Archive for December, 2009

Food Safety for Retailers should be a high priority New Years Resolution!

Thursday, December 31st, 2009

In addition to that article the two papers I read today had a total of seven other articles or opinions on safe consumables including a focus on airport food, school cafeteria food, fast food and others. Houston we have a problem!

Today’s procurement knowledge workers responsible for purchasing consumables for their customer base are growing more concerned in their ability to procure safe products, suppliers to deliver safe products, or farms and manufacturers to produce safe products.

So what can be done to improve the situation? To begin with buyers require fresh reliable data. This begins with understanding your trading partners’ commitment to food and consumable product safety.  From a pure sourcing perspective asking simple questions like; how do you insure that the new sources of supply that you offer us for inclusion in e-procurement events will deliver safe products? The answer is not as simple as just responding by saying we or they support GFSI, SQF or any number of other safe food initiatives. The answer should be that as a vendor they have a large data rich supplier database from which to choose new sources of supply that is easily searchable by the retailer which includes safety data and basic RFI information. Additionally, all suppliers, brokers, manufacturers and others should be held accountable to a variety of safe food standards as elements of the data. Although this is just the first step in supplier selection, it is an important one. A tangential analysis should be ranking these suppliers based on the safety standards they adhere to versus what the industry considers to be best practice implementation. Additionally an e-procurement partner should be able to provide easy access to industry safety updates and alerts on a daily basis and a consistent refresh of the supplier database, based on new information as it becomes available such as suppliers that have failed or missed inspections or had other types of violations. Although traceability also enters into this discussion, it is also something that is required after a product has failed, been recalled or caused illness.

To conclude your questioning of your sourcing solution provider a final step should be; Show me!

We look forward to and appreciate your comments.

Some closing thoughts on e- procurement goals and resulting resolutions for the New Year.

Wednesday, December 30th, 2009

As an example, let’s take an individual look at our  #10  procurement thought “Evaluation of low cost technology solutions”

Each and every year companies spend millions of dollars developing new business plans for the upcoming year. Basically these are the company’s New Year resolutions. Most of the fourth quarter of every year is focused on this endeavor. As we discussed in our first post of this series this means there is no excuse for not having your e-procurement goals written down.

Because of new open source software applications you should no longer have to shell out a ton of money for license fees. Your current e-procurement solution provider if using the most current technologies should not have to charge you an arm and a leg for using their application. In fact, your prices should be continuing to scale down. The need to pay increases in license fees or use fees today to have software installed behind your firewall or in a hosted environment should be compressing dramatically as a result of lower development costs for newer versions of applications based on the use of inexpensive or in some cases free open source tools. The resulting applications are then being offered in the form of Software as a Service or Cloud Computing where you use only what you need and pay accordingly.

Companies can begin to seek lower fees by simply asking their present solutions provider; why their costs have not dropped. The size of your providers IT organization adds to your providers overhead and as a result to the fees you are paying for using their tools. These organizations should be shrinking. If a current application has its roots in the late 1990’s or early in this decade you are paying more to use it as a result of the embedded cost to develop it. More current applications that use a variety of freeware tools make it possible  for today’s developers to do  multiples of the work  a single developer could accomplish as little as five to ten years ago.

Next generation applications should also include a level of intelligence that was not available five to ten years ago. Whether that is simple language versus HTML or the use of intelligent agents, the result should be easier to use applications resulting in shorter cycle times and not increases in new service offerings to compensate for reduced development costs. 
 
What this all leads to for the e-procurement knowledge worker is lower embedded development costs, lower ongoing support costs and more flexibility relative to customization requests going forward. It also means that it is easier to change providers because there is relatively no technology cost required and ramp up time is almost immediate. This in and of itself will hold your current solution provider accountable to the service levels you require.

Have this discussion with your e-procurement solution provider; it may save you thousands or dollars.

We appreciate and look forward to your comments

More thoughts on e- procurement goals and resulting resolutions for the New Year.

Tuesday, December 29th, 2009

Companies with as few as three stores and companies with thousands of stores are often looking for the same types of issues. The process and the results are very similar regardless of scale and as such require the same careful focus to drive those results. If we were to white board what should be included in our goal or resolution setting it would certainly include many of the following areas.

