that come through automation – accelerated purchasing processes across the board, order cycle times cut by 30-50%, more accurate orders and less time wasted unwinding errors.

Now, its important to note that we recognize that e-enablement may never reach 100%. Not all POs can be handled electronically for a variety of reasons. For example, in our experience, somewhere between 8 and 12% of all orders are service work orders or similar, where verbal interaction between ship manager and service provider is a huge element in the overall transaction (e.g. complex repair or refit work, particularly far from a home port).

However, that said, across TradeNet as a whole, the average e-enablement of our 130+ participating shipowners/managers today is close to 75%.  So what can be done to get from 75% to somewhere between 88% and 92%?

Well you can start by understanding your e-enablement status – we find many TradeNet buyers just don’t read or understand the KPI dashboard! (So Tip #1 – pay attention to the stats!). But even if you do, you may be unaware of just how easy it is to add new suppliers, or you may have a few suppliers that say that they don’t want to use TradeNet.

Take it from us – don’t take no for an answer! Getting suppliers registered is not a barrier.

In the early days of ShipServ a refusal to participate frequently stemmed from the fact that some larger suppliers were committed to other e-marketplaces and didn’t have the time to connect to another platform. This problem has evaporated as over 27,000 suppliers have discovered just how easy it is to integrate their purchasing infrastructures with TradeNet. (If you hit this issue – Tip #2 is refer your supplier to our community list and get them to speak to one of the companies already connected).

Also any supplier saying they’re not “set up” to receive orders electronically via TradeNet is making excuses. There’s little or no work involved for them to connect with you.

Actually it’s YOU who sets them up initially! If you’ve identified a supplier that you want to work with that is not currently registered on TradeNet, you can email the TradeNet Customer Service Centre and within minutes your supplier will be registered on TradeNet. They’ll immediately be able to deal electronically with RFQ’s and order responses for free. (Tip #3 : try searching ShipServ Pages for the supplier before contacting the customer service center – if the supplier is already trading actively on TradeNet you will be able to find their TradeNet ID there.)

So there you have it. Over the years, we’ve learned that the degree of e-enablement is directly related to profitability – the more you automate, the more you save. So by benchmarking your performance on this KPI, you can measure how you compare against industry best-in-class performance. It’s simple and fast to use (we provide you with the data free with your quarterly dashboard). And the obstacles to ramping up your electronic purchasing are minimal. So get to it!

This entry was posted on Friday, April 24th, 2009 at 10:38 am.