For most manufacturers, supplier performance is a high risk/high reward issue. Having leaned out their production processes and slashed safety stocks, many manufacturers are more dependent than ever on timely, accurate deliveries from suppliers. At the same time, those seeking lower material costs have extended their supply networks to include far-flung partners, introducing a greater likelihood of costly supply disruptions.
Apexon Inc., a young, 35-person, San Jose, CA-based on-demand service provider, is helping manufacturers such as Plantronics and the Gap track the performance of suppliers so they can reduce supply network risk and increase the reward. Unlike spend management vendors such as Ariba and Ketera, which manage transactions between suppliers and buyers, however, Apexon is focused on the analytical side of the equation, giving buyers timely insight into which suppliers are performing well and which are not.
"Apexon gives manufacturers a clean way to get a handle on who's in their supply base and how well they're performing," says Mark Hillman, a senior analyst at AMR Research in Boston. "Getting that kind of visibility is critical right now at a time when manufacturers are more sensitive than ever about dealing with supply chain risk."
The company competes primarily against home-grown, spreadsheet-based solutions or analytical implementations constructed using more generic business intelligence tools. What makes Apexon stand out, Hillman says, is that its executives boast a ton of real-world supply chain experience, which has been baked into the product through a collection of best practices and a supplier performance management data model. Apexon CEO Emily Liggett, for instance, spent most of her career in manufacturing management at Tyco, DuPont, and, most recently, as CEO of Capstone Turbine Corp.
When Liggett joined Apexon two years ago, the then four-year-old company was headed down a different path, focusing on helping manufacturers track and analyze internal quality processes. A year ago, under Liggett, the company was essentially relaunched with a much broader charter: to track the performance of a company's entire supply base.
Apexon's on-demand product is composed of three modules. The first, called Monitor, is Apexon's baseline application. It allows manufacturers to collect and view data via dashboards that display various metrics selected by the user. Manufacturers, for example, can use Monitor to track supplier cost, quality, and delivery performance. Data is generally downloaded into the Monitor online tool from the ERP customer master records or from just about any other source. As part of the initial set up, Apexon identifies the data sources that are necessary to feed the Monitor application and creates a set of batch download procedures.
The second module, called Analyze, consists of a set of online analytical tools that lets manufacturers dive into supplier data. For instance, a user can evaluate the potential impact of eliminating suppliers or expanding a relationship with a supplier.
The third module, Develop, is the newest piece of Apexon's Supply Performance Management 2.0 suite. Companies can use Develop to collaborate with suppliers. The module includes a workflow engine, project management tools, and tools for sharing performance metrics.
The Supply Performance Management suite also includes tools for profiling and surveying suppliers, as well as a portal.
While Apexon has carved out a promising niche in the supplier performance management space, analysts note that potential customers do face some risk if they choose to rely on the Apexon service. It's quite possible, says AMR's Hillman, that larger business intelligence software competitors with more resources, such as Teradata, could enter Apexon's market and make it tough for the young company to compete. Or, Hillman says, Apexon could be acquired by a larger company.
For now, however, Apexon's product promises to fill an important need: mitigating some of the risk faced by manufacturers with increasingly complex supply networks to manage.