Archive for June, 2008

The Greening of the Supply Chain: Mind your Three P?s.

Friday, June 6th, 2008

The Greening of the Supply Chain: Mind your Three P?s.

What does it mean to go Green? I was reading the Aberdeen white paper Building a Green Supply Chain from March of this year and believe they may in a concise format have the best glossary of definitions as to the meaning of and impact on what it means to be Green. Their short but effective green glossary defines the following terms.

1. Corporate Social Responsibility (CSR) posits that companies have a responsibility to be social and environmental stewards and that having a positive impact on society and the planet is as important as profit.
2. Green refers to practices, processes and products that have a minimal impact on the health of the ecosystem. The emphasis is on non hazardous recyclable, reusable, and energy efficient products and processes.
3. Sustainability ensures the ability to meet present needs and profits, today, without compromising the ability to meet them tomorrow.
4. Triple Bottom Line (TBL) determines that business has positive impacts on the three P?s: people, profit and planet and is a standard framework for CSR agendas.

It might be interesting to ask CEO?s around the country if they agree with these definitions. Many probably do. The answer would however be a good indicator of a company?s commitment to being Green and not just caught up in green wash.

Yesterday Wal-Mart and Costco announced better than expected results for their past quarter and the stock market was delighted. What if their results had not been as good and same store sales were flat? But concurrently the companies offered guidance of the significant and positive impact they are having on the evolution of a green supply chain. Would Wall Street have reacted in the same way? Personally I think it highly unlikely.

The great news is that every day more and more emphasis is being placed on this subject by companies of all sizes.

I look forward to your comments.

Ron

Is critical thinking in supplier selection a key to quality reverse auctions? You bet!

Thursday, June 5th, 2008

If you wish to host a successful reverse auction a robust supplier database is key to encouraging competitive bidding. A logical focal point for hosting a competitive auction is to assemble all of your present vendors for a particular category that you hold in good standing. These are suppliers from whom you have sourced products using traditional means in the past. In general the principal is the more vendors or suppliers that participate, the better your potential results. This however also requires strategic thought because you are beginning a process that you want to use on a recurring basis. As such inviting the same suppliers again and again may seem to make sense, but may not encourage the results you are looking for. This is a critical reason why it is important to have the most robust supplier data possible available for your review. If you can only find six local suppliers for a particular auction, they will all most likely agree to participate the first time. However a key issue to consider is what will encourage them to participate the next time and after that? Suppliers will almost always not be the same size. As such the smaller vendors will most likely bid early and drop out after the early rounds. These suppliers will most likely not agree to compete in the future as they consider their chance of winning the business unrealistic. Suppliers that finish first or second or incumbents that are displaced will agree to participate again, but lack of competition will make the auctions less successful.

A logical question would then be. If we only have six suppliers available how many should we invite to participate? Should we invite them all? Every company will answer this question differently. When considering the future, do we want events or do we want continual process improvement that drives continuous savings. There are several possible solutions to consider. First, only invite four participants to begin with. This will create a competitive environment for your auction. Let?s assume that in twelve months when you repeat this auction that the two largest suppliers agree to return. You could now invite supplier?s number five and six that were not included in the original auction. You have now created a competitive auction for the second year or cycle. A second thought might be to not invite all of the largest suppliers to your first auction, in order to manage the quality of your suppliers for future auctions. This type of critical thinking supports continual process improvement in e-procurement implementations.

I look forward to your comments.

Ron

The Environment. Who’s on first?

Wednesday, June 4th, 2008

In a recent survey of eight thousand (8,000) adults conducted by Disney Family.com between the 22nd of February and the 17th of March 2008. When asked who should enforce environmentally sound practices? Forty percent of respondents indicated that it should be the government; thirty nine percent indicated that it should be individuals; thirteen percent indicated that it should be businesses and nine percent indicated that it should be the schools. That equals more than one hundred percent based on rounding. The great news is that 100% of the individuals surveyed had an opinion. That’s a step in the right direction for the environment. In question is the fact that forty percent of individuals surveyed defaulted to this being a government responsibility. Did not our sixteenth President of the United States Abraham Lincoln say during his Gettysburg address during November of 1863 that “government of the people, by the people, for the people, shall not perish from the earth”?

I believe that it really is about the people. All of the people. I don’t believe that government can do it alone without guidance from the people. I don’t believe that businesses can do it alone without guidance from the government in the form of standards. I don’t believe that people can do it alone without taking it to the work place. And, unless we focus on it in the home and the workplace there is not much schools can do to enforce their environmental educational content. I really believe that their should have been a selection option in this survey stating that it takes all of us working together towards a common good. And, since I have always told my children and co-workers to give more than 100% if they want to be successful, rounding to greater than one hundred percent in this case would have been a win for the environment.

At SafeSourcing we pay it forward every day where the environment is concerned by focusing on the environmental standards of the suppliers in our SafeSourceIt™ supplier database such as Greenstar Certified, LEEDS, Green Seal, and EcoLogo to name a few.

I look forward to your comments.

Ron

The Environment. Who?s on first?

Wednesday, June 4th, 2008

In a recent survey of eight thousand (8,000) adults conducted by Disney Family.com between the 22nd of February and the 17th of March 2008. When asked who should enforce environmentally sound practices? Forty percent of respondents indicated that it should be the government; thirty nine percent indicated that it should be individuals; thirteen percent indicated that it should be businesses and nine percent indicated that it should be the schools. That equals more than one hundred percent based on rounding. The great news is that 100% of the individuals surveyed had an opinion. That?s a step in the right direction for the environment. In question is the fact that forty percent of individuals surveyed defaulted to this being a government responsibility. Did not our sixteenth President of the United States Abraham Lincoln say during his Gettysburg address during November of 1863 that “government of the people, by the people, for the people, shall not perish from the earth”?

