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Archive for May, 2011

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Here are some leading companies that are serious about Green Energy

Tuesday, May 31st, 2011

Every day we hear about companies going “green” whether it is how they produce their products, package their products, transport their products or how they power the processes to make their business run. 

Solarhomeresearch.com produced the top 20 companies using “green power” with Kohl’s Department Stores and Whole Foods Markets leading the pack with 100% of their electricity coming from green power resources.  Other companies in the top 20 with 100% of their energy being green were; REI, The Estee Lauder Companies, The North Face, Aveda Corporation, prAna, Half Price Books and Origins.  These companies employ a number of technologies to achieve this and this week we will be looking at some of those technologies and the companies that offer them.

Biogas – This type of gas is produced when matter such as manure, sewage or municipal waste is biologically broken down producing a primarily methane gas and carbon dioxide result.  Often referred to as “landfill” gas due to the fact that the decomposition of waste in landfills can produce much of this gas as more and more waste is compressed on top of each layer.  Cow manure is another potential source of biogas with some studies saying that it could potentially be a future source of billions of kilowatt hours of energy.  Capturing biogas can not only provide a new source of energy but in the process of capturing the gases you prevent the escape of those emissions into our atmosphere.

Biomass – Biomass, as the prefix implies, also involves the processing of organic material to create energy.  In this process, natural residue such as dead trees, branches, tree stumps, and other living or recently living organisms is converted to energy typically through incineration much the same way coal or oil is processed.  New processing methods will allow for processing of this material in a way that enable the creation of hydrogen gas which can be used directly as fuel.  Currently the largest plant for biomass processing, the New Hope Power Partnership produces enough power for the plant and almost 60,000 homes, reducing dependency on oil by more than one million barrels per year.

Many companies are beginning to use these technologies today.  For more information about how you can partner with these companies for your sourcing needs please contact a SafeSourcing customer service representative today.

To see the entire Top 20 Company list go to http://solarhomeresearch.com/2011/01/top-companies-going-green-how-to.html.

We look forward to and appreciate your comments.

Posted in Green eProcurement Practices

Troubling Study on Traffic Emissions!

Friday, May 27th, 2011

With the number of tractor trailers required to support our economy, emissions control is becoming a significant issue and socially conscious companies face increasing pressure as to how they plan on or are helping to reduce emissions as part to of their overall carbon footprint reduction.

I was reading an article in USA TODAY  on page 3A of the May 26th 2011 edition By Larry Copeland titled Traffic emissions blamed in 2,200 deaths. The article sited a study by The Harvard Center for Risk Analysis that states congestion in the USA’s 83 largest urban areas last year led to more than 2,200 deaths and a related public health cost of $18B. WOW!

There certainly is a lot to think about here.

We look forward to and appreciate your comments.

Posted in Green eProcurement Practices, Sourcing Safe Products

If you treat suppliers fairly and openly they will continue to participate in your strategic sourcing events.

Thursday, May 26th, 2011

We regularly conduct surveys as part of our SOP when we have completed an online e-RFX. These surveys are pivotal to ensuring that participants in our customer’s events were treated fairly. What our suppliers have told us makes events successful for them and would encourage them to participate again even if they did not happen to be the low bidder in a particular event is that this is an educational process for their company and ultimately becomes a way to do old things in a new way. To a company our suppliers encourage the following. Openly communicate with all suppliers and make sure they understand everything and are completely comfortable with specifications, terms and conditions, quoting instructions etc. Take the time to be complete even if they have participated in the past. Make sure they have no questions.
 
Here is a sample list of questions that should be considered when inviting or encouraging suppliers as  participants.