1. Lower costs
2. Consistent and improved quality
3. Products that guarantee safety for your consumers
4. Smooth transition to new supplier relationships
5. Quality product specifications
6. Unlimited new sources of supply
7. Well thought out internal and external collaboration and aggregation
8. Support for environmentally focused products
9. Support of CSR Initiatives.
10. Evaluation of low cost technology solutions
11. Joining and collaborating with a share group
12. Review of Incumbent suppliers
13. E-Sourcing or e-procurement training.
14. Existing procurement tool evaluation
15. Existing contracts evaluation
16. Spend evaluation
17. Alternative geography sourcing
18. Sourcing and Supply Chain Knowledge transfer
19. For resale sustainable practices review
20. Perfecting The expense category
As your organization develops their list similar to the one above, prioritization and elimination sessions will lead you to a best few focus from which you can refine your e-procurement goals and or resolutions for 2010. Please use the above guidelines as a source for your thinking. Simple goals written down are the most achievable. During the balance of this week, we will focus on many of the above five areas in more detail.

We appreciate and look forward to your comments

E-sourcing and e-procurement Auld Lang Syne.

Monday, December 28th, 2009

 “Auld Lang Syne” is a Scottish poem written by Robert Burns in 1788 and then set to the tune of a traditional folk song. Roughly translated auld lang syne literally means old long since but can be paraphrased into statements such as long long ago, the olden days, for old time’s sake or the good old days.

However, pining to much for the old days can have a negative effect on your planning for the days, weeks and years ahead. I’m sure as this author has, many of you have heard sourcing individuals say things such as “we’ve always done things this way” or “that won’t work for us”. In today’s world with all of its economic and global pressures, this is particularly dangerous way of thinking for sourcing professionals. The good news is that we still have some time before the New Year and we should use it reflectively to build our resolutions for the upcoming year that should then drive our sourcing business goals.

Although a number of strategies can be used for this thinking for both individuals and groups. The most important thing is to capture the data in its most raw form and then refine it from there. This may occur in group open discussions and white board sessions with a moderator or in private free thinking session where you personally write down all of your own random thoughts. The important thing is to write them down. Statistically people who write down their goals have over an 80% higher success rate of achieving them. Research tells us that of those people that do make New Years Resolutions only 75% make it past the first week of the year and the numbers drop dramatically from there.

We will be discussing our thoughts on e-sourcing and e-procurement resolutions for the New Year over the next few days in order to provide our readers with a base from which to draw for their own refinement.

We look forward to and appreciate your comments.

Think about Santa’s Logistical Challenges.

Wednesday, December 23rd, 2009

Now if geographical challenges were not enough, we have to also consider that the Christian population of the world is about two billion people. That’s a whole lot of zeros even if Santa were to eliminate 10% as naughty. So just how does one man and one sleigh and eight tiny reindeer deliver  all of those presents in one night across multiple time zones when the primary fuel used is hay? That’s a good question.

We checked with Federal Express, and their hub in Memphis Tennessee handles approximately 1.5 million packages per day. That means they handle a little over half a billion packages annually. This of course does not even equal one third of what jolly old Saint Nick handles in one night.

Personally this author believes it is a little faith and a little magic. The same type of faith used to convince Virginia O’Hanlon that there is indeed a Santa Claus in the September 21, 1897 edition of the New York Sun when her friends had told her that he did not exist.

In a time of economic upheaval and with many of our countries young men and women protecting our liberties around the world, we all need a little faith and maybe some magic. So from the famous poem Twas the Night before Christmas written in 1822 by Clement Clarke Moore. “Now Dasher! now, Dancer! now, Prancer and Vixen! On, Comet! On, Cupid! , on Donner and Blitzen! To the top of the porch! to the top of the wall! Now dash away! Dash away!  Dash away all!”

Sometimes questioning what is just does not make sense. Here’s hoping all of your holiday wishes are magical.

We look forward to and appreciate your comments.

Creating small business networks and collaborating creatively to gain competitive advantage.

Tuesday, December 22nd, 2009

We often hear the term collaboration or collaborative partners or networks when we are discussing the supply chain. It rolls of everyone’s tongue like we all know what we are talking about. So this author took a look at Wikipedia hoping to gain some insight and clarity. According to Wikipedia, Collaboration is a recursive process where two or more people or organizations work together toward an intersection of common goals, and
An aggregate is a collection of items that are gathered together to form a total quantity.

Since collaboration only means different groups or organizations working together towards the same goal, that term can apply to just about any business function. However when we combine it with the word aggregate to form the collective e- procurement term Collaborative Aggregation which was coined by this author in 2006; we arrive at something potentially meaningful.

Collective buying organizations and sometimes share groups often combine purchasing volumes of like products to drive better discounts. Large companies often aggregate their purchases among departments and are more often today doing the same thing across different operating group’s or companies within a larger organizations to drive economy of scale in purchasing.

The unfortunate truth, is that not much out of the box thinking is going on in this process. We are so involved in the process that we can not see the forest for the trees.

