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Archive for August, 2010

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Retailers; how much are you really saving with reverse auctions and other e-procurement tools.

Monday, August 16th, 2010

Further more; your buyers can not save you as much as you might save if you used these types of tools. So when and if you do, make sure you measure and understand the true savings.

There are all sorts of e-procurement companies. Not all focus only on retail. However, all of them have web sites and all of the web sites tout savings that are all over the map. The question is what type of savings are they talking about. Following are some of examples.

1. Total low quote savings.
2. Total low quote company savings.
3. Total savings awarded companies.
4. Total realized savings.
5. Total savings versus budget period to date.
6. Total category savings.
7. Total savings year to date.
8. Total annual realized savings.
9. Total potential savings.

Companies really have to be specific as to what they ask each company relative to savings opportunities and make sure they have a formula in place for calculating savings over the course of the contract period for which the products are being sourced. There are all sorts of missed opportunities associated with actual event based low quote savings that can be created by lengthy review periods, delays in sample evaluation, extended award time periods, delays in contract dates, switching costs within the finance department, delays in shipping, specifications not being matched and specification creep that results in adding more expensive non specified items.

The bottom line is that you may have had low quote savings of 28% and that’s great. You may have had net realized savings of 18% and that’s great too. However if you don’t have a plan as to how you will measure savings you won’t know what caused the leakage and it can’t be fixed.

We look forward to and appreciate you comments.

Posted in B2b Reverse Auction, E-procurement, E-procurement Solutions, E-procurement Tools, Eprocurement Auction, Online Reverse Auction, Reverse Auction, Reverse Auction Procurement

Retailers are you aware of EcoLogo?

Friday, August 13th, 2010

About Ecologo

Twenty year old EcoLogo was founded in 1988 by the Government of Canada but now recognized world-wide, EcoLogo is North America’s largest, most respected environmental standard and certification mark. EcoLogo provides customers – public, corporate and consumer – with assurance that the products and services bearing the logo meet stringent standards of environmental leadership. EcoLogo certifies environmental leaders in over 120 product and service categories, helping customers find and trust the world’s most sustainable products.

The EcoLogo Program is a Type I eco-label, as defined by the International Organization for Standardization (ISO). This means that the Program compares products/services with others in the same category, develops rigorous and scientifically relevant criteria that reflect the entire lifecycle of the product, and awards the EcoLogo to those that are verified by an independent third party as complying with the criteria.

The EcoLogo Program is one of two such programs in North America that has been successfully audited by the Global Eco Labeling Network (GEN) as meeting ISO 14024 standards for eco-labeling.

Do your part and hold your suppliers accountable EcoLogo certification.. To learn more please visit the EcoLogo website.

We look forward to and appreciate your comments.

Posted in Green eProcurement Practices

This is part III of Tuesday’s post neither a leader nor a follower be.

Thursday, August 12th, 2010

Due to consumer concern about the toxic effects of BPA, Japanese manufacturers voluntarily reduced the use of BPA in packaging between 1998 and 2003.

They replaced EXR coating with PET film lamination on the inner surface of cans or used an EXR paint that had much less BPA migration into food instead.

And following these reduction and replacement moves, a team of assessors claim that virtually no BPA is found in canned foods and drinks in Japan now.

I hope everyone caught the fact that this was done between 1998 and 2003 and we are still discussing this problem six years later. The fact is that some of the same companies we are speaking of also sell products in Japan.

So what might enlightened leaders do? Following is a very high level less than all inclusive examples.

1. Accept the fact that there is a problem.
2. Conduct research from other sources such as Japan that have eliminated BPA leakage.
3. Author a plan to replace existing products with new ones that are safer.
4. Willingly incur the added expense to retool processes and manufacturing products that are required to support the change.
5. Author a marketing campaign to tell consumers what you have done on their behalf relative to product safety.
6. Let consumers know what your competition is not doing.

A leader behind this plan might in fact increase market share and also sleep better at night.

We look forward to and appreciate your comments.

Posted in E-procurement, Sourcing Safe Foods, Sourcing Safe Products

This is part II of yesterday’s post neither a leader nor a follower be.

