Archive for May, 2010

How do you keep your contracts and suppliers green?

Friday, May 28th, 2010

The primary way of doing this is to insure that all of your contracts support (GPP) or green product procurement. This practice should apply to all contracts regardless as to whether they are for a product or a service.

Green Product Procurement places its focus on the items below as a condition of the contract or a condition of doing business with the host company. This process applies to both products and services that a company provides to or for your company, and may also apply to their own companies endeavors to support the environment in their daily business practices as well.

1. Products made from recycled content
2. Biobased products and services
3. Environmentally prefererable
4. Energy efficiency
5. Water efficiency
6. Use of renewable energy sources
7. Use of alternative fuels or vehicles
8. Products do not include  Ozone- depleting substances (ODS)
9. Lacking in priority chemicals
10. Use of Electronic Products Environmental Assessment Tool (EPEAT) for electronics.

Make sure your contract templates include environmental language that supports your companies programs and provide the safest products for your customers.

We look forward to and appreciate your comments.

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Hey Retailers if you don’t have a Contract Management solution you will be learning a new language.

Thursday, May 27th, 2010

Don’t assume that understanding legal language and its use is any easier than understanding a new foreign language. Much of the language is used to create ambiguity and may be as difficult to understand as your first foray into speaking Spanish or any other foreign language.

An example of a term used quite frequiently in legal contracts and documents is ‘subject to’.  According the business directory.com this term used in a document generally prevents it from being an evidence of acceptance and, thus, of a concluded-transaction. A court, however, may decide that all the terms and conditions required in the underlying agreement have been included and agreed to and, therefore, the document evidences a concluded transaction. If that definition is clear to you congratulations. If it is not, please join the hundreds of law neophytes out there that require legal help to interpret our contracts for us.

Because we require this type of help and because most of it is done through email with hi-liteing, tracking and merging tools today, keeping track of these conversations and the most current versions of them is incumbent upon you unless you want to be subject to not understanding your own contracts.

Ask your procurement solutions provider their recommendation as to how to solve this problem for you.

At Safesourcing our product is called SafeContract™.

We look forward to and appreciate your comments.

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What are the high level benefits of contract management for retailers?

Wednesday, May 26th, 2010

Often times, companies go into projects like new contract management solutions without any idea as to where they will derive there return on investment when launching a new solution. For the retail marketplace, contract management is a new endeavor for most of the market. The good news here is that the ultimate cost of ownership is probably much less today based on newer technologies and development tools if you want to own the software and install it behind your own firewall. The cost is even less if you plan to use a Software as a Service model where you pay for what you use.

The following are  a few of the  areas in which you may well save a significant amount of time and money  with your new contract management solutions when it comes to delivering a cost/benefit analysis to your management.

1. Operational Improvement
2. Improved collaboration with a trading partners
3. Risk Mitigation from Evergreen contracts
4. Improvement in Financial Management
5. Quality improvement in contract performance

In  all companies large and small these benefits may in fact lead to cost reductions in the form of better utilization of human assets whether that means headcount reductions or reallocation of resources to more important tasks.

Ask your solutions provider to help you identify the best quick hit savings opportunities with their proposed solution

We look forward to and appreciate your comments.

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Retailers is understanding the language within your contracts confusing?

Tuesday, May 25th, 2010

Quite often the longer the contract the more legalese there is to try and interpret and almost every one you ask will in fact interpret it differently.

Most contracts begin with a section called definitions which is where most companies and associates get lost to begin with. This section is just exactly what it says, all terms used within the following clauses of the contract refer back to this section for their specific explanations of a terms meaning within that clause.

Begin by focusing on the definitions as if it were a separate document and then set it aside and read the clauses. Most of the time this will clear up any confusion you are having.

Most contracts have a pretty good flow to them and will include a format that covers most if not all of the following.

1. Definitions
2. Merger and Integration
3. Choice of Law
4. Statute of Limitations
5. Indemnification Language
6. Time of Performance
7. Arbitration 
8. Severability
9. Fee’s
10. General Provisions
11. Non-Waiver 
12. Liquidated Damages

We look forward to and appreciate your comments

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This is Part III of an III part post series titled “Technology Drives E.Procurement Acceptance” focuses on Reasons to Use E-Procurement.

Monday, May 24th, 2010

 Part III Reasons to Use E-Procurement

Sometimes an explanation can be lost in translation so we have developed the following 20 reasons why utilizing the technology-based e-procurement process can provide significant benefits to you and your company. These are certainly not all of the benefits that can be derived from the use of the e-procurement process, but it is a good starting point.

While this list is not ranked in order of importance, many might argue that not much is more important than the #1 item which is improved earnings.