Let’s take a look at a small regional supermarket chain as an example. They buy their products mostly from wholesalers who are able to aggregate the volumes of many in order to earn enough discounts to pass on reasonable pricing to the retailer that is slightly better than the retailer might earn on their own, and reserve a little for themselves in order to support their business. These products are normally for resale products. In the not for resale area or supplies, the regional retailer usually does business with local suppliers for a variety of supplies that can include everything from cleaning fluids to paper bags. The supplier normally does good job of managing these products against a number different cost structures to maintain a customer margin that is good for them. As an example if the price of oil is up and the resin market high, the supplier might be making less on plastic products such as plastic shopping bags or t-sacks, soup containers, trash can liners etc. The supplier may however also carry paper products and other supplies that can be mixed together to drive a total customer margin. Retailers can do the same thing. Here’s a partial list of how collaborative aggregation can work.

1. Take a good look at the total list of supplies offered from your primary supplier.
2. Compare that to what you are buying from them.
3. Ask your e-procurement provider for a list of suppliers within a 50 mile radius that can provide the same products or some of the same products.
4. Look at local businesses within a five mile radius of your area that are not in your industry but buy some of the same products such as trash can liners, cleaning fluids, paper products etc.
5. Call them and explain how collaborating might save you both money.
6. Ask for the name of their supplier as they might be different from yours.
7. Determine a test group of products to request bids on.
We appreciate and look forward to your comments

On the twelve days of retail e-procurement Christmas.

Monday, December 21st, 2009

 
1. On the first day of Christmas our e-procurement service provider gave to us, a streamlined procurement process.
2
. On the second day of Christmas our e-procurement service provider gave to us, more suppliers to source our goods from.
3. On the third day of Christmas our e-procurement service provider gave to us, pricing that works for smallest categories..
4. On the fourth day of Christmas our e-procurement service provider gave to us, consistent and customized product specifications.
5. On the fifth day of Christmas our e-procurement service supplier gave to us, more time for other priorities.
6. On the sixth day of Christmas our e-procurement service provider gave to us, improved quality in our products.
7. On the seventh day of Christmas our e-procurement service supplier gave to us, better supplier education.
8. On the eighth day of Christmas our e-procurement service provider gave to us, a simple award of business process.
9. On the ninth day of Christmas our e-procurement service provider gave to us, support for a better carbon footprint.
10. On the tenth day of Christmas our e-procurement service supplier gave to us, total category e-procurement.
11. On the eleventh day of Christmas our e-procurement service provider gave to us, safer products for our customers and planet.
12. On the twelfth day of Christmas our e-procurement service provider gave to us, a sustainable e-procurement process and improved corporate net earnings.

Now, ask yourself if all of these goals are accomplished on your company’s behalf by your present e-procurement service provider.

We look forward to and appreciate your comments. Happy Holidays.

The source of pain is often a broken heart. I miss you Riley!

Thursday, December 17th, 2009

Have you ever had a best friend? Many people can never really say that they have. You may have family, friends, acquaintances and a variety of close relationships, but a best friend is something special and elusive. It is an unconditional acceptance of oneself by another and visa versa.  A best friend does not need to be another person. It is just an entity that understands you, listens to you, looks forward to being with you and generally gets excited when you are around and conversely is upset when you are not around.

The above is exactly the relationship I have or had with my dog Riley. Riley was born on The 25th of January in 1994. We found him at a store called Jacks Aquarium. Riley is a big boy at 52 pounds and being half chow and half golden retriever looks very much like the lion king. I think Riley picked us more than we picked him. We were a sad family at the time having lost my children’s childhood dog Ishi and then relocating to somewhere my family nor I  wanted to move to shortly afterwards. I really think he knew he could help us. So when my oldest daughter Tara picked this little ball of fur up, he pooped on her foot and it was at that minute that I knew he was ours and would become my very best friend. His mom named him on the way home because she wanted him to live the life of Riley for those that remember that TV show. And he did.

Riley really was a wonder dog. He house trained (potty trained) himself in two days and learned very early on that our clawless cat Ginger could box him silly if he messed around with her to much. It was just a pleasure to watch him do what he did as he grew. Riley loved to walk. In many cases he went twice a day about a mile and a half each time regardless of weather. We even made snow angels together and hid under trees during a severe storm one time. I’m sure that the many miles both my wife and I walked with him helped us physically and emotionally. Riley loved to go to the “The Creek” on a car ride every Saturday regardless of the weather. He knew that in addition to the ride and walk that he would get to eat Jack’s Links Beef Jerky on the way home and he still does to this day. No boring biscuits for this boy, he wants his Jerky. At seven years old, Riley lost his eye sight to glaucoma; he had such beautiful golden eyes. I knew he would still want to be good looking for the girls so I had his eyes replaced with fake ones. After all an intact male dog does not need to see to perform at his best, but he does need to be good looking. Several years later Riley lost one of those eyes and has had only one since. The best line we ever hear is from small kids that say something like; “does the other one work”  At nine years old, Riley and his mom and Dad (me) moved to Arizona and left his sisters Tara and Meri behind. This was really hard on Riley, but every time he heard their voices on the phone or saw them during a visit he would go crazy because he loved them so.

