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Dad Wasn’t Wrong About Too Much!

June 17th, 2013

How are you using the advice from dad to your advantage as a procurement professional?

Today’s post is by Mark Davis; Sr. Vice President and COO at SafeSourcing.
For many more reasons than I could possibly go into in this short blog, this Father’s Day has been a very special one for me.  I have so many reasons to celebrate as I watch the U.S. Open and spend spectacular time with my family and my dad via Skype (how times have changed!).  As I reflect on this day it makes me think of all the advice that fathers, mine and millions of others, have given their children over the years and how simple the ideas are and yet at the same time how powerfully applicable to the business world we all live in every day.

In today’s post I want to go back to some of that advice and see how much value still stands in concepts that are so simple.

Treat people as you expect to be treated – The procurement space can be brutal.  Suppliers are trying to deliver value and make money; customers are trying to get as much value as possible while controlling costs.  These two things can often create clashes and tension as both sides work to get the things they want out of a business relationship.  The key that comes here is to remember that the same suppliers you are beating up on price will be the same ones you are asking for rush service and special assistance on down the road.  Creating partnerships with the best value and cost is the goal.  Everyone is a supplier and everyone is a customer at some level and applying this simple advice can help forge the greatest value for your company.

When you know you are right it’s ok to stand your ground – The process of procuring goods is not a new one, in fact evidence of tracking supplies and services dates back as far as ancient Egypt as scribes would record orders taken and those fulfilled on papyrus rolls.  With such a long history it is no wonder that certain ideas and processes have developed that continue to show up even today.  As the world changes, and tools change, processes change, and capabilities improve, this fatherly advice has never been so applicable.  Many misconceptions from the past about how to source goods, what could and couldn’t be sourced and how to deal with vendors have evolved into new possibilities.  Knowing your category, industry and vendors is the foundation to build your projects on.  Sometimes these projects will go against normal approaches but if you have done your homework and believe your strategy is sound, stand your ground and fight for what you believe is best for your company even if your suppliers or internal customers grumble about the change.

Plan your work; work your plan -  I have heard this advice over the years from many people I have admired and respected.  It is simple and encompasses everything that best sourcing projects need in two pieces.  1.  Plan the work (create the project); this involves research and a knowledge of what you are going after that goes beyond a 15 minute Google search.  It means researching the market, indexes, new technologies and trends, new suppliers and new government regulations that may affect your goals.   Knowing your category allows you to plan the work with measureable milestones teams can follow and be a part of.  2.  Work the Plan you have created with little exception.  Once you have created the plan for the project, stick to the timelines and employ leverage where you need it to keep projects moving.  Everyone is always going to be overloaded with work, so if you are not the one working your plan every day you will be replaced in our people’s priorities by someone else who is.

Don’t spit in the wind and don’t take any wooden nickels -  I will be honest, I have no frame of reference by which to link these sage pieces of advice back to the world of procurement, but they both always seemed like really good ideas.

We, at SafeSourcing, hope your Father’s Day was full of great memories and happy times!  We enjoy bringing this blog to you every week and hope you find value in it.   For more information on how we can help you with your procurement needs or on our “Risk Free” trial program, please contact a SafeSourcing Customer Service Representative.  We have an entire customer services team waiting to assist you today.

We look forward to your comments.

Posted in Uncategorized | No Comments »

Does your company buy name brand printer ink?

June 14th, 2013

Remanufactured printer ink looks the same, prints the same, and even has the same quality!

Today’s post is from Sarah Kouse a project manager at SafeSourcing.

If you are buying name brand ink (HP, Epson, Canon, etc.) for your printer when you run out, you may be spending a significant more than if you were to purchase an “off-brand” or remanufactured printer ink.

Remanufactured printer ink looks the same, prints the same, and even has the same quality, but could potentially save your company a significant amount of money if you switched from the name brand ink, and if your spend is large enough it might event get your current supplier to lower your name brand product in order to keep your business. This of course depends which product they make the most margin on.

