As you read today’s post, I want you to keep the following three things in mind:
- AI needs humans more than humans need AI
- Logos on maps and lists create more confusion than insights
- Business is and will always be “Personal”
I was recently asked the following question: Why did you choose Mintec over Beroe for your Analyst Map?
It was a fair question.
As a matter of transparency, I have known Beroe Co-Founder & Director Emeritus Rob Handfield for many years. I have had the pleasure and privilege of moderating countless panel discussions in which he was a valued and respected member. As far as I am concerned, he is one of the greatest data minds in our industry.
Please read this post with the above in mind.
When I added Mintec to my Analyst Map as one of my Top 10 solution providers, the first thing I realized was that proof of ROI can be difficult, given the company’s super protective attitude toward its clients’ results. In other words, like secret recipes and other competitive advantages, actual data-driven savings through more strategic buying decisions are a closely kept secret.
From my standpoint, I am not interested in the who as much as the what—actual savings numbers versus the vague, generalized percentages most websites and case studies report, such as the following 2018 McKinsey article: “Managers have an opportunity to achieve 5-15% savings in this spend category.”
Savings of 5 -15% is quite a range. On $1M COGS, that would be $50K to $150K. How do you do a cost justification analysis or negotiate a user fee that both you and the provider can feel good about?
I have one more point to add—and this question is based on actual research—are said savings sustainable beyond the first year? Did anyone ever follow up to see if these savings were actually achieved in subsequent years?
Preliminary Projection Information
If you go to the Mintec website, you will read the following:
On average, our customers tell us they can typically save over 2-3% on their COGS.
Using Mintec data in supplier negotiations, they can control price inflation and reduce proposed price increases across branded and private-label goods.
That means that for every 100 million dollars you spend on materials, Mintec could save you more than 3 million annually.
“We save a small proportion in a single negotiation using Mintec, but these savings can be significant when you spread it out across the year.” – Mintec Client
I am considerably more confident in realizing a 2-3% COGS savings projection than in predicting a 5 – 15% chasm.
However, the above information still wasn’t enough because on the other side of my endorsement, are trusted relationships with practitioners who represent most of my readership and followers.
Suffice it to say I am working on getting more specific numbers regarding client ROI—I am not looking for names but actual numbers or percentages. Stay tuned.
In The Meantime, What About AI
“These capabilities will leverage AI – but we want to emphasize that when we talk about AI, we’re not just slapping a novel label on old technology. We’re using AI to help power fundamentally new solutions.” – Mintec, February 6th, 2024
What was your initial takeaway from reading the above Mintec comment about AI and its platform?
Now, I am going to ask you this question again, but before you answer read the following excerpt from a January 2024 diginomica article:
“We talk all the time about this high rate of failure for AI projects, 70-80% of AI projects that get started either never complete, or complete to a point where they are not meeting the objectives, and they fail or have to be cancelled. It’s a lot of time and resources wasted, but also some potential big risks.”
Mintec was founded in 1981 – 43 years ago. Ironically, it was around that time that I began my career in high-tech and, subsequently, procurement as both a practitioner and provider. A lot has changed technology-wise during that period. During those 43 years, I have come to view supply chain resilience and adaptability not as a series of technological breakthroughs but as measured by the depth of experience and expertise behind the technology.
“How is historical data used and why is it important? In a business context, historical data is used to make important strategic decisions about the present and future. Managers use historical data to track organizational performance over time, identify areas of improvement and make predictions about future trends.” – TechTarget, November 2022
Think about it: Mintec has a deep history of industry knowledge and corresponding data that elevates your vision and understanding beyond current events, creating crucial historical context. What context does is make future predictability even more reliable. The fact that they have been able to recognize and transition their wealth of historical knowledge to every new technology that has emerged during the past 40-plus years means that you are not only working with a mature provider but a progressively smarter one as well. True supply chain resilience and adaptability are all about access to timely and contextual data.
Beroe was founded in 2005, 24 years after Mintec. I had to ask myself and answer the question of how vital that 24-year head start on data capture and knowledge is.