Wednesday, August 11th, 2010

As a refresher, this author used the following example of less than stellar industry leadership during yesterdays post. I was reading an article recently Titled “Firms aim to fight BPA ban” by Lyndsey Layton of the Washington Post. A quote from the article that follows speaks volumes to the lack of leadership in solving this problem. “Frustrated industry executives huddled for hours Thursday trying to figure out how to tamp down public concerns over the chemical bisphenol A, or BPA”. You have to be kidding me.

So, let’s dig a little deeper into this article and suggest how industry leaders should be looking at this as an opportunity and how they can help buyers from all companies  source products that are safer and have a better impact on the environment instead of continuing to follow the same practices they have been since the 1950’s.

The firms we are talking about are manufacturers of canned beverages and foods. This includes well known industry giants. A sampling of the creative strategy  they came up with was based on the believe that they needed to have a legislative approach (lobbying) and a grass roots outreach to mothers and students between the age of 21 and 35 from someone in the age group. They also considered using fear tactics or telling consumers you will have to pay a higher price for these products. I won’t go on. Simply stated this is poor leadership based on a traditional business model with very little thought as to anything other than business as usual. At the end of the day, the product is not safe and needs to be replaced or outlawed.

Last year, scientists from the US National Toxicology Programme said that effects on reproductive development from BPA in packaging cannot be ruled out and a study released last year by UK scientists linked the chemical to diabetes and heart disease.
This is in addition to the 100 other studies that have found the chemical to be an endocrine disrupter or damaging to behavioural and neural development.

Michael Brown, President of chemical consulting firm StrategyMark said, alternatives such as acrylic, polyester, and polypropylene are worthwhile exploring in a number of applications such as non-packaging water sports bottles, baby bottles, water dispensing bottles, appliance containers (e.g. food processors), etc.

Of course it makes sense, but even a consulting firm that supports this industry won’t come right out and say this is a required and mandatory action.

Tomorrow in Part III of this post we’ll take a look at how another country dealt with the same issue.

We look forward to and appreciate your comments.

Posted in E-procurement, Sourcing Safe Foods, Sourcing Safe Products

Let’s revisit an updated post from last year titled “Neither a leader nor a follower be”.

Tuesday, August 10th, 2010

With BPA back  in the news and chief executives leaving  the biggest companies in the world let’s take a look at what we would all like to see or not see from our leaders.

Middle of the road does not work. The same old same old does not work. The pace with which change occurs today requires companies to be able to turn on a dime. For that leadership is required. Not leadership that only looks at the bottom line. We require leadership that creates and innovates to both your benefit and that of the global community.

The leadership this author is speaking about is visionary actionable leadership. Not reactionary leadership. We need leadership that looks at the sate of their company and its products as well as the needs of the community at large and in offering their solution to the collective problems faced by these entities, does it better, faster, cheaper and for the general good. This is more about walking the walk before any one else does because it is the right thing to do. If these represent the guiding principles of a company, the money part will follow. This is not something that can be learned or taught in business school.

According to Wikipedia, leadership has been described as the “process of social influence in which one person can enlist the aid and support of others in the accomplishment of a common task”.

A second definition which I like better and is more inclusive of followers comes from Alan Keith of Genentech who said “Leadership is ultimately about creating a way for people to contribute to making something extraordinary happen.

As an example of less than stellar industry leadership, let’s look at a recent news article on a subject this author has posted about on a number of occasions “BPA”. I was reading an article recently Titled “Firms aim to fight BPA ban” by Lyndsey Layton of the Washington Post. A quote from the article that follows speaks volumes to the lack of leadership in solving this problem. “Frustrated industry executives huddled for hours Thursday trying to figure out how to tamp down public concerns over the chemical bisphenol A, or BPA”. You have to be kidding me.

In tomorrows post let’s dig a little deeper into this article and suggest how industry leaders should be looking at this specific opportunity that has now grown beyond can linings and plastic bottles; and how they can help buyers from all companies source products that are safer and have a better impact on the environment instead of continuing to follow the same practices they have been since the 1950’s.

We look forward to and appreciate your comments.