By way of a recent example, a black ink cartridge for an HP Officejet printer that goes for around $40, you could get a combo pack set of remanufactured ink, including all of the colors (Black, Cyan, Magenta, and Yellow) for around $30. That’s about $7.50 per cartridge and 25% below your current price. If you were buying just black ink, you could purchase 5 times the amount of remanufactured black ink for the price of one single name brand cartridge. Obviously the results may differ based on volume.

The savings generated by switching to remanufactured ink can be significant, especially based on the amount of printing most companies do.

If you’d like to learn how we can help your reduce your printing costs, contact a SafeSourcing Customer Service Representative.

We look forward to and appreciate your comments.

Posted in Business Sourcing | No Comments »

Procurement can help your company beat the averages!

June 13th, 2013

Profits being profits, they still boil down to revenue minus expenses.

Today’s post is from Steve Schwerin an account manager at SafeSourcing.

When you see a chart, often times the lines it contains represent some sort of average.   A chart in an article in the Daily Chart section of Economist.com titled, “Taxing for some” illustrates how procurement fits into where companies place in these averages.  The article is specifically about how corporate taxes have plummeted since the 1950s.  No, the author does not mention procurement, but what is great about charts like this is that they can mean so many things depending upon what the author wants to highlight.

Here, the author is trying to highlight that corporate tax rates have plummeted, insinuating that this is somehow a negative phenomenon.  The chart indeed does show that as a percent of GDP, corporate tax rates have dropped since the mid-50s.  What is really interesting to me in this situation is a second line above the corporate tax line.  It shows corporate profits as percentage of GDP.  Here profits hover above 10 percent in the mid-50s and are peeking over 12 percent today.  The years in the middle, however, show a bunch of zigzagging with a bottom of around 6 percent.

Being an average, the chart line represents both companies whose profits were above the line and those whose were below the line.  Why did some fall above that specific point and some fall below?  Certainly, there are innumerable factors.  I just have to ask myself what role procurement played.  Even back then, I have to believe that some companies were good at procurement and others were not so good.  This article does not tell us why some companies were above the line and why some were below it, but procurement was certainly a factor.  Profits being profits, they boil down to revenue minus expenses.  I have to wonder how many of the companies who were bringing the line up in the 50s were doing so partially because a savvy procurement department kept expenses in line with the current costs of goods and services at the time.  That being said, is your company above or below the line in today’s economy?  Regardless of if you find yourself in the 50s, the 70s or the 2010s, you can always strive to do things better? 

If you’d like to keep your expenses in check, please contact a SafeSourcing Customer Services Account Manager. 

We look forward to and appreciate your comments

Posted in Procurement Purchasing, Procurement Tool | No Comments »

Suppliers, Toot Your Horn! Customers, Let them! Part II of II

June 11th, 2013

In a world that focuses on cost how do you know what value adds your vendors are giving you if you don’t encourage them to tell you?

Today’s post is by Mark Davis; Sr. Vice President and COO at SafeSourcing.

One of the biggest gripes that suppliers have about procurement departments and Strategic Sourcing partners they work with is that they only care about getting the lowest cost and nothing about the value of what they are currently or can bring to the table.  Unfortunately there has been a precedent set by the procurement and “reverse auction” companies that has rightfully created this gripe in many suppliers.

Yesterday we began talking about the VALUE of FREE and how suppliers need to do a better job of tracking this for their customers and reporting on it on a regular basis so that improvements can be seen and, if necessary, changes in process can be made.  As we continue today we will wrap up by touching on a few additional areas suppliers need to keep in mind when working with their customers and the reasons why customers need to encourage their good vendors to do this.

