Sourcing Value and Private Label Products: Reboot

September 11th, 2019

With the economy moving the public to lower cost products is it time to review your private label strategy?

 

Today’s post is from our SafeSourcing Archives

Three years ago the Wall Street Journal published an article about how the economy is forcing consumers to consider lower priced stores and goods to save money (Article Link).  Since that time major retailers such as Kroger’s have invested heavily into private label brands that consumers trust as much if not more than the National brands they used to buy.   Just announced in June were three brand new private label store brands from Kroger to bring in quality products at a lower price point.

In today’s blog we will be looking into some new areas of private label sourcing you might not have thought about previously.

Services – One of the areas that companies do not always think of for private label sourcing are services.  Many of these services deal directly with the design and marketing of the private label products themselves helping to develop campaigns for the retailer.  There are other services, however, such as Kosher services and product development services that can also be sourced.

Product Ingredients – In some cases the retailer manufactures or is considering manufacturing their own private label products and the raw materials needed for those products need to be sourced.  Flavorings, chemicals, fragrances, pharmaceutical ingredients and organic ingredients are just some of the items that can be sourced.

Supplies and Equipment – When it comes to private label products there are also unrelated equipment and supplies that are needed in order for the inventory to get to the consumer.  Advertising vehicles, pallets, shelving, signage, coolers and freezers, and doors and curtain systems are just a few of the many types of connected purchases which are necessary in order for private label products to be sold.

Not For Resale – This area of private label spend is growing larger every day as more retailers are beginning to offer food and/or beverages in their stores.  Towels, cups, bags, trays, paper products, and stretch wrap are all additional areas of private label products which can be sourced on a regular basis.

Whatever your private label Sourcing need is, the economy is quickly demanding that companies begin to pay more attention to the mix of products they source for their customers.  For assistance in sourcing these categories for your business, please contact a SafeSourcing Customer Service Representative.  

We look forward to your comments.

A Sourcing Diatribe you should read!

September 11th, 2019

Does your Procurement team really understand why your prices are going up? Or not going down in a significant way?

 

 

Todays post is by Ron Southard, CEO at SafeSourcing Inc.

Here’s the diatribe to tell you why they don’t.

Example: Your finance department in reviewing current costs looks at your waste management costs and discovers that they have gone up significantly over the last two years. They call your Category Manager (if you have one) in order to ask why? The answer they get back is that in discussions with your current vendor, their costs have gone up significantly. Your finance department representative asks for examples. The answer he/she gets, is as follows, “I don’t know, but I’ll reach out and ask”.

Alternative Example: Your finance department in reviewing current costs looks at your waste management costs and discovers that they have gone up significantly over the past two years. They call your Sourcing provider SafeSourcing Inc. (if they are) in order to ask why? The answer they get back is that in discussions with your current vendor, their costs have gone up significantly. Your finance department representative asks SafeSourcing for examples. The answer he/she receives is as follows.

There are several reasons. The first is that 2 years ago the Chinese were the largest importers of recycled materials, specifically plastics and papers. At the time they were importing approximately 15M metric tons. Today they are importing approximately 7M metric tons. This has gone from a revenue producing opportunity for suppliers to a cost. Additionally, there is a shortfall of drivers in the US that has caused demand for their skills to increase accordingly. As a result, all freight hauling focused companies have experienced a shortfall of drivers and an increase in costs for the drivers that they do hire.

Additionally, diesel prices in 2017 were lower than they are today. While these prices have eroded somewhat (about 6%) between 2018 to 2019, they are still not at the low levels they were in 2017. There are additional areas to also consider like new equipment that are also higher based on demand. Now can I provide you with a strategy as to how we (SafeSourcing) can mitigate these costs going forward and maybe even rain them in some?

I know all executives have had these types of frustrating conversations internally as well as with your suppliers. I also know that SafeSourcing regularly provides these types of answers and reviews across hundreds of categories for our customers. It is the precise reason that our average savings across all categories during the last 2 years is greater than 24%.

While the above is a specific example, what can you tell me about your freight costs, supplies costs, commodity costs, construction costs, equipment costs, items for resale costs etc. Probably not as much as SafeSourcing can tell you. Give us a call and find out.

For more information regarding SafeSourcing and how we can help you with your sourcing, or regarding our Risk Free Trial Programplease contact a SafeSourcing Customer Service representative, you’ll be glad you did! We have an entire team ready to assist you today.

We look forward to and appreciate your comments.

Paper Towels vs. Hot Air Blowers

September 10th, 2019

Ever wonder which is a better choice?

 

 

Today’s post is by Gayl Southard, Administrative Consultant at SafeSourcing, Inc.

While traveling this past summer, almost without exception, all the public restrooms I used had hot air blowers instead of paper towels. I wondered which was the better option.

Some of the basic differences are:

    1. Hand dryers create less waste. A big complaint for many companies are paper towels have to be cleaned up, some people flush them creating plumbing expenses, and the cost of the paper towel averages about 1 cent per sheet (the the average person uses 2.5 sheets to dry their hands) compared to .02-1.8 cents of electricity used with a hand dryer.
    2. Hand dryers create much less waste than paper towels. Many companies complain they have to cleanup paper towels that can be all over the floors of restrooms. Someone has to be responsible to bag them, cart them to a dumpster, and then the expense to have to take to them to a landfill. It is easy to see why the hand dryer seems to be the better choice here.
    3. Some people believe a hand dryer just circulates bacteria in the air. A hand dryer should be cleaned every year (and more often if in a heavy use environments) to remove built up dust. A high-speed dryer is better in this regard as the forced air keeps them cleaner. There is a hand dryer that contIns anti-microbial compounds imbedded in the paint and plastic components that minimize bacteria growth.
    4. “A 2012 systematic review found that paper towels dry hands more quickly and more thoroughly than air dryers.”1. Where hygiene is paramount such as hospitals and clinics, paper towels should be recommended.
    5. Air dryers allow only one user at a time. A user can take a full minute to dry their hands. This can lead people to avoid drying their hands. A study revealed some people only took 22.5 seconds to dry their hands, and 41% of people left the washroom drying their hands on their clothing. Wet hands spread bacteria much more effectively than dry hands. The bottom line here is that paper towels dry hand more effectively and people use them more. With a hand dryer, people incompletely dry their hands, or not at all.
    6. If your goal is to reduce your carbon footprint, than air dryers are the way to go. If you want to maximize customer service, most people prefer paper towels. “If, however, your primary goal is hygiene, which is the case in hospitals and other healthcare settings, then paper towels are the current clear winner. They dry hands faster, more completely, and minimize the spread of bacteria to the environment and cross contamination.”2

If you would like more information on how SafeSourcing can help you, please contact a SafeSourcing Customer Service representative.  We have an entire team ready to assist you today.

References……………………………………………………………………………

1 https://www.restroomdirect.com/hand-dryers-vspaper-towels.aspx

2.https://science based medicine.org/air-dryers-vs-paper-towels/

 

 

Disaster Recovery

September 4th, 2019

Dorian and another hurricane season is should make you take a fresh look at your preparedness..................

 

Today’s post is written by Ivy Ray, Account Manager at SafeSourcing Inc.

Dorian reminds us that  hurricane season is still here,  meteorologists indicate there  three more potential storms are lined up right behind her.  There are areas that are still in recovery from the last  several seasons.

We can’t fight the forces of nature, but we can be prepared as we enter the hurricane season.  Safety is the initial concern during a weather disaster, but the residual damages can be far reaching. Whether the damages are resulting from hurricanes, wildfires, earthquakes, tornadoes, or blizzards, it could greatly affect business operations.   An event that disrupts your business could actually put you out of business if you don’t have a plan in place. Your organization may not be directly affected by such an event, but your key suppliers and vendors could be.

A disaster recovery plan is essential to keeping your organization running in the case of a natural disaster. It is a good idea to utilize the National Weather Service’s national preparedness calendar as a guide for year-round reminders to identify potential disasters and review your organization’s disaster recovery plan.

