Is there benefit to a large retail supplier database?

February 2nd, 2011

How should companies use the data from these sources to support increasing their spend put through e-procurement tools such as reverse auctions?

Reviewing why retailers do not have continuing success when running prior e-procurement events over again, one area of commonality is a lack of new suppliers. Another is the price being too high for the same event that has already been built and will result in lower savings the 2nd and 3rd time around.

There is a proper way to insure the sustainability of your reverse auctions going forward. Following these guidelines will also encourage senior managements consideration of placing more spend under the control of e-procurement tools and specifically reverse auction tools.

Once you are armed with a robust retail supplier database and related tools such as  the SafeSourcing® SafeSourceIt™  tool set:

1. Conduct a detailed category discovery
    a. Learn all there is to learn about the retailers way of doing business.
    b. Walk distribution centers and warehouses
    c. Walk an array of stores and understand all formats of the enterprise.
    d. Compile a list of all corporate categories
2. Rank categories by
    a. Total spend
    b. Importance
    c. Sourcing frequency
    d. Quality objectives
    e. Look for aggregation opportunities
        i. Lighters, lighter fluid, flints, fire sticks.
3. Conduct supplier discovery
    a. Rank suppliers
        i. Size
        ii. Experience
        iii. References
        iv. Environmental certifications
        v. Safety Certifications
4. With all of the above in hand; develop a three year game plan
    a. Identify suppliers for each event over the three years
    b. Develop savings targets by category
    c. Develop a three year time line  for all categories
5. Role Play internally  the first year for a test category
    a. Ask the following questions
        i. How will you award the business
        ii. Review alternate scenarios
        iii. Review savings by scenario
        iv. Determine which suppliers will be invited back
        v. Determine what new suppliers from your database search will be   invited next year

We look forward to and appreciate to your comments.

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