Measure the results – As suppliers/vendors it is your job to keep track of the progress you are making.  Do not assume that your customer is keeping track of the money you may be saving or the on-time delivery or the quality of product or the quick resolution of issues.  It is your duty to ensure that you measure your success with that customer.  Logistics companies: make sure you track the time between order to pickup to delivery.  Service companies: be working on the ever important ROI on the very first day you begin working with your customer.  Manufacturers: track the lead time for every item ordered by your customer and where possible, show where you have improved it.   Never assume that your customers are tracking what you do for them but ALWAYS assume that eventually someone is going to ask what value you are bringing to them to justify your cost.

Track the extra and Toot the Horn -  Right on the heels of tracking your results is making sure you record the little extras you bring to your customers.  Whether you create extra reports, or visit the customer’s site to meet with their team, or you keep your staff over the weekend to assist with a critical issue, record everything and do not ever be afraid to toot your own horn to your customers to remind them of the extra effort they are getting from you.  They may not realize what you have done and in time without you telling them they will come to expect it as part of the package and you will find yourself continuing to do more work for the same price. 

On the flip side, customers tell us all the time that they don’t want procurement involved because their relationships are too important.  Our response it always the same, “Great!  Let us help you quantify what your incumbent is doing for you today so that we can compare that to what the market is doing for other companies.”  Encourage your suppliers to record the extra things they do for you otherwise someone sitting in a very important office somewhere in your company is going to see that Company X is charging you $10 per widget when they know very well from their last job that Company Z only charges $8.  Without documentation of the extras (with some measurable value attached) you will likely find Company Z and their $8 widgets as your new vendor and Company X out the door.

At SafeSourcing we are constantly talking to our suppliers and customers about the importance of value and that while cost cannot be ignored, the overall value is what are trying to pinpoint in the projects we run.  The only way to accurately do that is to understand the “extras” a supplier can bring or is currently bringing to the table and attaching value to that.  Only in this way can a true decision that is best for the customer truly be made.  For more information on how we can help you evaluate your current or future suppliers and the value they can bring you or on our “Risk Free” trial program, please contact a SafeSourcing Customer Service Representative.  We have an entire customer services team waiting to assist you today.

We look forward to your comments.

Posted in B2b Supply Chain, Supply Chain Procurement | No Comments »

Suppliers, Toot Your Horn! Customers, Let them! Part I of II

June 10th, 2013

In a world that focuses on cost how do you know what value adds your vendors are giving you if you don’t encourage them to tell you?

Today’s post is by Mark Davis; Sr. Vice President and COO at SafeSourcing.

One of the biggest gripes that suppliers have about procurement departments and Strategic Sourcing partners they work with is that they only care about getting the lowest cost and nothing about the value of what they are currently or can bring to the table.  Unfortunately there has been a precedent set by the procurement and “reverse auction” companies that has rightfully created this gripe in many suppliers.

Not every strategic sourcing company nor every procurement department sees things like this.  Many want to evaluate everything; the extra services suppliers can bring them, the rush orders at no charge, the extra reporting that is given at 10:00pm on a Friday night, the waived fees, and of course they also want to look at price.  The problem that procurement teams face is that when all they are given by an internal owner or from the suppliers themselves is list of prices and a brochure it makes it very difficult to justify paying 15% more for company A when they appear (through prices and a pamphlet) to offer the same service or product as Company B.

Today’s post is for suppliers and their customers alike because it cuts through the “price is all that matters” conversation to get straight at what matters: value.  Suppliers need to be responsible for proving it and attaching monetary value to it and customers need to put more controls in place to ensure they get it.

The Value of Free – In a  recent post we talked about the cost of FREE.  Today we are talking about the VALUE of FREE.  Every Christmas the newspapers double in size as retailers fight for consumer attention.  When the same exact television is offered by two different retailers for the exact same price a decision must be made and when the consumer sees that one retailer is offering an extended warranty as part of the price the decision becomes easier because there is something free included, but that free has value to the consumer.   Business procurement is no different.  If two companies have the same price for their plastic bags or even if one company is slightly higher but offers to ship directly to your stores and the other will ship just to a distribution center where additional costs to go to the stores are incurred, there is a measureable value to that free service.  What may have been a higher cost for bags is now a lower total cost of ownership because you just dropped your costs to ship the bags to the stores.

