Archive for September, 2009

Dragged Kicking and Screaming!

Wednesday, September 30th, 2009

This author was reading a short story today in a section of the Arizona Republic called News from Home. The article had no byline but was attributed to the Wire Services.

The title of the article was “Bull gives slaughterhouse run for its money – in vain”.

Police say a 1,400 pound bull that escaped from a northern New Jersey slaughterhouse dragged officers with a lasso down a street and ran 10 blocks before being captured and sedated. Chief John DeCando, spokesman for the Paterson Police’s animal control division, said the bull was being unloaded at ENA Meat Packing Inc. when it broke loose just before 8:30 a.m. Monday. DeCando said traffic was light during the Bull Run. He said the area where officers were dragged was not a residential area or near a school. Officers finally corralled the animal and DeCando was able to sedate it and return it to the slaughterhouse.

It certainly seems that this bull put up a valiant fight for its life. The appropriate ending might have been to find a farm willing to take the bull in and let is live out its life in a pleasant pasture or as a stud.

Many of us consume meat products. For procurement professionals, one way they can help is to make sure that farms, ranches, slaughterhouses and meat processors follow the most humane practices in order for your company to procure their meat products. One way to do that is to insist that your suppliers follow The Certified Humane Raised & Handled program.

The Certified Humane Raised & Handled program is an inspection, certification and labeling program for meat, poultry, egg and dairy products from animals raised to humane care standards. To learn more please visit The Certified Humane Raised & Handled website www.certifiedhumane.com.

We look forward to and appreciate your comments.

SafeSourcing congratulates The Canadian Standards Association International or (CSA)

Tuesday, September 29th, 2009

CSA International is the abbreviation for Canadian Standards Association International (CSA), a provider of product testing and certification services. CSA tests products for compliance to national and international standards and issues certification marks for qualified products. Certification marks tell potential customers and users that a product has been evaluated by a formal process-involving examination, testing and follow-up inspection-and that it complies with applicable standards for safety and performance

According to CSA’s website they have nine KPI’s for measuring performance during 2009. One of them CSA International and OnSpeX Monitor Product Recalls to Help Protect Consumers is used to monitor product recalls so that they can rely on global supply chains to provide safe products to the market.

Since January 1998, the U.S. Consumer Product Safety Commission has issued 3,428 product recalls and Health Canada has issued 493. Part of what we do every day at CSA International is to monitor these recalls, become involved if they bear the CSA certification mark and take lessons learned back into the standards development.

At SafeSourcing we monitor the activities of organizations like the CSA so that our customers do not need to. What tools does your solution provider use to make sure that the products you buy are safe.

We appreciate and look forward to your comments.

Safety certifications go well beyond food products and food born illness protection.

Monday, September 28th, 2009

Many times the ideas for my blog posts come from conversations with customers or prospects. Often times these same thoughts make it into our product development plans. In fact listening to our customers is one of our most important jobs.

During a recent visit with a retailer, their head of procurement complimented me on our companies efforts related to food safety and in particular commented on the more than 30 safety certifications we hold our 300,000 plus global suppliers accountable to in our SafeSourceIt™ Supplier Database. His thinking was that since they did not sell fresh foods, that area of our business did not apply to them.

This particular retailer does however sell packaged food products, pet food, cosmetics, private label bottled water and also bags these products l for their customers in plastic bags. I think most of you can see where I’m heading with this. Plastic bags are a concern for many areas of the country and in fact outlawed in some areas due to their environmental impact. Food packaging can contain BPA. Dog food has contained products such as melamine. Toys have been found to contain lead. Recently the U.S. government issued a warning on baby garments sold by a popular children’s label. Without too much effort we came up with the following five categories.

1. Clothing
2. Packaged Foods
3. Pet Food
4. Toys
5. Bottled Water.

This author would suggest that we need to exercise care with all of the products we buy. Your suppliers need to be accountable to a number of standards and certifications while also providing traceability for those products beyond the one forward and one back standard that is generally supported in the industry today.

Procurement solution providers need to be prepared to discuss how they intend to accomplish this level of accountability for their retail partners in order to limit consumer risk, while also helping to mitigate potential related risks associated with litigation and other recall related costs that have a direct impact on company profit.

We appreciate and look forward to your comments

Yesterdays post discussed The Design for the Environment (DfE) Program.

Friday, September 25th, 2009

First and foremost as your company builds programs intended to support our environment with your through your procurement processes; is making the decision that corporately you will procure, reuse and resell Environmentally Preferable Products or (EPP). At a minimum company’s should at least make this a significant checks and balances system within their existing procurement processes. By definition, an environmentally preferable product is a product or service that has a lesser or reduced impact on human health and the environment when compared with competing products or services that serve the same purpose. Such products or services may include, but are not limited to those which contain recycled content, minimize waste, conserve energy or water, and reduce the amount of toxics either disposed of or consumed.

