Archive for August, 2011

Here’s an exceptionally green retail concept. Could a retailer get any more green than this?

Wednesday, August 31st, 2011

The team behind Agropolis, agropolisfarm.com, seems to have the future of green retailing pegged. Agropolis is a retail concept that combines the farm, restaurant and the grocery store in one environment. Imagine walking into Agropolis and purchasing fish and vegetables that were raised and grown onsite then sitting down for a meal prepared using ingredients that were also grown onsite. The concept is interesting and it is also very environmentally friendly.

Where does your produce come from? Is it trucked in from some far away land where the growing process includes pesticides and uses acres upon acres of land? Probably. At Agropolis, they have solved the issue of fresh produce by growing onsite. They have also promised that there will be no use of pesticides. Further, they will not grow their produce in soil. Even the nutrients created by the fish will be reused onsite.

It gets better; the fish that created those nutrients also came from the store’s own tanks. The conservancy efforts also include the lighting used throughout this new concept. They will use the latest in LED lighting.

Personally, just knowing where my produce came from (you would actually see it) would be phenomenal and reason enough to be a happy patron. But the knowledge that my selfish desire for better produce also supported our environment would provide a longer lasting sense of satisfaction.

For more information on Agropolis, please visit their website, agropolisfarm.com. And if you are looking to integrate green technology or processes into your facilities or supply chain, please contact a SafeSourcing Customer Service representative.

We look forward to and appreciate your comments.

“What types of companies find procurement services beneficial?”

Monday, August 29th, 2011

If you’re a business owner, large or small, CEO, CFO, or President of a company you should be asking yourself if your company can benefit from procurement services.  Depending on the size of the organization you may or may not be familiar with all the goods and services that your company is purchasing.  This is where procurement services can come into play! 

According to Wikipedia procurement is “the acquisition of good and/or services.  It is favorable that the goods/services are appropriate and that they are procured at the best possible cost to meet the needs of the purchases in terms of quality and quantity, time and location.”

This sourcing professional believes that if a company were to review at least 10% of their annual spend, they would find many opportunities to improve the bottom line.  Below you will see a few of the times that would be most beneficial to take advantage of procurement services.

  1. 1.Reviewing/Resigning a current contract with an incumbent supplier.  –   If you’ve been with the same supplier for the length of multiple   contracts, it’s time to re-evaluate.  You may not be interested in switching vendors, but by taking advantage of procurement tools you will be able to negotiate a better rate for the goods and services that you’re purchasing.
  2. When you start a new task/department within your business. – Every time your business grows or expands is an opportunity to take advantage of procurement tools.  Even if the goods and services that you’ll need to operate this new department are things you’re currently using, the quantity of these items would be a great opportunity to evaluate how much you’re spending to have the goods and services you’re using on a regular basis.
  3. When you are analyzing you upcoming budget – Each year when your company monitors your profit margin and areas within your budget that cause you concern is a great time to evaluate what procurement services would be beneficial for you.  For example, you may find areas of your business that are critical for your end product or service, but you feel that you are spending too large of a percent of your budget to produce such results. 

Just think of all the different areas you bottom line is affected by.  Each of these is an area for potential savings thru the use of procurement tools.  By partnering with a procurement professional, you’ll be able to evaluate more than a few areas of your business where you can start saving for your next purchase or contract for your goods and services.

For more information on SafeSourcing and how we can help you evaluate your savings opportunities, please contact a Customer Service representative.

We look forward to and appreciate your comments.

A repost to think about, Are you wining your supply chain battle?

Friday, August 19th, 2011

It could be said that much of today’s thought relative to supply chain management is rooted in the history of human expansion. In fact there are many examples of how expansion which many times happened or was planned in conjunction with the conquest of others was either successful or failed based on the ability to keep supplies flowing to the expansionists or armies associated with them. If you are a growing retailer with your own expansion plans some careful thought as to your supply chain and the necessary contingencies may be your most important activity

According to Wikipedia in military science, maintaining one’s supply lines while disrupting those of the enemy is a crucial—some would say the most crucial—element of military strategy, since an armed force without resources and transportation is defenseless.

Obviously this takes us back to our opening question; are you winning the supply chain battle? What would you do today if one or more of your current suppliers were to go out of business or enter bankruptcy (a real possibility)? Have you made plans as to how your company would replace the goods or services provided by these suppliers?

A recent example that may come to mind happened during the recent H1N1 (swine flu) outbreak first detected in the United States during April of 2009? Drug store chains during that time of panic became the first stop for much of the population in search surgical masks or other anti bacterial supplies. Many retailers ran out of stock and many suppliers were unable to meet the increased demand. Most retailers were not sure where else to turn for additional supply based on the increased demand. The trickle down effect of this could have gone on an on well beyond the impact of surgical masks or anti bacterial product shortages.

The obvious follow on question is which back orders would suppliers fill first and where would your consumers go to get them. The answer is probably not at your stores. The obvious reason is because hospitals, governments and large retail companies like Wal-Mart buy more of these products than you do.