At SafeSourcing we are constantly talking to our suppliers and customers about the importance of value and that while cost cannot be ignored, the overall value is what are trying to pinpoint in the projects we run.  The only way to accurately do that is to understand the “extras” a supplier can bring or is currently bringing to the table and attaching value to that.  Only in this way can a true decision that is best for the customer truly be made.  Tomorrow we will take a deeper look into the other ways value can be established.  For more information on how we can help you evaluate your current or future suppliers and the value they can bring you or on our “Risk Free” trial program, please Contact a SafeSourcing Customer Service Representative.  We have an entire customer services team waiting to assist you today.

We look forward to your comments.

Posted in Retail Supply Chain, Supply Chain Procurement | No Comments »

Thanks WALL STREET JOURNAL! The best job in the world is that of a Supply Chain Professional!

June 7th, 2013

Where else can you touch so many differant areas of a business or learn about so many different subjects?

Today’s post is from Ron Southard, CEO at SafeSourcing!

I have harped on this subject for years. The other top bloggers in our space have as well. The simple fact is that companies that have their entire procure to pay supply chain in order and modernized will be far more successful today and in the future than companies that don’t.

These companies for the most part have up to date clean and accurate data to act upon. They have that data upon demand and  their entire organization can turn on a dime based on that data when and if they need to. I cannot even begin to tell you the number of categories we have sourced for our business partners from Legal services to Band-Aids in the Retail, Energy, Manufacturing, Agriculture, Healthcare and other industries. We have sourced entire products from commodity to finished good. When individuals  do this type of work, their knowledge base  as to how the world works increases exponentially, the subjects they can discuss are endless and they become  more interesting individuals to interact with and be around.

However, you don’t need to just listen to me, and I almost fell off my chair when I saw this article in today’s issue of THE WALL STREET JOURNAL. The article is titled Hot New MBA: Supply Chain Management by Melissa Korn.  The article reviews what many of us have known for a long time. This is an interesting, ever changing, technology driven field that requires our best and brightest. But don’t believe me, read the article.

If you’d like to speak to one of our well informed and interesting associates about your sourcing needs, please contact a SafeSourcing customer services representative.

We look forward to and appreciate your comments.

Posted in B2b Supply Chain, Supply Chain Procurement | No Comments »

How Much Does FREE Cost? Simple Question right?

June 6th, 2013

Be careful when your service provider tells you that something is free. And read your contract!

Today’s post is from Michelle Hayre an account manager at SafeSourcing.

The byline to this post would seem simple but the number of large companies that are taken in by it is staggering.

My brother dropped his phone and to no surprise the screen was cracked. He took it into his wireless provider and without insurance he would have to buy a new phone. A new phone? That sounds great! Right? Well he did not have an upgrade available and without insurance he would have to buy the phone at “full retail price”.

The phone that cost him ZERO dollars when he signed a two-year contract was $349.99! I understand that the contract gets you a better deal, but how do wireless providers make a profit when they are just “giving away” phones. 

Wireless providers subsidize the cost of your phone into your wireless plan. They have to pay the manufacturer for these phones, but take such a large hit initially in the contract. It takes wireless providers an average of at least six months to begin making a profit on your wireless contract. Makes you wonder how low your service contract could be a month if you paid “full retail” price for your phone.

Many companies have used the word ‘FREE’ to sell a product or service, but are they really free? If you did not accept the free or significantly low cost coffee maker for the office would the year supply of coffee be cheaper? There is a cost for free and that cost usually falls back on the customer or consumer.

SafeSourcing, Inc. has the knowledge and expertise to eliminate the cost of ‘free’ from your service related plans.  If you’d like more information on how avoid the free pitfall, please contact a SafeSourcing customer services representative.

Be careful out there or you might just get what you have not asked for.

We look forward to hearing from you.

Posted in Business Sourcing, Contract Management | No Comments »

You call that “Customer Service”?