 During his years in Arizona Riley found wonderful places to walk including a big lake he called the fountain. It did take him a while to remember not to stray from the path because of Cacti (ouch). Remember he is blind. During Riley’s life in Arizona he was a victim of the pet food issue that killed thousands of dogs and cats across the country because of melamine. (This actually was one of the motivations for my company SafeSourcing) He lost a lot of weight and we thought we would lose him but this boy is a fighter. He has however never eaten dog food again. He loves tuna, chicken, hamburger, steak and most anything we eat for dinner which he dutifully eats along with us at my feet every night. When Riley was 13 he got to take a car trip across the country to visit his old haunts in Ohio. He absolutely hated the scenery on the car ride and could not wait to get to his hotel room each night for dinner, jerky and some well earned sleep. Riley remained very healthy for most of his life until he turned fifteen. The last year has been tough as he has had a number of issues but has fought his way back each time. In fact he is asleep at my feet as I write this short tribute. He does not know what is going to happen tomorrow, in fact at the moment I’m not sure he is aware of much as the steroids are what keep him with us at this point. He does know that it seems to be raining today which does not happen in the desert very often. I’m glad he can not see because he would know it is my tears that are falling gently on him as we hug for one of the last times.

I’m still praying for a miracle but not holding out much hope. During his last rebound over Thanksgiving we had one last walk to the park where he told off another large dog that thought it was now his park. He had not been able to be there in months. I will miss my walks and rides into the desert with the top down. I will miss him sleeping beside my bed at night. I will miss him sleeping at my feet in my office while I work. I will miss how he intelligently finds his way around the house without eyesight. I will miss how he can find Jerky on the other side of the room. I will miss talking to him when I’m lonely. But most of all I will miss that he misses me when I’m gone whether it is for a minute or a month. That’s because we are best friends and we love each other.

So, good by my dear best friend your mom, sisters Tara and Meri, granddaughter Sammi and brother Ryan all miss you already. I however miss you most of all and always will. You are my best friend and my son. Until we meet again run free you now have you sight back.

Your Dad loves you most of all and will never be the same again.

I know many will not read this. If you do and want to comment, find someone you love and hug them first. I hope you have a best friend like this some day.

Comments welcome.

Riley on a Car Ride.

Riley on a Car Ride.

The holidays are a great time to refocus your companies green sourcing efforts

Thursday, December 17th, 2009

What does it mean to go Green? I was rereading an Aberdeen white paper Building a Green Supply Chain from last 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 your CEO if he or she agree with these definitions. Many probably do. The next question would be are you as a company measuring any of them and their impact on your companies performance. The answers would be a good indicator of  your company’s commitment to being Green and not just caught up in green wash and web slogans.

We look forward to and appreciate you comments.

Monitor your supplier’s safety performance or else.

Wednesday, December 16th, 2009

When we think about safety and environmental standards in the supply chain, I honestly believe that retail buyers say quietly to themselves; how the hell are we supposed to monitor this stuff.

The issue becomes more complex when you consider that data is required  from your own organization relative to the historical performance of existing suppliers, data from the supplier as to their own assessment of their historical performance and finally external data that neither may have at their finger tips.

When we talk about safety and the environment, the questions that retailer buyers should ask suppliers is pretty simple. What certifications do you carry relative to food safety, product safety and environmental safety? Now ask your procurement solutions provider if they can provide that information from their supplier database without having to write an RFI to do it.  Let’s see who comes up with the answers first.

It may be easier for retailers to rely on their e-procurement solution providers for this type of data if the provider has it included in their supplier database. Pre-populated e-procurement templates can act as a form of scorecard for existing suppliers and potential news sources of supply. This is actually a type of automated RFI process which can save retailers a lot of work when trying to find additional sources of supply or when trying to drive cost down with existing suppliers. These data may also help to protect retailers from harmful litigation when products end up not being as safe as promised.

So where is the or else? Here you go. Or else your customers get sick. Or else the environment gets sicker. Or else someone gets hurt. Then we can pay the lawyers more and that’s a really big or else.
We look forward to and appreciate your comments.