Is winning the supply chain battle important? You bet it is! Do you have the right tools in place?  This author believes the answer is absolutely not.

Ask your solution providers how they would help you in a situation like this.

We appreciate and look forward to your comments.

When did sustainability become synonymous with the environment?

Thursday, August 18th, 2011

In this case sustainability has less to do with the environment and more to do with process, discipline and execution. Which can also impact green programs focused on  a company’s carbon footprint

According to Wikipedia a simple definition of sustainability, in general terms, is the ability to maintain balance of a certain process or state in any system. It is now most frequently used in connection with biological and human systems. In an ecological context, sustainability can be defined as the ability of an ecosystem to maintain ecological processes, functions, biodiversity and productivity into the future.

Sustainability has become a complex term that can be applied to almost every system on earth.

From a corporate perspective many investors look at sustainability as a framework for disciplined and responsible management, a key success factor in achieving economic gains.  Relative to e-negotiation this means being able to run the same process (events) over and over again quarter after quarter and year after year as the standard way in which  a company endeavors to improve quality, workflow and compress prices. To the extent that this process supports companies social initiatives relative to the environment and humanity new terminologies such as the term triple bottom line are emerging in discussions at the board level.

The Global Sourcing Council tells us that although sustainability has found its permanent place in corporate boardrooms, execution is still a challenging journey. Implementing sustainability in global sourcing operations becomes even more complex as it creates its own unique challenges.

Global service providers that subscribe to sustainable strategies will benefit by gaining competitive, green advantage with the global organizations.

Ask your e-negotiation service provider how they intend to implement a sustainable program for your company.

We look forward to and appreciate your comments.

Many Mid Tier One and Tier Two retail companies can not afford advanced analytic software! The truth is they also can’t afford to not have it! So what to do?

Friday, August 12th, 2011

Let’s first try to understand what analytics actually is. According to Wikipedia’ a simple definition of analytics is “the science of analysis”. A practical definition, however, would be that analytics is the process of obtaining an optimal or realistic decision based on existing data. Business managers may choose to make decisions based on past experiences or rules of thumb, or there might be other qualitative aspects to decision making; but unless there are data involved in the process, it would not be considered analytics.

So why can’t many companies afford analytics? The answer is because they are complex. In my early days of selling data warehouses with one of the industry leaders, in fact the best in the space today the combination and analysis of data from disparate functional areas of a business were nearly impossible. As such if a company was advanced enough to have this type of information it most likely existed in islands that evolved into departmental data marts like category management systems. These data marts ultimately evolved to complex databases with relational data models that allowed access of data contained in these  disparate systems and then into on line analytical systems capable of managing massive amounts of data .

It’s probably no surprise that the early adopters of these technologies were the biggest of the big companies and governments. So when we get to analytics that support e-procurement systems or procurement systems in general, the systems that provide the analytics have to reside within a company’s corporately supported data model. If not, they initially at least have to have a procurement data model that supports data contained in ERP systems, Financial systems etc. Since the trend is not a backwards direction of recreating islands of information,  pilots of these systems that show significant benefits, will only end up as a corporate roll out through integration within the corporate framework and data model.

I could go on to explain the expense and time associated with these implementations, but there is a reason that these solutions are not readily implemented within lower tier one and tier two retailers. Number one is that many still do not have easily accessible corporate views of data. Number two is the cost; resources and time to implement them are difficult for these companies to justify.

As such there continues to be a need (niche) for providers that understand retail from an operational and financial perspective that know where to look, what to ask for and can assemble, analyze and report on data the old way to support the procurement data requirements of mid tier one and tier two retailers.

We look forward to and appreciate your comments.

Great data discovery drives great results! So what’s required?

Thursday, August 11th, 2011

There are a number of valuable possible sources of information to consider. However don’t make the assumption that just because you have systems with a big sounding impressive name like an Enterprise Resource Planning system or ERP that the data they contain will be complete or clean. That depends entirely on the proper deployment and use of the system as well as its maintenance after the fact.

Here are some but not all areas of opportunity and pieces of information that you should look to. In fact the more of them you have access too the better prepared you will be for a great discovery session.

1) General Ledger
2) Detailed P&L
3) Purchase Orders
4) Contracts
5) Detailed Vendor Listing
6) Product List by Vendor
7) Invoices
8) Product cut sheets
9) Copies of orders
10) Brochures

There is also a strategy of how to use this information to your best advantage and no system will do it all for you.

We look forward to and appreciate your comments.

Hey buyers! The economy is still terrible. Maybe now is the time to finally try reverse auctions.