June 5th, 2013

There’s no doubt you've been on the receiving end of lousy/bad customer service a time or two!

Today’s post is from our newest customer services manager Dennis Nicoletti

Today’s post is by Dennis Nicoletti, Manager of Customer Service at SafeSourcing. Dennis wants to know if you’ve ever been told “I am sorry, but there is nothing else I can do.” 

There’s no doubt you’ve been on the receiving end of lousy/bad customer service a time or two. You’ve come to a company with questions only to be told by a monotone voice to press this or click that until you arrive once again to your starting place with no help at all. Or worse, you’ve reached some uncaring CSR (Customer Service Representative) who calls you by name but delivers nothing to address your concerns or answers your question(s) satisfactory.
Back in the day…you were raised with basic good manners and along the way ever joined a service group, like the scouts or 4-H (do you remember?), then you’ve got the groundwork for providing excellent customer service. The foundation you need is one of courtesy, caring and an attitude that lets your customers know that you they matter-and that you care. There are skills and technologies that can help you put it all into practice.

Making the most of every opportunity – Whatever your company does, no matter how you do it, you make a promise to each and every customer that darkens your door. The consumer pays you something, and you promise to provide a product or a service. There are multiple pledges of benefits and quickness. Customer service involves living up to your word on these matters, but it really shines when something goes wrong.

The table has turned – Now you find yourself on other side of the equation. You own a business or you manage a department and you want your customers to be happy, to come back for more products or services, and even more importantly; tell others great things about your company. So what should you do?

Mistakes are opportunities — An unhappy customer will become a loyal consumer if you fix his/her complaint and do it quickly. Eighty percent (80%) of these folks will come back to you if you’ve treated them fairly. That percentage rises even higher if you respond immediately.

Aligned Sales and Service Departments – At SafeSourcing we created the framework for our company to keep sales and service closely tied together. Each department shares in the goal of excellent customer service. Authority to resolve problems is what people need to keep customers happy.

If you’re procurement team is searching for the right company to treat you with great importance while helping you to reduce costs, you need not go any further. We at SafeSourcing are committed to helping our customers and can assist you by explaining our strategies for assisting departments that historically have not wanted outside “help.”  For more information on these strategies or on our “Risk Free” trial program, please contact a SafeSourcing Customer Service Representative.  We have an entire customer services team waiting to assist you today.  We look forward to your comments. 

We look forward to and appreciate your comments

Posted in E-procurement | No Comments »

Multi-tasking, or just task switching?

June 4th, 2013

“Switching Costs” is a familiar term in the world of business economics!

Today’s post is from Michael Figueroa an account manager at SafeSourcing.

“Switching Costs” is a familiar term in the world of business economics, but now the term is being applied to personal tasking and efficiency. In almost any office environment, the ability to multi-task is seen as a standard requirement for any job, but the term itself is misleading. The way we perform activities is much more akin to task-switching than to performing multiple tasks simultaneously.

Most of us are incapable of talking on the phone while writing an email on a completely different topic at all, and those of us who can do both simultaneously will experience an extreme decrease in quality of performance in both tasks. What we really do when we “multi-task” is switch from one activity to another in rapid succession.  Just like we incur switching costs in efficiency when we switch our production parameters or a miscellaneous service provider, the brain will lose some of our processing capacity as it switches gears to deal with each new interruption.  A recent study done at Carnegie Mellon University tested the performance of participants completing manual computer related tasks when they were switching from one activity to another. In every case, the performance of the participants decreased with every unexpected change of task. The best performing participants however, were the ones that expected to be interrupted and were not, outperforming even the control group. But how can we use this idiosyncrasy of the brain to our advantage?

Anyone familiar with Parkinson’s Law understands the theory that “Work expands so as to fill the time available for its completion”. However, what if the inverse was true? What if the less time we thought we had to complete our work, the smaller an increment we would use to complete it?

