EBN: What are the key strengths and differentiators of Sourceability? Where do you see your business evolving over the next five years?
Gamperl: One of the frustrations of the traditional system is the huge amount of data that the independent distributor had to work. Large OEMs or EMS had tens of thousands of partners and the customer would want global view of availability and pricing for all of them. We would manipulate the data in a spreadsheet and send it out to suppliers. It could take several days, and we’d spend a lot of time on it. The interesting thing is that we would get quotes back and they would all be totally different. We’d then have to collect all the data and put it back in the spreadsheet. For 10,000 part numbers, we might get thirty or forty orders—and that data was immediately obsolete. About 80 percent of the business is still done like this today.
Sourcengine parts search
The problem is that the spreadsheet is outside the enterprise resource management (ERP) system, which is the heart of the operation for most customers. It is akin to taking data from the heart of the operation and doing surgery outside of the chest. I decided I wanted to stop wasting resources and develop technology that enabled suppliers to put all of its data into a system that was then made available to my customers. (Editor’s note: The resulting digital platform, called Sourceengine, has been available as a beta product to some customers for about six months, according to Gamperl.)
Over the last six months, we’ve developed 1,200 suppliers, all traceable from franchised distributors or manufacturers who are willing to put up their data on Sourceengine. Today, we have about two dozen uploading information through an application programming interface (API), but the majority use a File Transfer Protocol (FTP) to upload and update product data each night. Others send an XML sheet weekly to update lead times. Especially in shortage times, though, any delay carries a risk for us.
Today, Sourceengine contains 15 million unique part numbers and, on average we have 12 or 13 offers per part. The platform is capable of quoting up to 10,000 lines in bill of materials (BOM) in 20 seconds The beauty is that you can fully execute the order from the system. If you like the pricing and lead time, you can push a button that executes the order with a supplier and the transaction will be done and guaranteed through Sourceability.
Sourceengine parts search results
I would consider us a hybrid of franchised and independent distribution. Right now, we have 18 to 20 lines signed and 15 or 20 in the pipeline. By the end of Q1, we will be franchised for 50 manufacturers. But we also work with authorized franchised distributors buying for requisition. We take the order, consolidate the shipment, and ship directly to the OEM or EMS. One day, though, we might just be a platform where people transact orders that are then filled directly by the manufacturer or distributor. I could imagine that it would be a licensed based offering or something like the Amazon platform. What we do today is develop the technology so people can transact on a digital platform. Rather than spending money to integrate with every distributor, customers can integrate once with Sourceability. When we started, we talked to the supply people but it has become much more of a conversation with information technology (IT) people.