The above process commitment will ultimately have an impact on reducing your company’s carbon footprint. Your carbon footprint is “the total set of greenhouse gas emissions caused directly and indirectly by a company, person or other organization. Even products can have a carbon footprint measure based on how they are manufactured. Carbon footprints are measured by undertaking a greenhouse gas emissions evaluation. Once the size of a carbon footprint is known, a strategy can be devised to reduce it.

Creating a measurement system is more difficult although there are measurements that the government holds manufcuturers to. A simple process as a retailer that this author supports is what percentage of product procured went through this system of check and balances this quarter or this year versus last quarter or last year. Another would be what percentage of products that you reuse or resell would qualify as Environmentally Preferable Products versus the number for prior reporting periods.

This is a very simple process to put in place and something that consumers are looking for. Ask your procurement solutions provider how they can support you in this effort.

We look forward to and appreciate your comments.

The Design for the Environment Program.

Thursday, September 24th, 2009

The Design for the Environment Program can drive a simple set of questions that can
insure that the products you offer your consumers are environmentally safe.

The Design for the Environment (DfE) Program works in partnership with a broad range of stakeholders to reduce risk to people and the environment by preventing pollution.
The Design for the Environment Program is a United States Environmental Protection Agency (USEPA) program that works to prevent pollution, and the risk pollution presents to humans and the environment The use of Life cycle assessment (LCA) is employed to forecast the impacts of different (production) alternatives of the product in question, thus being able to choose the environmentally most friendly. The program also includes several subsidiary approaches, such as Design for Disassembly.

Since 1992, the DfE Program has worked with more than 18 industrial sectors to empower industry to incorporate environmental considerations, along with performance and cost considerations, into decision-making processes. By doing so, companies provide environmental protection more effectively and efficiently by using cleaner technologies. This Web site highlights findings and impacts of the DfE Program.

What process does your e-procurement solution provider follow in order to support your Corporate Social Responsibility Initiatives (CSR)?

We look forward to and appreciate your comments.

Understanding the complexity of contracts and their lifecycles.

Wednesday, September 23rd, 2009

Contract Management is the management of contracts with customers, vendors, partners, or employees. Contract management includes negotiating the terms and conditions in contracts and ensuring compliance with the terms and conditions, as well as documenting and agreeing upon any changes that may arise during its implementation or execution.

Contract Management or (CM) can be summarized as the process of systematically and efficiently managing contract creating, execution, and analysis for the purpose of maximizing financial and operational performance and minimizing risk.

A recent study found that 42% of enterprises indicated that the top driver for improvements in the management of contracts is the pressure to better assess and mitigate risks. In addition, nearly 65% of enterprises report that contract lifecycle management (CLM) has improved exposure to financial and legal risk. Common commercial contracts include employment letters, sales invoices, purchase orders, and utility contracts. Complex contracts are often necessary for construction projects, goods or services that are highly regulated, goods or services with detailed technical specifications, intellectual property (IP) agreements.

A significant problem with the life cycle of contracts today particularly in the retail space is a process called evergreening by which a contract is renewed automatically, often with less favorable terms. These evergreen contracts between two parties will automatically renew after the completion of the contract period. This will occur until the agreement is cancelled by either party. Without a system in place to monitor or manage contracts, evergreening can add unnecessary costs to businesses, often for millions of dollars as well as damage ongoing relationships between suppliers and buying organizations.

Ask you solutions provider how they can help you in this area.

We look forward to and appreciate your comments.

How can retail procurement professionals use wiki’s as learning tools?

Tuesday, September 22nd, 2009

According to the king of all wikis, Wikipedia; a wiki is a collection of web pages designed to enable anyone who accesses it to contribute or modify content, using a simplified markup language. Wikis are used in businesses to provide affordable and effective intranets and for knowledge management. Ward Cunningham, developer of the first wiki, originally described it as “the simplest online database that could possibly work”.

“Wiki” is a reduplication of “wiki”, a Hawaiian word for “fast”. It has been suggested that “wiki” means “What I Know Is”.

The SafeSourcing wiki is one of many tools available on the SafeSourcing website which is dedicated to easy to use and free sources of information for retail procurement professionals. This type of wiki is generally referred to as a specialized wiki. As such, the Safesourcing wiki is focused on procurement terms and discussions that provide general knowledge relative to any number of procurement and supply chain related issues. Subject matter can be wide ranging and could include the following subjects, and much more.

1. Safety in the supply chain
2. Environmental consciousness in the supply chain
3. Retail procurement terms and definitions.
4. Supply Chain Standards

An example of how a procurement team or individual knowledge worker might use a wiki could evolve like this. A retailer decides to develop their social responsibility programs around the procurement of humane raised meat products, sea food products and other environmentally supported products. As you have noted through following the above links a well thought out wiki can provide greater definitions, discussions as well as links to other information sources such as group websites etc.

