During 1994-5 Sherry Gordon and I worked on a supplier assessment tool as part of our NESI (New England Suppliers Institute) work. With the help of John Martin of the consulting firm Chadwick, Martin & Bailey we developed an organizational assessment tool based on the Malcolm Baldrige National Quality Award Criteria. John was a Baldrige Examiner and both Sherry and I served on the Massachusetts Quality Award Committee as Examiners.

Building quite explicitly on the Baldrige Criteria we developed a questionnaire that asked a range of employees in companies to evaluate statements about functions and policies at their company using a scaled response tool (e.g., This statement describes our company: “not at all……..to………completely”). There were approximately 150 questions. The results of 15 to 20 respondents from a range of functions and work roles. We tested this on a number of NESI member companies with good results. But the data collection on paper and then analysis manually made it a clumsy tool in practice.

In 1998, with the winding down of the Air Force support for NESI, Sherry and I took our client list and the various lean manufacturing and supply base management tools with us as we departed Bay State Skills Corp, our parent organization. At first we continued our workshops and consulting around these products. We brought on a former Stanley Works C-level manager Jim Amtman. We wandered around in various adventures including developing a management portal that aggregated all of the key financial and operational data for the extended enterprise in one place. Ultimately we sent Jim on his way and returned to what we new the best. It occurred to one of us that with the internet as a data gathering and analysis tool we could in fact scale up and successfully deploy our mothballed supplier assessment tool. With business plan in hand we went in search of funding for the development of the software. After a number of fruitless and at times insulting meetings with local angel investors and venture capital firms, one guy, in the midst of rushing us out the door after a ten minute meeting asked, “Do you have cuystomers?” We replied with a list that included Boeing. He then said, “Go ask Boeing to invest”. Light bulb moment.

With some maneuvering we set up a meeting with our Boeing friends from the NESI days. We presented them with four ideas. Three they said they didn’t understand, but the fourth, supplier assessment, could be really useful to them. They were spending $40k-$50k per year per supplier assessing and trying to improve supplier performance. Our web-based assessment tool could be a real advance for them. In the end, after a round of faux competition, Boeing gave us a contract for $300k to develop the software based on their proprietary high-performance business model. Fortunately the Boeing model was a mixture of Baldrige, lean manufacturing and six sigma thinking. In the end there were over 300 questions organized into 8 functional groups.

Working with a software development firm that was located next door to us in the back offices of Common Angels in Lexington it took less than a year to develop the assessment model and the software to deploy it. Boeing chose three suppliers located in three different states to test out the project. In one they intentionally gathered all of the participants in one room to try to game the assessment. Due to the use of some randomization in the presentation of the questions, they failed. In the end Boeing was very impressed by how accurately the results matched up with their own onsite evaluations. They also felt the improvement recommendations were solid.

While we were finishing this up I spent most of my time developing a generic assessment model that we could sell to other companies. For the most part this meant revising the time frame for the questions to match up with the more common lifecycle of the non-aerospace sector. Only a Boeing has to worry about supporting products like the B52 launched in 1952 and due to still be in service in 2030.

As part of our exit planning Sherry and I realized that ValuEdge would never get to be very big. It’s services are a niche within the supply base management arena within the overall enterprise resource planning software world. So we picked out four companies that were one rung up the ladder from us to be our targets for a sale. One, Emptoris was located nearby and very busy in the auction-centric supply arena. They signed a contract to resell our generic product. In 2004 we sold the company to them. We netted under $100k each which barely covered the lost income from the years of poor pay from ValuEdge during its development phase.

The sale came just in time because Sherry, several months earlier, announced that she couldn’t stand working with me and refused to discuss any mediation, just “I’m done with you”. This can me as a shock to me. To this day I don’t understand what happened.

The exit was cushioned by over a year of very lucrative lean manufacturing consulting work……..

Here are a few sample reports from the Boeing project: