September 3rd, 2010
During my recent travels on customer business a passenger in the seat next to me asked what I was reading.
We’ve all known for a while that our seat partners look over our shoulders to see who we are and what we do. I told him I was reading an Aberdeen business brief and who and what they do. I went on to explain that our company was focused on e-procurement tools for the retailers. He introduced him self as a private business owner with his two brothers and that he had experience biding in reverse auctions with Ariba and Free Markets.
We discussed SafeSourcing’s offerings and ultimately came around to what made e-procurement events successful for his company in the past as a prospective supplier and what would encourage them to participate again even if they did not happen to be awarded the business in a particular event. His take was that this was initially an educational process for their company and ultimately would become a way to do old things in a new way. He also suggested the following
1. Openly communicate with prospective suppliers
2. Make sure they understand everything and comfortable
3. Make sure they have no open questions.
With that as an understanding I offer the following list of sample questions one might consider when inviting a supplier as a new participant.
1. Does the supplier understand that there is no cost to them to participate?
2. Do they understand they will be trained at know charge?
3. Do they understand event timing and requirements?
4. Does the supplier understand the terms being used and how they apply to an e-procurement event such as? In fact, do they understand what a reverse or forward auction is?
a. Reserve Price
b. Proxy Volumes
c. Low Quote
d. Proxy quote
e. Funds
f. Terms
g. Notes
h. Extensions
i. Matching quotes
j. Event rules
k. Product specifications
l. Samples
m. Award of business
At the heart of it, it comes down to something we all know but don’t always practice and as such negatively impacts the sustainability of processes that just make good sense. And that is that the supplier is your customer too and the customer comes first and should be treated the way you would like to be treated.
We look forward to and appreciate your comments.
Posted in B2b Reverse Auction, B2b Supply Chain, E-procurement, E-procurement Solutions, E-procurement Tools, E-supply Chain, Retail Supply Chain, Reverse Auction Procurement, Strategic Sourcing | No Comments »
September 2nd, 2010
It really depends on who you ask and what you are asking them and in too many cases the answer is driven by what someone wants to sell you.
I was reading a blog post from the Doctor over at Sourcing Innovation today titled “A Hitchhiker’s Guide to e-Procurement: Terminology” and I thought it was great as well as very timely.
Ultimately it is up to practitioners and solution providers of these tools to educate their customers as to what the proper terms are for the tools they are using. As an example E-RFI, E-RFP, E-RFQ. I have numbers of customers that have used other solution providers and not only are the definitions different by customer; they are actually different within a specific company. In some cases everything is referred to as a reverse auction and in other situations the companies have made up their own name for the service or tool.
This author uses Wikipedia and Wictionary quite often as a source and in this case, they have a very good definition that covers most of the terminology in the entire e-procurement space as well as related B2B and B2C internet based or private network based functions. As your company moves in the direction of a computerized supply chain management solution for your company understanding what you are asking for and what you are using will make both your job and that of your solution provider easier.
We look forward to and appreciate your comments.
Posted in B2b Reverse Auction, B2b Supply Chain, E-procurement, E-procurement Solutions, E-procurement Tools, E-supply Chain, Eprocurement Auction, Online Procurement, Online Reverse Auction, Procurement Auctioning, Procurement Outsourcing, Procurement Purchasing, Procurement Solutions, Procurement Tool, Product Procurement, Reverse Auction, Reverse Auction Procurement, Supply Chain Procurement | No Comments »
September 1st, 2010
It will only be a matter of time before your CEO tells you to come to him or her with a plan as to how your procurement organization will support sustainability and the environment.
A recent survey by UN Global Compact and Accenture releases findings of largest CEO research study on corporate sustainability. According to this survey Chief Executives believe overwhelmingly that Sustainability has become critical to their success, and could be fully embedded into core business within ten years.
According to the survey CEO’s also believe that companies will need to meet the conditions listed below.
1. Shaping consumer tastes in order to build a stronger market for sustainable products.
2. Training management, employees and the next generation of leaders to deal with sustainability issues.
3. Communicating with investors to create a better understanding of the impact of sustainability.
4. Measuring performance on sustainability – and explaining the value of business in society.
5. Working with governments to shape clearer regulation and create a level playing field.
As a procurement leader what can you do in order to be prepared for those questions that may be coming to your desk tomorrow?
1. Stay educated by seeking sources that offer readily available and fresh content on procurement related sustainability developments.
2. Make sure that your procurement solution providers are also focused on sustainability.
3. Ask your procurement solution providers what their environmental support plans are and how to include them in your procurement business plan.
4. Ask your procurement solution providers what their product safety plans are and how to include them n your procurement business plan.
5. Ask your procurement solution providers what training programs they can offer to your company in order to educate your associates.
We look forward to and appreciate your comments.
Posted in Global E-procurement, Green eProcurement Practices, Procurement Solutions, Sourcing Strategy, Supply Chain Procurement | No Comments »
August 31st, 2010
f everyone did their jobs we would not have as many product and food safety problems as we do. That is if the government could figure out how many workers it took to do their job.
This author offered the following post during September of 2008. The Food and Drug Administration fills 1300 positions. Are consumers safer?” If we were to answer that question today based on the most recent egg recall the answer would be obviously not.
So, I’m reading the Arizona Republic this past Saturday the 28th of August and come across the following article by Mary Clare Jalonick of the Associated Press. FDA to look at egg farms. The sub title was Official: Recall spurring action. You have to be kidding me. The article goes on to say that the Obama administration official says that inspectors will visit 600 large egg farms responsible for production of up to 80% of the nation’s eggs. This should be accomplished by the end of next year. Yes we mean the end of 2012. Snicker ;-(. Well I guess we are safer now.
The question this all begs is what won’t we be looking at while we are so focused on eggs. If we were really concerned, why would we not hire a bunch of new inspectors between now and the end of September of this year and train the during October of this year and then finish the project by the end of this year.. This author bets that you could find enough qualified job seekers to fill and carry out this task. I mean they are going to be following a check list relative to things like refrigeration, sanitation and standard practices. This is not brain surgery.
Hindsight is supposed to always be 20/20. If we visit wiki answers, the statement is defined as meaning that you can look in the past (hindsight) and see what you did wrong. Perfect vision is 20/20. So as you look back, you’re able to see “perfectly” what you should have done. So why does our government keep getting it wrong.
We look forward to and appreciate your comments.
Posted in Sourcing Safe Foods, Sourcing Safe Products | No Comments »
August 30th, 2010
On Fridays post “Procure to Pay analysis requires careful planning Part I of II” we began to answer a customers question as to were they actually getting all of the savings from the low quotes in their online RFX process.
Here is an example of what might happen or actually does more often than not as result of the actions in Fridays post.
If we come up with the math from Friday’s scenario, it takes a full quarter to execute which is not a stretch at all. Unfortunately your incumbent supplier was not selected and your contract with them expired 5 weeks ago. Now your out of contract costs are now up by 5% for the last five weeks because you are not so important to this supplier any longer. So not only has your existing price gone up for the last 5 weeks, you lost the opportunity to buy the product from your new supplier at 20% less over the same five weeks. These combined costs now erode your total estimated savings with your new supplier who you probably have not even added to your accounts payable system which will also result in late fees.
Ask your e-procurement solution provider how they can help you with this process.
We look forward to and appreciate your comments.
Posted in Business Sourcing, E-procurement, E-procurement Solutions, E-procurement Tools | No Comments »
August 27th, 2010
An associate at one of my customers asked me recently if they were actually getting all of the savings from the low quotes in their online RFX process.
This is actually a great questions and a tough one to answer if in fact it has not been planned for during the planning process. We all know that there are all sorts of saving figures quoted in the e-procurement industry for just about any product or service available.
There are a number of areas necessary to consider when trying to figure out not only your ROI on these projects, but more importantly how much of the savings made their way to the bottom line and what is your leakage percentage. Some of those are as follows.
1. How long did it take you to award the business?
2. How long did it take you to test samples?
3. How long did it take you to sign a contract?
4. How long did it take you to accept your first delivery?
5. Was the first invoice for the exact price you contracted for?
6. Was the shipping and handling exactly as bid?
7. Were there and SOW change requests that raised pricing?
8. What P&L period are you reporting against?
9. What was the budget for this product or service?
10. Can you trace the spend to a specific P&L line item?
Can anyone guess what the results of these actions are? Check back with us on Monday find out in Part II.
We look forward to and appreciate your comments.
Posted in Business Sourcing, E-procurement, E-procurement Solutions, E-procurement Tools | No Comments »
August 26th, 2010
Well first you have to find it and then you have to find where it came from. I think they call this product traceability.
To this author it does not really matter. What does matter is that you have to be able to trace where the egg came from, what you fed your hens or fertilized your crops with and how the consumable was processed.
There has been any number of efforts in food industry traceability during the last decade that has resulted in a number of silly naming conventions. You may have heard of a few of them. I guess this means because we have a naming convention that progress is being made.
1. From the farm to the table.
2. From the farm to the fork.
3. From the field to the fork.
In light of the most recent egg recall what on gods green earth is the government doing about building a sustainable and traceable food system. We have this conversation to often and not much happens until the next occurrence.
Product traceability that works would improve the efficiency and speed of response time following a food safety event like our most recent salmonella case. It would also contribute in a significant way to the protection of our public health and help consumer confidence following such an incident. Historically field investigators have been slowed by having to sort through paper reports and documents at numerous locations that are responsible for handing, packing and distributing these products.
Make sure that your procurement solutions provider has a good response relative to how they can help you support traceability in your procurement process.
We look forward to and appreciate your comments.
Posted in Sourcing Safe Foods, Sourcing Safe Products | No Comments »
August 25th, 2010
Egg’s can come in a variety of types depending on what they are going to be used for.
When I was growing up the choices were not so difficult. My grandfather actually owned a dairy and poultry farm. When I visited the farms there were thousands of laying hens that my dad and grandfather owned. All of the eggs were brown and sometimes dirty before they were processed.
With the most recent salmonella outbreak, it is important to be aware of what you are buying as a consumer and as a retail buyer as well as whom you are buying them from.
There are three grades of eggs sold for the US mass market and each comes in a number of sizes.
1. U. S. Grade AA Eggs are practically free from defects and have firm yolks, thick whites, and clean and unbroken shells.
2. U.S. Grade A Eggs are practically free from defects with fairly thick whites, firm yolks, and clean and unbroken shells.
3. U.S. Grade B Eggs have thinner whites and larger, flatter yolks. The shells cannot be cracked, but they may be stained.
There are however many small farmers in the country that offer their eggs to the local neighborhoods where they live. If I were going to buy eggs from these farmers I would want to visit the farm the see the conditions the chickens live in. If I were a retail buyer, I would absolutely want to do the same thing. This author bets that one is far cleaner than the other.
Make sure your e-procurement provider supports from the farm to the table traceability.
We look forward to and appreciate your comments
Posted in Sourcing Safe Foods, Sourcing Safe Products | No Comments »
August 24th, 2010
The most current data on the Egg recall is that more than 2,000 people have been sickened and over 500 million eggs have been recalled for Salmonella.
Five Hundred million is no small number. So what is Salmonella or Salmonellosis and how sick can it make you? This is not the first time we’ve seen a Salmonella outbreak in North America and it won’t be the last.
So just what is Salmonella and what if anything should consumers do to protect themselves beyond just not eating eggs?
There are about 2000 types of salmonella and about 40,000 cases are reported each year. Salmonella Typhimurium is the most common strain. The resulting illness may begin as little as six to as many as forty eight hours after ingestion of contaminated water or food with symptoms such as nausea and vomiting which is commonly followed by diarrhea. There are examples of the illness resulting in death, but these cases are normally restricted to the very young or old or people with other underlying medical conditions.
This author discussed the 2008 United States salmonellosis outbreak extensively which began during the spring of 2008 when hundreds of people throughout the U.S. became ill after consuming contaminated food which was believed to have come from fresh Jalapeno or Serrano peppers from Mexico and raw tomatoes.
There is no vaccine to prevent salmonellosis, but you can minimize your chances of contracting it by following these steps.
1. Thoroughly cook foods to destroy the bacteria.
2. Thoroughly wash fruits and vegetables before eating them.
3. Wash your hands before handling any food.
4. If you are diagnosed with salmonellosis, be sure that you or your doctor informs. the local public health officials.
5. Separate your meats produce and dry groceries while shopping and when storing.
6. Do not keep groceries in your car while you run other errands. Take them home and refrigerate them.
7. When defrosting frozen foods, follow directions completely.
8. Avoid raw or unpasteurized milk and other dairy products.
As we have discussed previously, more work is needed in developing databases of manufacturers, suppliers, brokers, growers and products that can be searched against a variety of entities or against a variety of attributes in order to trace goods to their original source of supply quickly when outbreaks of salmonella and other food borne illnesses occur.
We look forward to and appreciate your comments.
Posted in Sourcing Safe Foods | No Comments »
August 23rd, 2010
I met with a group of retailers last week and the question that never seems to go away is how we can ensure that we are successful with this process.
This author has republished this post in a variety of formats at least 8-10 times as the question never seems to go away when I meet with retailers and other companies interested in successful e-procurement implementation.
Here you go!
1. Executive sponsorship is mandatory.
2. This is required at the CEO and CFO level.
3. Get the entire buying organization together for a kickoff session.
4. Provide an over view of what you are going to do and the impact it can have on the company.
5. Use company financial models to reinforce result opportunities.
6. Discuss and agree on success criteria in advance.
7. Understand that every event will not be a homerun.
8. Singles and doubles score runs.
9. Create a fun environment such as a savings club
10. Consider prizes for the most creative use of auctions.
11. Use scorecards by department with percent of savings.
12. Discuss the meaning and importance of corporate aggregation.
13. Hand out event templates to gather existing product specifications.
14. Put a time requirement on data collection.
15. Don’t overlook any department, product or service.
16. Gather an accurate list of your present suppliers.
17. Work with your sourcing company to identify a top 100 list of events.
18. Calendar the events based on contract status.
19. Prioritize by dollar value, date and strategic value.
20. Conduct department level discovery meetings of 30 minutes to an hour.
21. Investigate existing contract language.
22. Look for auto renewal (evergreen) language roadblocks.
23. Determine alternate sources of supply with your sourcing company.
24. Develop an event rules and instruction template and post with each event.
25. Develop a clear terms and conditions template.
Although these steps are not all encompassing, they provide a format for getting started that offers the best opportunity for reduction in cost of goods, expenses and improvement in corporate earnings. Be sure to combine this with a business partner that knows your business.
We look forward to and appreciate your comments.
Posted in E-procurement, E-procurement Solutions, E-procurement Tools | No Comments »