1. Does the supplier understand that there is no cost to them to participate?
2. Do they understand they will be trained at know charge?
3. Do they understand event timing and requirements?
4. Does the supplier understand the terms being used and how they apply to a strategic sourcing event such as?
a. Current Price
b. Reserve Price
c. Index Price
d. Mixed price evaluation
e. Low Quote
f. Low quote indicator
g. Last entry indicator
h. Funds
i. Terms
j. Notes
k. Extensions
l. Matching quotes
m. Event  rules
n. Product specifications
o. Samples
p. Award of business

At the heart of it, this is common sense. Treat others as you would like to be treated. Unfortunately many companies don’t always follow this practice and as such, it negatively impacts the sustainability of their strategic sourcing program.

We look forward to and appreciate your comments.

Posted in B2b Supply Chain, Business Sourcing, Sourcing Strategy, Strategic Sourcing, Supply Chain Procurement

How to insure the sustainability of e- RFX events for your customers.

Wednesday, May 25th, 2011

If you follow these simple guidelines it will also encourage senior management to consider placing more of the companies spend under the umbrella of e-procurement tools and specifically reverse auction tools.

Once you are armed with a robust retail focused supplier database and related e-procurement tools:

1. Conduct a detailed category discovery
    a. Learn all there is to learn about the customers way of doing business.
    b. Walk, observe and annotate all activity at distribution centers and   warehouses.
    c. Walk an array of stores and review 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 during the next year or cycle.

I’m sure you can fill in a few more items prior to your launch, but the key is to have a plan and to write it down. Now you do.

We  look forward to and appreciate your comments.

Posted in E-procurement, E-procurement Solutions, E-procurement Tools, E-supply Chain, Sourcing Strategy, Strategic Sourcing

Managing Your Workforce with Sourcing Processes

Tuesday, May 24th, 2011

The May issue of RetailSolutionsOnline.com has an article by Erin Harris about the shift that is occurring in the retail industry “from focusing on labor just as a cost center to viewing their labor pool as a valued asset to drive customer centricity.”

When you think about all of the elements that contribute to the employee life cycle, you begin to see many opportunities for creative sourcing that can allow a retailer to really get the most out of their workforce.  Today we will be looking at a few of these to better understand how they can be positively affected by a good sourcing strategy.

Recruiting – The process of recruiting employees is such an important first step in getting the right employees for your business.  With so many local, regional and national players in the recruiting space and because so many retailers have the recruiting process happening in different ways all over the company, this is a spend category that may initially begin as an RFP.   A quality RFP can not only help to understand the offerings of the vendors themselves but also to help you collect and understand what your own company is doing in this area.

Task Management – Some categories such as Task Management solutions are a little more focused and understanding the side-by-side features as well as how your company is handling the process is a little easier.  As a result, Task Management may a little easier sourced and is something that a strong competitive bid collection to compress the vendors’ pricing is all that is needed.  If it makes sense, this is a good path to follow because it allows you tighter, more competitive pricing, provides a detailed list of where these prices are coming from as well as a realization of savings and services that can start within weeks of the event.

Performance monitoring – One thing that is often overlooked in the process of improving the management of your workforce is the overseeing channel that monitors how you and your company and employees are doing.  Understanding the options for Customer Satisfaction monitoring and how they should be integrated into your WFM processes are important pieces to this puzzle.  These services can be sourced as many of the other items of your business are and should be part of how you evaluate how your associates are handling your customers.

Regardless of which pieces of the employee lifecycle you choose to address first in improving your workforce management, know that there are companies who can help you research and collect the information you need to make the most out of your selection decisions.

For more information on SafeSourcing and how we can assist with this process, please contact a Customer Service Representative for more information.

We look forward to and appreciate your comments.

Posted in Sourcing Strategy, Strategic Sourcing

Sourcing professionals are you strategic even if your company is not?

Friday, May 20th, 2011

There are quite a number of educational sites that procurement professionals can visit in order to educate themselves as to best practices (I hate that term), strategy development, execution management and reporting. Some companies refer to themselves as e-procurement companies, some as reverse auction companies and others as strategic sourcing companies. Most will have an outline as to their implementation ideas somewhere on their website. It might be in a WIKI, a blog archive or in a products and services tab. The point is you can probably find one pretty easily and most likely it is better than what your company already has in place.