Posted in Business Sourcing, Sourcing Safe Foods, Sourcing Safe Products

Retailers should run more RFI’s, particularly for new products or services they have not sourced before.

Monday, August 9th, 2010

According to Wikipedia and others a Request for Information (RFI) is a standard business process whose purpose is to collect written information about the capabilities of various suppliers. Normally it follows a format that can be used for comparative purposes.

So a Request for Information (RFI) is primarily used to gather information to help companies make a decision on what steps to take next. RFI’s are therefore most often the first stage in the procurement process particularly with new sources of supply. They are used in combination with: Requests for Proposal (RFP) and Requests for Quote (RFQ).  In addition to gathering basic company capabilities and information, an RFI is often used as a solicitation sent to a broad base of potential suppliers for the purpose of preparing a supplier’s thought process in preparing for a Request for Proposal (RFP) and a or a Request for Quote (RFQ).

Much of the data required for an RFI is generally available and can be found on company websites, U.S. Security and Exchange Commission (SEC) filings for publicly traded companies in their Edgar system, industry guides from companies like Trade Dimensions, or from sources like Dun and Bradstreet.

The challenge for most companies is that they do not have the necessary resources to complete this research. Therefore providers of supplier data should be able to make this data available in templates that companies can begin with. Simple data should always be available in any database as to Company Name, Annual Sales, Product category expertise, contact information, e-procurement experience and product specifications. This data should be easily exportable to a variety of formats such as MSFT Excel.

A simple request of your e-procurement supplier should get you well on your way to completed RFI’s that lead to quality RFP’s and RFQ’s without spending a lot of your valuable time on basic research. If they do not, we’d be glad to hear from you.

As an example, we recently completed and RFI for a customer where 18 suppliers were invited to participate and after evaluation and scoring only 8 were invited to the final RFQ. Much of the data was already available in our SafesoureIt™ supplier database and only required verification from suppliers. The entire process took less than two weeks.
We look forward to and appreciate  your comments.

Posted in E-procurement Solutions

I’m heading back to Cape Cod for a week. Maybe I should not be eating the fish.

Friday, August 6th, 2010

Do you ever wonder where the sea and lake food that you eat comes from and whether or not it is safe to eat? Are the seafood buyers at your local grocery or restaurant concerned for you?

Almost three years ago during my first post I promised that The SafeSourcing Blog would call attention to and comment on safety concerns within the global supply chain that may impact your customers, employees, families and other stake holders. I’m sure like me; many of you have been impacted by safety inconsistencies in our supply chain. Personally I have had issues like this impact me, members of my family and my pets.

I recently was watching a little snippet from YouTube attributed to ABC News about the origin and quality or lack there of regarding seafood we consume. As a kid growing up on the east coast near Cape Cod I kind of always assumed that all fish was fresh fish from our Atlantic, Pacific and Gulf waters. Well today, more than 80% of our seafood comes from foreign countries such as Thailand, Indonesia, China and Costa Rica to name a few. Of this, only 1% is tested by the FDA and most of it fails inspection because it includes chemicals, poisons, antibiotics and other additives and is even in some cases farmed in unsanitary conditions. The primary reason for the import to locally fished discrepancy is as you might suspect; price.

This author would hope that all seafood and lake food buyers for our restaurant and grocery chains would ask their suppliers a few of simple questions.
 
1. Where is the seafood you are selling us coming from?
2. Where will the incoming shipments be tested before you deliver it to us?
3. Is it safe for our consumers to eat this fish?

If the answer is not to your liking and documented, don’t buy it. Your consumers will thank you.

We look forward to and appreciate your comments.

Posted in Sourcing Safe Foods, Sourcing Safe Products

When is the right time for retailer buyers to run reverse auctions?

Thursday, August 5th, 2010

Just because you need to buy a product or service does not mean that you will receive the optimal price for that product. For certain products there are better times to run e-procurement events and if you miss that opportunity by even a couple of weeks the lost savings could be astronomical.