• Improve net earnings
• Enhance safety
• Reinforce corporate social responsibility
• Find new sources of supply
• Streamline the procurement process
• Elevate supplier accountability to meet your standards
• Improve quality
• Reduce costs in a volatile market
• Ensure a competitive environment
• Buy at market pricing
• Maintain a reliable history for comparison
• Educate suppliers as to how you wish to procure products
• Eliminates questions through effective supplier training
• Maintain consistent product specifications
• Improve negotiation
• Improve carbon footprint
• Simplify your “award of business” process
• Free up time for other tasks
• Process works for all product categories
• Provide a detailed audit trail

E-procurement offers many benefits for a broad range of companies in a variety of industries, assuming that the process selected is a high quality system with an extensive supplier database. We must also assume that the e-procurement process is implemented properly with the purchasing company and that the experienced e-procurement system provider works in concert with the buyer in order to realize optimal cost savings.

Numerous technology advancements have streamlined the e-procurement process and made it more user-friendly and less expensive. A company today can expect to reap significant benefits from e-procurement, including: saving money on purchases, reducing the time involved in the purchasing process, tracking current and archival activities and results, eliminating waste and improving the overall efficiency of the supply chain.

 Take advantage of the technology advancements and don’t overlook the benefits of implementing an e-procurement process to strengthen your company’s bottom line.

To download copies of this entire article please use the following link.

We look forward to and appreciate your comments.

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This is Part II of an III part post series titled “Technology Drives E.Procurement Acceptance” focuses on Getting Started!

Friday, May 21st, 2010

Getting Started

First and foremost in getting the e-procurement process right is to select a solution provider or partner that knows what they are doing and is willing to work closely with you during the early part of the process. The e-procurement plan for each company will be somewhat different in order to meet the specific needs of the company. There is however a general order to things that will provide the best opportunity for success.

To realize the most benefit from your e-procurement process, you will need to:
• Develop your strategy
• Complete a detailed discovery
• Learn to understand how to set up your procurement events, even if handled by your provider.
• Use a provider with a high quality process and an extensive database for sourcing suppliers
• Clearly communicate how events will be run or executed to all involved parties • Review the process for sustainability and adjust as necessary
 
As mentioned earlier, it is incumbent upon your e-procurement solutions provider to be able to assist you in completing these tasks in a reasonable period of time. You should be checking the background of the team and the leadership that will be assisting you to ensure their understanding of your industry such as operations, technology, procurement, warehouse management, logistics, transportation, loss prevention, store management and other functional areas of your business that will be sourcing products and services. It is all about detail because knowledgeable attention to detail will improve quality, reduce costs and ensure the success of your company’s new e-procurement process.

Please join us for part III of this post series on Monday titled Reasons to Use E-Procurement.

To download the entire article please use the following  link.

We look forward to and appreciate your comments.

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Ron Southard CEO of Safesourcing is featured with Tim Hull CEO of TDH Marketing in April issue of Technology First. Part I of III

Thursday, May 20th, 2010

Technology First is an Ohio based industry-led, industry-driven trade association dedicated to proactively representing IT in their region and highlighting niche technology companies.

Part I.  E.Procurement Background .
Technology advancements are broadening the acceptance and utilization of e-procurement processes worldwide and making it available through internet access without the need for technology investment. The retail industry has been somewhat slow in considering e-procurement initiatives than have other industries. As a result, much of the lower tier one and tier two retail chains do not use the e-procurement resources that are readily available in the  marketplace today. Some companies would like to, but do not quite know how to get started. In several cases, even the big retail chains are sourcing a smaller percentage of their total spend than the levels being recorded in other industries.

E-procurement processes have been utilized in maintenance, repair and operations (MRO) applications in a variety of industries in addition to manufacturing materials supply. The purchase of office supplies, consumable items and numerous types of hired services from snow removal to landscaping and facilities maintenance can all realize great savings by using the e-procurement process which can range from a simple RFQ to a very detailed RFI. Although e-procurement is oftentimes perceived as merely the purchase of products and services over the Internet, e-procurement is much more than just a means for making purchases online. It is a well-managed, organized process that handles all interactions between the purchaser and the supplier. This process includes optimal management of communications, questions and answers, bids, previous pricing information, inventory utilization and reorder sequences, access to suppliers, historical cost savings, supplier transactions and much more. With built-in monitoring tools, a well managed e-procurement process provides numerous benefits, the most recognizable ones being improved cost control and maximized supplier performance.