Typically the proof is in the pudding, which is to say there are many tools out there, but the services delivery model and what it is based on will be what determines how strategic you become if you follow it. I like to break the tools and services into three areas which are;

1. Analyze
2. Assess
3. Source

These areas can then be expanded to support most strategic platforms tools and services.

If your company is not particularly strategic, it does not mean that you can’t be. Who knows, you might event get noticed.

We look forward to and appreciate your comments.

Posted in Sourcing Strategy, Strategic Sourcing

Why should procurement professionals use on demand software (SaaS) for their e-procurement needs?

Thursday, May 19th, 2011

On demand software or SaaS (Software as a Service) by its nature is an internet based application and as such is accessible from wherever you happen to be as long as you have a network connection. With today’s broad band offerings that literally means anywhere. So the first rule of thumb is that it provides easy access. In addition, since most of the newest versions of SaaS applications are native web based applications, they integrate very nicely with most office infrastructures. With Microsoft being the most deployed environment, data is easily exported or imported to formats that comply with their standards. In many cases these tools can also be made 100% available to you within days of contract signature

Most of us have horror stories about when our PC, Network, Application etc. went down and we were not able to complete tasks at work. When we call our internal service department, the response is normally less than what we would like or hurry up and wait. With a hosted software application, it is the responsibility of the SaaS provider to maintain the application. They know up front that if they don’t do a superior job of support and availability, that you the customer can go somewhere else to find a provider that will. This is not the case with internally installed corporate applications.

Your data at a SaaS provider is also often more secured than the data at your corporate office. Since this is the core business of a SaaS provider, the architecture of the application normally has multiple levels of redundancy, failover recovery and is backed up regularly.

Typically, SaaS applications are easier to change than traditionally installed corporate applications. There are not as many feature upgrade charges with every point release in a SaaS environment because the provider needs to provide these features to continue to attract new customers and to keep up with the pace of the industry.

Finally, the total cost of ownership is much quicker in a SaaS environment than traditional application software installations. In fact there are many stories ROI’s with your first series of e-procurement events exceeding an entire year’s investment by greater than 10X.

We look forward to and appreciate your comments

Posted in Business Sourcing, E-procurement Solutions

What’s up? Is it possible to save money on anything in this market?

Wednesday, May 18th, 2011

If you had the tools to check all of the market indices, they are all up or headed up. Fuel, pulp, resin, metals, beef, grain and the list goes on. Many are up double digits over the last year and headed higher still. As such, your suppliers will be increasing their prices to you.

It is in this environment that procurement professionals are being asked to take cost out of the business or at a minimum hold costs flat. The question is how?

To begin with, even in up markets there remains significant opportunity for cost reduction and other savings. This does not apply to every category or to every product within a category, but there are opportunities.

Here are some things for procurement professionals to consider as they embark on this journey. All of these can provide clues that will help you map your way through today’s markets.

1) Review the last time all products or services were sourced in detail?
2) Review the dates on all current contracts?
3) Are there additional suppliers that are interested in your business?
4) Review all Terms and Conditions to uncover hidden opportunities.
5) Have your volumes increased or will they?
6) Will a longer term increase discounts?
7) Leverage freight and shipping terms? 
8) Use indices and escalator language to control price increases.
9) Understand what drives the pricing of the product or service you are buying.
10) Aggregate your volumes with other companies.
11) Reach out to procurement providers that have the expertise to help you.

If you can’t come up with at least another 10 items to add to this list of more than 3 of the items above did not occur to you, it’s time to reach out for some help.

The reality is that prices are always going to go up over the long term. The other reality is that there are companies that are still saving or holding costs. The reason is because they plan better than most and ask for help when they need it.

We look forward to and appreciate your comments.

Posted in Business Sourcing, E-procurement Solutions, Procurement Solutions, Reverse Auction

Knowing Who Your Suppliers Are – Onsite Visits – Part II of II

Tuesday, May 17th, 2011

Last week I posted a blog about the importance of onsite visits with your suppliers, how to prepare, what to look for, and the value of performing these visits.  This week we will be taking a look at some of the additional things that you need to think about when visiting a supplier in another country.