Some consumers give this considerable thought when they buy products like cars, computers, televisions, furniture and even certain food products. Retail buyers should be doing the same. If you are the poultry buyer planning for Thanksgiving, you do not want to be buying your frozen turkeys in July and quite frankly if you buy them in March you are probably going to miss out on some savings. The same could be said for just about any type of fresh produce. You can certainly get everything in today’s world at any time of year, but there are better times to do it than others.

A couple of tangential examples that require careful thought would be landscaping services and snow removal services for store parking lots and distribution centers. The services for the most part may be provided by the same suppliers. The optimal time to source landscaping may be the month of March while the optimal time for sourcing snow removal services may be September. These months also mark the beginning and end of the respective service seasons for each service. Even though you may get the service from the same provider, keeping the services separate leaves the leverage with the retailer when you source the other service for the upcoming season. This is also the time when the suppliers are looking for business that will sustain them through the upcoming season as another winds down.

Make sure you ask your e-procurement solutions provider to assist you with the apropriate timing to source your goods and services.

We look forward to and appreciate your comments.

Posted in E-procurement, E-procurement Solutions, E-procurement Tools, Online Reverse Auction, Procurement Auctioning, Reverse Auction, Reverse Auction Procurement

What the? BPA is found in cash register receipts.

Wednesday, August 4th, 2010

My first post relative to BPA was on November 8th of 2008 as part of a two part post and my last was on July 10th of 2010. As you might imagine there has not been much progress by the FDA in eliminating the use of this chemical building block from our products in the United States.

As a refresher the SafeSourcing Wiki defines Bisphenol A (BPA) as a chemical building block that is used primarily to make polycarbonate plastic and epoxy resins. Polycarbonate plastic is a lightweight, high-performance plastic that possesses a unique balance of toughness, optical clarity, high heat resistance, and excellent electrical resistance. Because of these attributes, polycarbonate is used in a wide variety of common products including digital media (e.g., CDs, DVDs), electrical and electronic equipment, automobiles, sports safety equipment, reusable food and drink containers. For many years, polycarbonate plastic has been the material of choice for baby bottles and many reusable water bottles as well as many other products. Bisphenol is the subject of much debate as to its safety as to its safety in food containers particularly baby bottles.

Now according to The Environmental Working Group two-fifths of the paper receipts tested by a major laboratory commissioned by Environmental Working Group were on heat-activated paper that was between 0.8 to nearly 3 percent pure BPA by weight.

This is a potentially larger issue than even the baby bottle issue as virtually anyone that buys a product at any store in this country touches a receipt.

For your education below are the links to several of my prior posts.

1. Part I of II. Reexamining BPA Bispenol A in North America
2. What procurement professionals need to know about purchasing products that contain Bisphenol A or BPA
3. We-need-to-avoid-bisphenol-a-or-bpa-and-retailers-need-to-avoid-offering-products-that-contain-it/

We hope you find this information is useful. Please do your part and buy product that do not contain BPA.

We look forward to and appreciate your comments.

Posted in Sourcing Safe Foods, Sourcing Safe Products

Retail buyers need to think individually and act collectively in their e-negotiations.

Tuesday, August 3rd, 2010

This is as true for e-negotiation events as it is for personal negotiations. The question is how the tools you are using allow you the flexibility to do so.

I was reading an article in the USA TODAY on Friday July 30th by Jillian Berman titled “Negotiate your way to savings”.  The lead in was Cable TV, cell phone bills are ripe for cutting. This author would add the following; so is everything else.

So what is a negotiation? According to Wikipedia, negotiation is a dialogue intended to resolve disputes, to produce an agreement upon courses of action, to bargain for individual or collective advantage, or to craft outcomes to satisfy various interests. It is the primary method of alternative dispute resolution.

In terms of our discussion and the article we are talking about pricing and services. The article goes on to suggest what they call tenacious bargainers tips. Two of the tips are; don’t be afraid to complain and negotiate away extra fees up front.

Retail buyers need to do the same and the ability to think individually and act collectively when they develop the specifications and rules of their e-negotiation events. What would you ask for if you were buying this product or service for yourself and then be just as aggressive when it comes to your department and company?

We look forward to and appreciate your comments

Posted in Business Sourcing, Online Procurement, Strategic Sourcing

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