30
Procurement Insights
Mintec Versus Beroe: Are AI COG Savings Real And Sustainable Beyond Year One
Posted on May 25, 2024
0
As you read today’s post, I want you to keep the following three things in mind:
I was recently asked the following question: Why did you choose Mintec over Beroe for your Analyst Map?
It was a fair question.
As a matter of transparency, I have known Beroe Co-Founder & Director Emeritus Rob Handfield for many years. I have had the pleasure and privilege of moderating countless panel discussions in which he was a valued and respected member. As far as I am concerned, he is one of the greatest data minds in our industry.
Please read this post with the above in mind.
When I added Mintec to my Analyst Map as one of my Top 10 solution providers, the first thing I realized was that proof of ROI can be difficult, given the company’s super protective attitude toward its clients’ results. In other words, like secret recipes and other competitive advantages, actual data-driven savings through more strategic buying decisions are a closely kept secret.
From my standpoint, I am not interested in the who as much as the what—actual savings numbers versus the vague, generalized percentages most websites and case studies report, such as the following 2018 McKinsey article: “Managers have an opportunity to achieve 5-15% savings in this spend category.”
Savings of 5 -15% is quite a range. On $1M COGS, that would be $50K to $150K. How do you do a cost justification analysis or negotiate a user fee that both you and the provider can feel good about?
I have one more point to add—and this question is based on actual research—are said savings sustainable beyond the first year? Did anyone ever follow up to see if these savings were actually achieved in subsequent years?
Preliminary Projection Information
If you go to the Mintec website, you will read the following:
On average, our customers tell us they can typically save over 2-3% on their COGS.
Using Mintec data in supplier negotiations, they can control price inflation and reduce proposed price increases across branded and private-label goods.
That means that for every 100 million dollars you spend on materials, Mintec could save you more than 3 million annually.
I am considerably more confident in realizing a 2-3% COGS savings projection than in predicting a 5 – 15% chasm.
However, the above information still wasn’t enough because on the other side of my endorsement, are trusted relationships with practitioners who represent most of my readership and followers.
Suffice it to say I am working on getting more specific numbers regarding client ROI—I am not looking for names but actual numbers or percentages. Stay tuned.
In The Meantime, What About AI
“These capabilities will leverage AI – but we want to emphasize that when we talk about AI, we’re not just slapping a novel label on old technology. We’re using AI to help power fundamentally new solutions.” – Mintec, February 6th, 2024
What was your initial takeaway from reading the above Mintec comment about AI and its platform?
Now, I am going to ask you this question again, but before you answer read the following excerpt from a January 2024 diginomica article:
“We talk all the time about this high rate of failure for AI projects, 70-80% of AI projects that get started either never complete, or complete to a point where they are not meeting the objectives, and they fail or have to be cancelled. It’s a lot of time and resources wasted, but also some potential big risks.”
Mintec was founded in 1981 – 43 years ago. Ironically, it was around that time that I began my career in high-tech and, subsequently, procurement as both a practitioner and provider. A lot has changed technology-wise during that period. During those 43 years, I have come to view supply chain resilience and adaptability not as a series of technological breakthroughs but as measured by the depth of experience and expertise behind the technology.
“How is historical data used and why is it important? In a business context, historical data is used to make important strategic decisions about the present and future. Managers use historical data to track organizational performance over time, identify areas of improvement and make predictions about future trends.” – TechTarget, November 2022
Think about it: Mintec has a deep history of industry knowledge and corresponding data that elevates your vision and understanding beyond current events, creating crucial historical context. What context does is make future predictability even more reliable. The fact that they have been able to recognize and transition their wealth of historical knowledge to every new technology that has emerged during the past 40-plus years means that you are not only working with a mature provider but a progressively smarter one as well. True supply chain resilience and adaptability are all about access to timely and contextual data.
Beroe was founded in 2005, 24 years after Mintec. I had to ask myself and answer the question of how vital that 24-year head start on data capture and knowledge is.
30
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