Over the course of the COVID-19 pandemic, we’ve all heard about the macro supply chain issues that have broken the news and impacted our day-to-day lives. As a result, there have been shortages and delays in a multitude of items and materials, ranging from COVID testing kits, baby products, to even champagne.
Several shortages stemmed from unexpected supply and demand swings impacting suppliers operating with the “just-in-time” framework. Just-in-time manufacturing is a Japanese supply chain philosophy that was initially practiced in the 1970s, and it was a means to reduce unneeded inventory and increase efficiency.
While supply chain issues were brought to focus during the pandemic, many of them were already problems that were simply exacerbated. The whole industry is ripe for automation, and Norwest has invested heavily in the supply chain and procurement space over the last few years by backing strong teams at companies such as Propel, Enable, Avetta, and Supplier.io.
That’s why we are elated to announce our Series C investment in SourceDay! We’ve been speaking with the founders’ Tom and Clint for a couple of years now and have been impressed with the domain expertise that they bring to the table. We are excited to be partnering with the SourceDay team on this journey to improve direct spend management.
For a quick refresher on direct vs. indirect spend, direct spend is what a company profits off of and is thus more mission-critical to get right with regards to speed and quality. On the other hand, indirect spend is what a company purchases to maintain operations of their business (office expenditures, services, T&E, etc.).
For most suppliers and buyers, direct spend management is still typically handled through outdated methods such as email and fax which can often lead to errors. Especially with direct spend, there are usually more touchpoints of communication between the buyer and supplier prior to completion. This is due to the customized nature of direct spend. 52% of purchase orders will change before completion of the transaction, and late parts can cause delayed shipments to customers – or shortages, which comes back to unpredicted disruption as in the case with just-in-time inventory.
To alleviate these problems, SourceDay has built a direct spend procurement platform that helps organizations automate their purchase orders, improve supplier collaboration, and receive supplier orders on time. From Fortune 100 companies to mid-sized manufacturers, thousands of organizations use SourceDay to connect their teams with their suppliers, centralize order data, and drive their businesses forward. One of their main offerings is Purchase Order Collaboration, which is critical and time-sensitive on the direct spend side of procurement.
We’ve watched the SourceDay team expand over the last couple of years with heavy-hitting executives, such as Peter Feldman, an experienced CTO, Jim Hilbert, a customer-centric CRO, and most recently Sarah Scudder, a “Manufacturing Maven” as CMO. Over the last few months, we also had a chance to speak to a few passionate customers who have benefited greatly by utilizing SourceDay’s platform to ensure on-time deliveries, reduce errors, and save buyer time.
Overall, we view this as an incredible opportunity to back a team with domain expertise as they build a company that has strong potential to disrupt an underserved market. Norwest welcomes them to our growing portfolio of supply chain solutions. You can read the SourceDay press release here.