Some questions that an organization should keep in mind are:

  • How will your data be affected?
  • Do you have remote systems in place?
  • Do you have backup vendors?
  • Is there a secure alternate operations site?

Disaster recovery involves a set of policies, tools and procedures to enable the recovery or continuation of vital technology infrastructure and systems following a natural or human-induced disaster.  It’s not enough to have the procedures in place; you need to know what’s in the plans to be able to execute them when the time comes.  Have a plan and be ready for action, but most of all be safe!

For more information on how SafeSourcing can assist you in exploring your procurement solutions for your business 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.

 

References ————————————————————————————–

  1. http://fortune.com/2018/05/14/2018-hurricane-season-forecast-possible-tropical-storm-in-gulf/
  2. https://weather.com/storms/hurricane/news/2018-04-19-2018-hurricane-season-forecast-the-weather-company-ibm-april
  3. https://en.wikipedia.org/wiki/Disaster_recovery

 

Happy Labor Day Weekend

September 2nd, 2019

Let's hope this years crops once harvested don't have a negative impact on the price of goods around the world.

 

Todays post is by Ronald D. Southard, CEO at SafeSourcing Inc.

Do you know how many products are affected by the price of corn?

Here are an easy bakers dozen of the more than hundreds for you to ponder. How do they affect your purchasing? Many of you probably have no idea! The good news is that SafeSourcing can help.

1. Alternative medicine
2. Chemicals
3. Bio-fuel
4. Food
5. Feed
6. Sweeteners
7. Starch
8. Beverage Alcohol
9. Plastics
10. Fabrics
11. Adhesives
12. Fish Bait
13. Herbal Supplements

If you’d like to understand how SafeSourcing takes into account this type of commodity information when sourcing your products, please contact a SafeSourcing customer services account manager.

We look forward to and appreciate your comments.

The Oxford Comma and Proofreading

August 30th, 2019

Learn the real-life importance of proofreading your work.

 

Today’s blog is by Margaret Stewart, Executive Assistant and Director of HR at SafeSourcing

For many of us, our schooling has emphasized the importance of proofreading our written works. This is supposed to eliminate any grammatical and punctuation errors, remove redundant ideas, and help keep a message fluid and comprehensible. Outside of the classroom and into the business world, proofreading should be even more important, but is often rushed or not done at all. This oversight and missing errors in a written work can affect your business, and your pocket.

As some background, the Oxford comma is the last comma used to separate a list of items. While it is often acceptably omitted, omitting it can change the meaning of a sentence. The oxford comma is used in the sentence, “You see two dancers, President Kennedy, and Bob Hope.” Clearly, the meaning of this sentence is that you see two people plus two dancers, for a total of four people. The same sentence, without the Oxford comma, “You see two dancers, President Kennedy and Bob Hope,” implies that you see two dancers, one being President Kennedy, and one being Bob Hope.

The real-life effects of omitting the Oxford comma can have detrimental effects on business. For example, a recent article described how the lack of the Oxford comma left one company to pay millions of dollars in a lawsuit. As the New York Times reported, the lack of the Oxford comma in one of Oakhurst Dairy’s contracts forced the company to pay $10 million for overtime it wasn’t expecting to pay.

While this is just one example, this situation demonstrates why proofreading is more important than ever, especially in business. Simple typing errors, misspelled words, incorrect grammar, and unclear language can leave customers and clients wondering about the quality of a business. On the other hand, clear, well-written, and informative language can bring in customers and clients.

For more information on SafeSourcing and how we can help you with your contracts, or on our Risk Free trial program, please contact a SafeSourcing Customer Service representative. We have an entire team ready to assist you today.

 

 

 

Fleet Management Services, what values do they offer?

August 29th, 2019

How can companies benefit from using Fleet Management Services?

 

Today’s post is from our SafeSourcing Archives

How can companies benefit from using Fleet Management Services?

Fleet Service companies provide turnkey solutions for fleets.  Typically they provide solutions for Asset Management, Operating Cost Management and Risk Management.  Please see the details on services below.