Slice up your tasks into manageable segments instead of dealing with every interruption immediately. For instance, don’t stop what you are doing immediately for every new email that arrives. Instead, set up an alert so that you only immediately respond to emergency messages, and set aside a ½ hour twice a day or however often is needed for only responding to emails. Minimize the number of times you have to task-switch during the day so that you can give your undivided attention and best performance to one activity at a time. Schedule your activities with flexibility for emergencies and your workday surprises will fit into your expectations of the day, where your brain will already have the framework in mind to deal with it.

At SafeSourcing we understand how many inputs you receive in your daily procurement related activities. Let us simplify the process by segmenting the flood of information you receive every day and help you find the best strategic fit for your sourcing needs.

We look forward to and appreciate your comments.

Posted in Sourcing Strategy | No Comments »

Taking a look at IT Field Services

June 3rd, 2013

As the IT world continues to change, what role could outsourced IT field services play for your company?

Today’s post is by Mark Davis; Sr. Vice President and COO at SafeSourcing. Mark asks

There are a number of trends occurring in the support of IT products and processes today, not the least of which are the trends of increasing expansion of business through acquisition and the decreasing number of qualified resources with experience necessary to perform the tasks a company needs.  When you couple these two trends with the trend of employees having shorter and shorter stays working for a company, it is no wonder companies are looking to outsourced IT break fix and managed services to provide a backup to their existing staffs.

In today’s blog we will be looking at a few of the points to keep in mind as you explore this area of managed services for your company; looking at your current landscape, the questions you should be asking about where you want to head as an organization and the methods you can use to evaluate the vendors against your eventual goals.

Current Landscape – As with any project, understanding where you want to go starts with understanding where you came from and more importantly, where you are now.  With acquisitions and growth happening in so many industries it becomes a challenge to support new infrastructures and IT equipment that the existing staff may have no familiarity with.  This is especially true in the retail industry where new acquisitions can mean new Loss Prevention equipment, new scanners, new Point-of-sale equipment and software.  Geographic expansion can also create difficulties as recruiting and managing your own IT resources requires looking at areas the company may have less knowledge.  Outsourced field service companies can be a great addition to assist in bridging the gap of new equipment experience or geographical coverage on either a temporary or permanent basis.

Create the Project – How you know where your company is currently, the next step is to determine how the outsourced supplier will be used by your organization.  In the case of expansion this may be filling geographical needs that your current staff cannot support or it could mean providing a temporary knowledge bridge of unfamiliar equipment until your own staff can be brought up to speed or the equipment can be standardized to something more familiar.  Some of the things that will need to be determined with your organization are:
•   Pricing – Generally there will be a “per incident” or monthly flat fee offering.
•   Flow of support for issues from your employees to the supplier
•   The purpose of the managed provider – Staff augmentation (temporary or permanent) or special projects.
•   The services you will be expecting them to perform.

Evaluate the Suppliers -  Once you have determined your current needs and the plan for how best to fill them it is time to evaluate the suppliers who can help you.  Depending on the level of service you have details for; this may begin as a Request for Information, gathering general information about what each supplier can offer and who they are working with today as well as their preferred pricing model.  If the scope of service is well-determined moving right into a Request for Proposal would be the first step.  Locations, detailed service expectations and equipment count are all important pieces that would be needed for suppliers to provide you with accurate pricing.  Once this has been collected and a Statement of Work and pricing model have been established based on the RFP responses the final stage would be a Request for Quote or Tender, requiring all invited participants to provide pricing in the model you have requested. 

Outsourced Managed Services are becoming commonplace in how we do business and will continue to do business in the future especially for National companies how need services across a large portion or all of the country.  Maintaining your IT equipment is one of the fastest growing managed service industries and can be used affectively once your goals have been established for their use.  For more information on how we can help you evaluate suppliers against these goals or on our “Risk Free” trial program, please contact a SafeSourcing Customer Service Representative.  We have an entire customer services team waiting to assist you today.

We look forward to your comments.

Posted in Business Sourcing | No Comments »

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