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Archive for August, 2010

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Mr. President if you want to create some more jobs, hire some more FDA inspectors.

Tuesday, August 31st, 2010

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

Procure to Pay analysis requires careful planning Part II of II.

Monday, August 30th, 2010

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

Procure to Pay analysis requires careful planning Part I of II.

Friday, August 27th, 2010

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

How do you recall an egg or any product for that matter?

Thursday, August 26th, 2010

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

What type of eggs are you buying?

Wednesday, August 25th, 2010

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

Eggscuse me. How much productive time are we losing from this recall?

Tuesday, August 24th, 2010

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

A blog we repost quite often.” Twenty Five-steps to running high quality e-procurement events”.

Monday, August 23rd, 2010

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

So, just what is a retail market exchange?

Thursday, August 19th, 2010

Quite honestly this is a fairly complex question so the answer is not simple. To begin with let’s take a look at just what a market (retail) exchange is.

One of the earliest exchanges in the retail space was called the Retail Exchange which was sponsored by some very large retailers and is still available today from a company that bought the system from its retailer sponsors. As simply as possible, a  Market (Retail) Exchange  is a business to business or B2B E-commerce platform that allows Suppliers, Resellers, and their customers or buyers to offer, purchase and manage their goods and services in a simple and effective way. Typically an organization must be a member of the exchange in order to participate. Once a member the organization can then conduct business with other organizations by establishing on line connections with each other. Typically exchanges are a shared hosting environment and in some cases for very large companies dedicated server implementations. In recent years exchanges have migrated to SaaS or software as a service models in order to address wider markets.

The success of an exchange is based on the number of suppliers or resellers that belong to it and their willingness to participate with a retailer for their business. The activity is more of hands off approach once your offer is posted that can include punch outs to a supplier’s website and catalog services for sourcing of products.

From my perspective I like the personal touch of the historical RFX process in the form of a SaaS full service offering that actively engages new sources of supply and sells them on wanting your business.  There is a much smaller investment from both a financial and resource perspective. If you want to learn more about the RFX process please visit SafeSourcing Blog archive or the SafeSourcing Wiki.

We look forward to and appreciate your comments.

Posted in B2b Reverse Auction, B2b Supply Chain, E-procurement Solutions, Online Procurement, Procurement Outsourcing, Procurement Solutions, Retail Supply Chain

Sourcing prescription drugs gets easier all of the time.

Wednesday, August 18th, 2010

This was the case years ago, but with the advent of many of the internet based prescription drug sites such as RXlist, Drugs.com and many retailers sites, it is easy to find lists, formulations, directions, dictionaries and generic equivalents. What more could a Pharma buyer ask for. Now all you need to do is use your e-procurement solutions provider to drive your costs down.

According to RXlist, the top twenty prescription drugs in the U.S. are as follows.

1. Lipitor
2. Hydrocodone / Acetaminophen  
3. Hydrocodone / Acetaminophen  
4. Levothyroxine sodium  
5. Amoxicillin  
6. Lisinopril  
7. Nexium  
8. Synthroid  
9. Lexapro
10. Singulair
11. Plavix
12. Simvastatin
13. Hydrochlorothiazide
14. Amlodipine besylate
15. Azithromycin
16. Warfarin sodium
17. Furosemide
18. Azithromycin
19. Levothyroxine sodium
20. Advair Diskus

It’s never been easier to drive down your costs.

We look forward to and appreciate your comments.

Posted in E-procurement Solutions, Sourcing Strategy, Strategic Sourcing

How sustainable is your supply chain?

Tuesday, August 17th, 2010

WELLINGTON, New Zealand.  According to the Associated Press A crate of Scotch whisky that was trapped in Antarctic ice for a century was finally opened today. But the heritage dram won’t be tasted by whisky lovers because it’s being preserved for its historical significance.
 
The crate, recovered from the Antarctic hut of renowned explorer Sir Ernest Shackleton after it was found there in 2006, has been thawed very slowly in recent weeks at the Canterbury Museum in Christchurch on New Zealand’s South Island. 7ed2fe14-e7cb-4557-bef1-43c8709d9217

 

Your comments might be even better if we could enjoy some of this together. This author has had 50 year old Scotch, but never anything this old.

We appreciate and look forward to your comments

Posted in Supply Chain Procurement

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