Asset Management:

1. Title and Registration Services
2. Vehicle financing, acquisition, delivery
3. Used vehicle marketing
4. Violation Management

Operating Cost Management:

1. Fuel Expense Management
2. Telematics
3. Managed Fleet Maintenance
4. Vehicle expense management
5. Fleet management outsourcing

Risk Management:

1. Motor vehicle records and vehicle monitoring
2. Vehicle accident management
3. Safety Services

Fleet Service companies can help identify savings and improve fleet productivity.  In addition, they maximize your company’s fleet investment by benchmarking your fleet against the industry.  They also can recommend specific steps to improve fleet effectiveness.

For more information on how SafeSourcing can help your Purchasing Department evaluate Fleet Services please contact a SafeSourcing Customer Service Representative.  We have an entire customer services team waiting to assist you today.

We look forward to and appreciate your comments

Overcoming Cognitive Dissonance in Purchasing

August 28th, 2019

Concepts for engaging decision makers!

 

Today’s post is  from our Archives  at SafeSourcing

Cognitive Dissonance is the state of having a set of beliefs, attitudes, and ideas, and being faced with information that conflicts with those concepts. Leon Festinger’s Cognitive Dissonance theory holds that all people attempt to keep all of their beliefs, attitudes, and information in harmony. The problem that often comes up, however, is that we sometimes unconsciously suppress or modify correct information in order to avoid having that information conflict with what we already believe.

An example of this in purchasing would be when a procurement decision is made, and the project turns out badly. Often times the decision will be defended and even REPEATED, rather than the decision maker admitting fault. Why? Because most people automatically feel they need to defend their decisions in order to preserve what they believe about themselves. If you believe you are a great decision maker, you will look for information that supports that belief, and avoid information that conflicts with that belief. Here are a couple of ways to help avoid pitfalls on both sides of the purchase:

The Enthymeme

An Enthymeme is a truncated form of syllogism, where a premise or conclusion is left out of the argument. It is always easier to let someone convince themselves of something than it ever will be for you to, even if your audience’ belief is fallacious. When we pose a logical argument, but don’t explicitly state the conclusion, we allow our audience to extrapolate on their own instead of risking putting them on the defensive because we are demanding they believe what we are advocating. Example; “XYZ Company isn’t certified and the manufacturing process requires certification”. This type of statement can be much more effective than shooting straight for the conclusion “Don’t go with XYZ Company.”

The Ben Franklin Effect

When we do a favor for someone, we tend to justify our actions to ourselves that we did the favor BECAUSE we liked them. We naturally tend to avoid Cognitive Dissonance by changing other beliefs, in favor of holding onto beliefs we have about ourselves. Be on the lookout for people who would use this concept against you; how often have you heard a sales pitch that starts off by asking you for a small favor? It’s a commonly used tactic to use your beliefs against you in order to obtain something the sales-person wants.

For more information on how SafeSourcing can assist your team this process 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.

What are my Internet connection options?

August 23rd, 2019

The most common have been DSL, Cable and Fiber Optics. But things are always changing.

 

Today’s post is by Troy Lowe; Vice President of Development at SafeSourcing.

When looking for an Internet connection solution, there are several types of connections available. The most common are DSL, Cable and Fiber Optics.

DSL(Digital Subscriber Line) uses telephone cable to transmit data. When using DSL you have a dedicated connection that is not shared with others within your area. The speed is, however, affected by the distance between your location and the location of your Internet Service Provider(ISP). There are two types of DSL connections, asymmetric and symmetric. Asymmetric uses the phone line to connect to the internet and still allows you to use the same phone line to make phone calls. Because of this design, the upload speeds are slower than the download speeds. Symmetric also uses the phone line for the connection but uses both parts of the phone line for its connection. This allows for increased upload speeds, but the line cannot be used for incoming or outgoing phone communication.

Cable uses coax cable to transfer data. Cable is generally faster than DSL, but it is not dedicated so you are sharing bandwidth with others in your area. So there may be peak times during the day when the connection is slower because of the amount of usage within your area. Since most of the internet usage is used for downloading, cable is designed to give priority to downloading and upload speeds are much slower. If you are planning to upload a lot of data then you may want to consider DSL or Fiber for your solution.