I believe that it really is about the people. All of the people. I don?t believe that government can do it alone without guidance from the people. I don?t believe that businesses can do it alone without guidance from the government in the form of standards. I don?t believe that people can do it alone without taking it to the work place. And, unless we focus on it in the home and the workplace there is not much schools can do to enforce their environmental educational content. I really believe that their should have been a selection option in this survey stating that it takes all of us working together towards a common good. And, since I have always told my children and co-workers to give more than 100% if they want to be successful, rounding to greater than one hundred percent in this case would have been a win for the environment.

At SafeSourcing we pay it forward every day where the environment is concerned by focusing on the environmental standards of the suppliers in our SafeSourceIt? supplier database such as Greenstar Certified, LEEDS, Green Seal, and EcoLogo to name a few.

I look forward to your comments.

Ron

The Pet Food Scare. It made me focus. What’s your Story?

Tuesday, June 3rd, 2008

The Pet Food Scare. It made me focus. What’s your Story?

It’s been almost 18 months, and my best friend is now over 14 years old. If you just used the common dog year formula of 7 years for every dog year he recently turned one hundred (100). How many of us today would sign up for that age if it was guaranteed to us? I hope I’m this healthy when I reach one hundred (100). Imagine waking up early every morning with the same eager air of anticipation. It’s another great day to look forward to. Have some breakfast, go to the park at the end of the street and then on a mile and a half walk. Have a light snack and something cold to drink when you get home and then take a nap in the warm sun spot coming through the window. This sounds like paradise to me, especially at 100.
Many of you probably have a friend just like this. They may not be as old, but the life you share is just as special to you.
How would you feel if this friend suddenly became violently ill and during the next two weeks lost nearly 20% of their body weight? Pets provide many benefits to humans. They comfort us and they give us companionship. In fact to many of us they are simply our family.
The situation described above is true, and fortunately my friend survived the pet food scare of eighteen months ago that for those of us affected we remember all too clearly. Some of our friends were not as fortunate. This is sad.
It sometimes takes personal incidents to initiate one’s focus on a particular subject. In this case it is safety in the supply chain. As a side note, to date retail sales of pet food have still not totally recovered from this incident. This is also sad.
I look forward to your comments
Ron

The Pet Food Scare. It made me focus. What?s your Story?

Tuesday, June 3rd, 2008

The Pet Food Scare. It made me focus. What?s your Story?

It?s been almost 18 months, and my best friend is now over 14 years old. If you just used the common dog year formula of 7 years for every dog year he recently turned one hundred (100). How many of us today would sign up for that age if it was guaranteed to us? I hope I?m this healthy when I reach one hundred (100). Imagine waking up early every morning with the same eager air of anticipation. It?s another great day to look forward to. Have some breakfast, go to the park at the end of the street and then on a mile and a half walk. Have a light snack and something cold to drink when you get home and then take a nap in the warm sun spot coming through the window. This sounds like paradise to me, especially at 100.
Many of you probably have a friend just like this. They may not be as old, but the life you share is just as special to you.
How would you feel if this friend suddenly became violently ill and during the next two weeks lost nearly 20% of their body weight? Pets provide many benefits to humans. They comfort us and they give us companionship. In fact to many of us they are simply our family.
The situation described above is true, and fortunately my friend survived the pet food scare of eighteen months ago that for those of us affected we remember all too clearly. Some of our friends were not as fortunate. This is sad.
It sometimes takes personal incidents to initiate one?s focus on a particular subject. In this case it is safety in the supply chain. As a side note, to date retail sales of pet food have still not totally recovered from this incident. This is also sad.
I look forward to your comments
Ron

Quality e-procurement in a time of heightened Corporate Social Responsibility (CSR)

Monday, June 2nd, 2008

Most companies understand that lowering their cost of goods provides the greatest benefit to their bottom line, but they face significant challenges in trying to do so. So, why do some companies succeed while others continue to implement program after program with no measurable benefit. First among these is the recognition that effective e-procurement initiatives like any successful program requires strong support from executive management. This is important because Retail as an industry lags well behind other industries in utilization rates of e-procurement tools. So at a minimum in order to get off on the right foot, this typically means the CEO, CFO, CLO or CPO sponsorship is critical. Once this directive has been issued, the next step is to identify savings targets across all corporate spend categories. Once these targets are identified and ranked, a category specific attack plan can be developed that best maximizes savings opportunities. It is important to note, that savings alone do not create a successful e-procurement plan. What can not be sacrificed in the name of cost reduction is quality, which can include safety as well as Corporate Social Responsibility (CSR) goals including environmental support programs.

However, a key challenge for any procurement organization directed to implement e-procurement tools across all of their unique spend categories, is to not over complicate the process into something that you can?t maintain. At a high level, the following steps will insure that you are headed down the right path.

Identify all opportunities
Develop a total company strategy
Source qualified suppliers
Negotiate final terms
Award of business
Contract completion
Results Analysis

Most quality e-procurement organizations have well developed plans that will aid you in implementing your best practices while maintaining quality and supporting your CSR initiatives.

I look forward to your comments.

Ron