With the technology based e-procurement services that are available today, there is no excuse for overlooking this opportunity to reduce supply costs and boost the bottom line. Getting started is easier than ever and more user-friendly, thanks to continuing technology advancements. With high speed bandwidth, reliable security solutions, enhanced software and integrated programs, the e-procurement process is proving itself on a daily basis in terms of performance and reliability.

Please join us tomorrow for Part II of this series titled Getting Started. To download the entire article please use the following link.

 We look forward to and appreciate your comments.

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How should retailers manage their legacy contracts with SaaS based Contract Management Offerings?

Tuesday, May 18th, 2010

With the release of SafeContract™ Software as a Service offering or hosted software solution we have had many conversations with dozens of retailers as to what is the best way to store and leverage the language or data within existing contracts. My answer has always been the same and that is the identification of your Metadata.

According to Wikipedia Metadata is loosely defined as data about data. Though this definition is easy to remember, it is not very precise. The strength of this definition is in recognizing that metadata is data. As such, metadata can be stored and managed in a database.

When we think about contract management, we need to be thinking about mitigating risk and not necessarily all of the language embedded in a contract. On many occasions this information is listed on addendums or attachments. For sake of simplicity, and this is certainly not an exhaustive list the following twenty items reflect the metadata you might want to hi-lite and set alert targets against in storage of current contracts.

1. Supplier or Seller Information
2. Purchaser or Buyer Information
3. Detail of Goods to be purchased
4. Detail of Services to be purchased
5. Delivery Timeline Details of the Goods and or Services
6. Agreed Upon Price
7. When and where should payments are to be made?
8. Payment Terms 
9. Down Payment Terms 
10. Delivery Dates
11. Delivery Location or locations
12. Risk of Loss or Damage and transfer language
13. Is Assignment of this Agreement Allowed?
14. Detailed Warranty
15. Trademark infringement language
16. Origination Dates
17. Termination Dates
18. Termination Notice
19. Additional Clauses
20. Signature Details

The above should be data that is considered for inclusion during the review process that your solution provider puts in place for you during the early stages of implementation, training and review of your new contract management SaaS offering.

We look forward to and appreciate your comments.

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Where can you find retail 3PL’s? Can they help with e-procurement?

Monday, May 17th, 2010

According to Wikipedia a third-party logistics provider (abbreviated 3PL) is a firm that provides outsourced or “third party” logistics services to companies for part, or sometimes all of their supply chain management functions. Third party logistics providers typically specialize in integrated operation, warehousing and transportation services that can be scaled and customized to customer’s needs based on market conditions and the demands and delivery service requirements for their products and materials.

As such, there are a number of types of SPL’s within retail that may in fact service a single retailer. All might fall under this umbrella including wholesalers such as SUPERVALU, collective buyers such as TOPCO or even a retailer collaborative that may in fact just coordinate aggregated purchases and in fact pick other 3PL’s to provide warehousing, picking and packing and distribution. Each of these providers may in fact provide some or all of the same services and also may all be in play at an individual retailer. The later or collaborative of multiple retailers might even be looked at as a non asset based 3PL.

In all categories of third party logistics providers however it is still the  retailer regardless of size that determines what products they buy and accept delivery of for their stores. As such, it should be no more difficult for smaller retailers to run e-negotiation events?  There will need to be discussions as to costs that are purely associated with the warehousing, slotting, picking and distribution of products by a 3PL once an e-negotiation event has been planned, but these items should be easy to break out for bid or add to the final pricing prior to award of business as a flat fee. This is a practice that all 3PL’s should be familiar with already. Retailers should anticipate that their existing 3PL depending on services offered would rather not have you conduct these types of events as it negatively impacts their volumes with manufacturers and other providers and as such their company’s margins.

Understanding your options and the flexibility that 3PL’s can provide may actually make it easier for all retailers to use e-negotiation tools to impact their bottom line.

We look forward to and appreciate your comments.

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Was the recent e.coli settlement a supply chain problem?

Friday, May 14th, 2010

We have posted many time on the need for a traceable supply chain and the need for better due diligence throughout the procurement process including plant, farm and other source inspections. Keeping this data in a format that is searchable in the supplier vetting process is paramount to mitigating risk to consumers, suppliers, manufacturers and other areas of the supply chain is just to great without it.

Cargill Inc. which is a great agribusiness announced yesterday that they were responsible for the life shattering injuries suffered by Stephanie Smith by eating a contaminated burger in 2007. The parties agreed to settle the law suite and the terms were not disclosed beyond that Cargill agreed to cover her care for the rest of her life.

The debate on food safety continues and as it does drives the need for compliance at all levels of the supply chain from the farm to the table and the capability of tracing finished goods from the consumer to the source in order to. Without these tools issues like this will continue to happen.

We look forward to and appreciate your comments.

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