Fiber Optics, which is the future for transmitting data, uses optical fibers to transfer data. Instead of using electricity and metal cables it uses light and glass to transmit the data. Because of this, it offers faster speeds because of its ability to move large amounts of data over great distances. Along with DSL, Fiber is a dedicated connection and not shared with others in your area so your speed will not be affected by other users. One downside to this technology is that is new and expensive to install so it may not be available in your area.

While much of this information is pretty basic, SafeSourcing can help with any of your more detailed network sourcing at rates well below what you might negotiate on your own.

If you would like some help finding the right Internet solution, we can gather all the necessary information for you and help you decide which one will meet your needs. If you would like more information on how SafeSourcing can help you, please contact a SafeSourcing Customer Service Representative. We have an entire team ready to assist you today.

 

 

The components of information

August 22nd, 2019

Avoid communication mistakes through negative entropy!

 

 

Today’s post is from our SafeSourcing Archives

Communication is a funny thing. We communicate day in and day out, most of the time successfully, but it’s easy to think of examples where our message has not be received as intended, or we just weren’t able to pick up what someone else was trying to communicate to us. Much of the time, we find that the fundamental issue in miscommunication is that the message giver and the message receiver have different understandings of the concepts being traded back and forth. For example, one person’s idea of “love” looks completely different from someone raised in a family that expressed love in a totally different way. Another simple example could be if you’re sent to the grocery store with instructions to get “apples”. In your mind, when you hear the word “apple” you have a picture of a Honey Crisp apple, but the person who sent the request has an image in their mind of green Granny Smith apples. All communication is based on templates stored in our minds, on hard drives, on documents, etc. And if we don’t understand what information IS, we’re bound to make mistakes in how we trade it with others in our professional lives.

Information, generally speaking, is a representation of other objects stored within a physical medium. All information is stored in physical objects, such as hard drives, CD’s, brain cells, etc. The higher fidelity of information is stored, the more accurately it represents the object of its focus. For instance, a picture of a widget in low definition, and vague description in a specifications sheet, won’t represent that widget as well as a high definition picture, with several pages of precise descriptors. Similarly, a cell phone recording of a symphony won’t represent the event as well as an IMAX recording would. But the IMAX data will be potentially thousands of times larger, because it takes larger physical space, to record information at higher fidelity. This is because the more possibilities your information CAN’T represent, the more detailed it has to be and the more likely it can only represent what you intend it to.

In the Information Theory context, entropy can be defined as the delta of change from order, to disorder/randomness. Information entropy is the average information of all possible outcomes. In other words, information is most precise, when it disqualifies EVERY possibility other than the very specific one it is trying to represent. If the information you are sending could mean any one of a dozen things, you are bound to have some unavoidable margin of error in communicating to your audience. The tricky thing though, is there’s a tradeoff.

The greater fidelity the information is, more precise your communication will be. However, this increases the size of the information content, making it more difficult to manage, decode, or asses. The tradeoff is that the more precise the information, the more difficult to use. How this translates into procurement specifically, is that there will always be some margin of ambiguity in any specifications document. However, that doesn’t mean an RFP can’t be flexible enough to meet a buyer’s needs. Here are a few ways procurement professionals can make sure their documentation avoids falling into some of the common communication pitfalls inherent to the transfer of information:

  • Identify the most important attributes, and focus your specifications on those. For instance, perhaps the business goal of the purchase doesn’t depend at all on color, or pack size, or the availability of support staff. Keep the more detailed information limited to the important attributes.
  • Add flexibility to your bid for consideration of equivalent products. Sometimes being too specific means that a vendor who may have a superior product to offer, isn’t able to propose his alternative if a specification calls for an exact match to a lesser product.
  • Ask yourself “would something I wouldn’t want qualify under the specifications I’m creating?” Remember, information should guide your audience to a specific concept, and disqualify all other possible concepts, as much as is possible without overburdening your audience.

For more information on how SafeSourcing can assist your team with this process 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.