Visits to international sites will need to encompass the same types of information gathering as a domestic one such as reviewing the cleanliness of the facilities, observing production, logistic and storage processes, but there 3 important areas that must be considered in addition to these that may determine the success or failure of the visit.

Language – Assuming you are visiting a supplier that is not located in a predominantly English-speaking country, the capability to communicate onsite is an important one that should be addressed well in advance of the visit.  Many times the supplier will have staff that is fluent in more than language and can act as an interpreter, however procuring your own interpreter is also a suggestion and possibility. Also, some basic considerations of your own communication style would be to speak more slowly than usual and pause in between sentences to be understood more easily.

Culture – This is an important area to prepare for because in some countries seemingly minor things can create a tense atmosphere.  Determining whether to bow and the details surrounding when and how, if the country shakes hands when they greet and which hand they shake with are all important items in some countries and should be learned prior to your visit.  On the other hand, it is equally important to note the things that are normally unaccepted behaviors in the U.S. which many times are not viewed the same way in other countries.  Americans would generally never answer a phone call in a meeting or show up to an appointment late, but in other countries these behaviors are far less important and frequently occur during the course of doing business.

Capturing the details – Visits to international suppliers generally come with a price tag that is not insignificant to your company, so capturing as much data as possible is important on these visits.  Wherever you go during your visit take a notepad and camera with you to record what you see and hear while on the visit.  Many manufacturers will allow you to take occasional pictures as long as you ask in advance and have it cleared.  Some may not allow it and others may allow it as long as no employees are included in the pictures.  Capturing these details will be very useful to you and your team in the future and can potentially save trips for other employees in the future.

Onsite visits to your suppliers are incredibly valuable and important to your organization and are a terrific tool for knowing who your suppliers are and how they do business.  They are also important forums to gather details necessary for later contract negotiations.

We look forward to and appreciate your comments.

Posted in B2b Supply Chain, E-supply Chain, Strategic Sourcing, Supply Chain Procurement

Lean business practices create a weighty issue.

Monday, May 16th, 2011

These author tires of the desire of businesses that are trying to reinvent themselves and in so doing constantly coming up with new buzz words, industry terms and business jargon in order to try and prove that they are thinking differently and as such should be trusted to be on the right path. Maybe their original business plan was just flawed and they are not deserving of our trust.

Lean in any functional area of a business simply means producing more or getting more done with fewer resources. I’m not sure this is a great message for companies that are just launching, trying to grow or improve. If you’ve been around for while, and your customer reads between the lines properly, this may just mean that you did not plan your launch properly or react properly to market indicators in the past.

We all know that lean practices were originally a move to reduce costs in the manufacturing process and since it worked for manufacturing where we are typically talking about thousands if not millions of pieces and parts, other companies began to think why not for our business. As such let’s apply the term lean to the supply chain or the procurement space. Any one that knows the procurement space already understands the lack of resources.

The goal of every business should be to provide the end user or customer with what they want or what you have promised them at a fare price. If you do so, that customer and others that hear about that customers experience should buy more. When this happens, if the business plans appropriately they should grow and grow profitably. And this should create new and sustainable jobs. So, how is this any different than the way businesses were run 50 years go or 100 years ago? The truth is that it’s not.

The decision to not hire, to try and do more with less and to reposition resources rather than firing someone is a better way to run a business. Unfortunately they do not teach this in business school. This author has been through many mergers, acquisitions, downsizings and the like over a lengthy career. One thing you can always count on in these scenarios is let’s cut expenses. You can call it lean, but it’s not.

So, let’s not hide behind the term lean or other business jargon or buzz words.

We look forward to and appreciate your comments.

Posted in E-supply Chain, Procurement Solutions, Strategic Sourcing, Supply Chain Procurement

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