The nice thing about wikis is that the definitions and discussions are not static. Authorized users can add to definitions, discussions as well as rate the site. This in and of itself is educational. In this way a body of work can grow from the contribution of all users and help to provide a reliable source of data for professionals in a specialized field.

Please feel free to visit the safesourcing wiki regularly and offer your comments, terms, definitions and suggestions. This section of the SafeSourcing website is a free tool for procurement professionals. It is just one way we try to support the retail procurement and supply chain professional, which is the most difficult job in retail.

We appreciate and look forward to your comments.

Ron Southard

Are you ready for bad news or the approaching storm?

Monday, September 21st, 2009

The reason you are reading this paragraph at all is that bad news and weather sell. Bad news about the weather sells better. We see it at the grocery, convenience or drug store checkouts every time we make a purchase. How often do the news channels lead in with Good Samaritan stories? Everyone wants to follow the bad news. Men in particular like to follow news of bad weather. My wife says I can tell you the temperature and elevation at any time of the day as well of the impact of one on the other.

So what do you do in case of a storm? What is your information source?

From a procurement perspective we do have a storm brewing and it’s based on a lack of easily accessible information, we can be faced with any of the following on any given day.

1. The loss of a source of supply
2. Damaged goods
3. Product recalls
4. Product safety issues
5. Food borne illness issues
6. Environmental impact issues
7. Poor product specifications
8. Lack of adequate inforamtion at our fingertips
9. No way to openly collaborate with other procurement professionals
10. Transferred or promoted resources that leave a departmental brain drain

The question is how do we deal with this? There are a variety of portals, search engines and website home pages that may or may not contain what you are looking for. The question is there one that contains it all and does not cost a nickel to access. If there were, it would need to include the following.

1. A central repository and launch point for industry alerts
2. A central source for procurement information
3. A central collaboration point for all procurement professionals to hold open forum conversations.
4. A central location where one can find specifications on hundreds of products.
5. A central database of new global and local sources of supply
6. A central location that tracks suppliers environmental practices
7. A central location that tracks suppliers product safety practices
8. A daily educational commentary that can be commented on or forwarded to others in the procurement space for review.
9. A central location for your team to hold private forum conversations and share private documents.
10. A central location where companies can trace beyond one forward and one back if necessary after they have bought products or services.

The best offense is a good defense. When a storm approaches having the right tools to insulate you from the storm surge are critical. There is only one tool in the procurement space that can answer yes to providing all of these tools. To investigate further, please follow this link and spend a little time to see if you can find them all.

We look forward to and appreciate your comments.

What should retailers believe when hearing claims of huge ROI’s for e-procurement events?

Thursday, September 17th, 2009

There are literally dozens of calculations that go in to calculating a companies ROI onany type of purchase they make. In fact the entire procure to pay process has a number of steps that require analysis when a company reflects their net savings. A very simple example is that of switching costs if a new supplier is selected. There are several other cycle measuring terms that also describes this total process.

Life-Cycle Costing is a procurement technique which considers operating, maintenance, acquisition price, and other costs of ownership in the award of contracts to ensure that the item acquired will result in the lowest total ownership cost during the time the item’s function is required.

An oldie but goody is Total Cost of Ownership or (TCO) which is a financial estimate designed to help consumers and enterprise managers assess direct and indirect costs commonly related to software or hardware. It is a form of full cost accounting.

For the many terms or buzz words that describe net savings or ROI and there are dozens; probably the most accurate way to determine the real numbers are to ask prospective solution providers for a reference and then ask the retailers finance team how they measure results and for a couple of specific examples by category and how they flowed through the Profit and Loss statement.

We look forward to and appreciate your comments.

How retail companies can use standards to support their Corporate Social Responsibility (CSR).

Wednesday, September 16th, 2009

Contributions to the welfare of society can come in many forms such as supporting the arts, further education, give to social welfare agencies, supporting community-building initiatives, reducing pollution, and the other charitable causes. Businesses that adopt socially responsible directives help to allow government agencies to minimize their involvement with the corporation

One way that retail companies can add to their social consciousness is to try and use Certified Reference Materials or (CRMs) which are ‘controls’ or standards used to check the quality and traceability of products. Requiring these standards prior to purchasing products indicates a lot about companies commitment to its stakeholders which includes its consumers and those associated with them. It also mitigates risk should recalls occur as a result of harm.

As an example, a reference standard for a unit of measurement is an artifact that embodies the quantity of interest in a way that ties its value to the reference base. At the highest level, a primary reference standard is assigned a value by direct comparison with the reference base.

A primary standard is usually under jurisdiction of a national standards body such as the ISO or The International Organization for Standardization which is an international standard -setting body composed of representatives from various national standards organizations. Relative to an example of a primary standard, you might refer to the Future ISO 26000 standard on social responsibility published as Draft International Standard which ties very nicely to this post.

We look forward to and appreciate your comments.