Wednesday, August 10th, 2011

However, we continue to see a reasonable uptick in the use of e-negotiation tools in retail and this author believes that some of the following quotes from a retail CEO and his team  that watched their first  reverse auction last week may be the reason why.
1. “This was pretty simple to do”
2. “If we hired someone we could do these ourselves with you guys”
3. “This is fun”
4. “You mean the reports are already available”
5. “I love the sports concept”
6. “It was easy to follow the marquis and what was going on from one screen”
7. “The multiple color schemes were great”
8. “I can’t believe how fast you guys set this up”
9. “We saved that much money and only have to pay what we discussed”
10. “Can we do another one today”
11. “I may get a promotion out of this”
12. “I love that calculator at the end of the bid process”
13. “I like all of the supplier data that was accessible during the auction”
14. “Now I know how the big guys get the pricing they do”

Why not join others that have come a little late to the party. You can still benefit because today’s tools are easier to use, more interactive, maintain your attention during an auction, integrate gaming technology to keep it fun and are lower cost than their predecessors. If you happen to have already been doing this for years, why not find an easier way or do it less expensively.

If you would like to have fun, save money and do it quickly, please visit us at www.safesoucing.com.

We look forward to and appreciate your comments.

“How do you know if your waste management programs are being effective?” Measuring Four R’s Program Results

Tuesday, August 9th, 2011

Recently I wrote a series of blogs about the Four R’s of waste management; Reduce, Reuse, Recycle and Rebuy, which went through the basics of each and how your company can take steps to becoming greener.  Today we will be focusing on how to measure the results of your programs for both accounting and PR purposes.

Tons of waste diverted from the landfill – By reusing and recycling products within your organization you are contributing to the reduction of tons of waste which is sent to landfills.  Your recycling partners many times can help track this metric with you.

Amount of disposal costs saved – Every company pays for the disposal of waste.  The less waste produced by your company the less frequently your waste disposal company has to pick up that waste which means lower costs for your company and an accounting bottom-line expense reduction.

Amount of purchase costs saved – Companies that focus on reusing and rebuying product can save millions of dollars when they do not have to purchase new products from vendors.  This is an important metric many companies use to measure the effectiveness of their programs.

Value of materials donated – In some cases the value generated by your waste management programs will be in the manner of credits that directly affect the company’s taxable income.  This is another key measurement factor especially in the recycling focused programs.

Revenues earned – Many programs lead to products that can be sold off to 3rd parties as used inventory.  Revenues earned is a metric with high visibility and importance to many companies’ executive level.

obs created or retained – In an economy where the country’s unemployment rate has been a much-watched indicator, many companies have integrated the number of jobs added or saved due to waste management programs into their corporate reporting.  Many times this metric is tied closely with revenues earned.

Families/individuals/organizations assisted – By donating or recycling products, businesses have the capability to help thousands of schools, families and other organizations with products they would have normally thrown away.  This applies frequently to technical products that the company may have outgrown but that still have useful lives.

These are just a few of metrics you can use to report how effective your Four R programs are doing, both internally and externally.  For more information on the Four R’s  or companies that can help you with processes or programs relating to the Four R’s, please contact a SafeSourcing Customer Service Representative.  

We look forward to your comments.

Beyond price reduction, what other benefits should buyers be aware of when purchasing forklift batteries?

Thursday, August 4th, 2011

Not more than five years ago, warehouse managers were glad to have their scrap forklift batteries removed for free or a core charge refund.

Today warehouse managers have options due to regulatory changes and an increase in worldwide demand for lead.  This gives warehouse manager’s a couple of options for disposal.

One option is to sell it back to the manufacturer.  The customer sends scrap batteries back to the distributor for credits toward the purchase of new batteries.  This is recommended for a customer who will have loads under 44,000 lbs.   Unfortunately, the customer doesn’t get an additional revenue stream or directly profit from increasing lead charges.

A second option would be to sell it through a broker.  Brokers have bulk agreements with smelters and can pay a top price.  They will pay you based on a present Spot Market Pricing of Steel Cased Lead / Acid Battery Scrap and the Quantity of batteries that you want to get rid of.   Additionally, brokers educate the customer on packaging guidelines dictated by DOT.   This makes the implementation of a recycling program much easier. However, the option is only available for loads above a truckload (44,000 lbs.).  

Brokers are really only interested in Flooded Cell Batteries (these are the type of Batteries that have the removable tops where you add water).  They will however take Maintenance Free Batteries and even give you something for them. 

The markets are strong and should be for some time. So no matter which option you choose, now is a great time to start making money on those old batteries.  In fact, run a reverse auction for this and you will be sure that you get the best price for your scrap.

For more information on SafeSourcing and how we can assist your company with sourcing this category or any others, please contact a Customer Service Representative for more information.

We look forward to and appreciate your comments.

Corporate CEO’s & CFO’s don’t have this much trouble with debt ceilings or managing debt.

Wednesday, August 3rd, 2011

Unfortunately politics gets in the way of governments using debt tools properly. Fortunately for the CEO’s of the many companies that fuel our economy they do not have the same difficulty in aligning their growth with the proper use of debt. When CEO’s don’t get it right and don’t manage costs they way they should the result is generally receivership or protection from creditors that allows them to restructure their finances, trim operating costs and get their expenses more in line with their revenues. In most cases this costs the CEO his or her job. It continues to amaze this author that our government has to bicker to the extent they do in order to raise the debt ceiling to drive economic growth and assign accountability to not properly managing the budget.

Companies use a variety of spend management tools in the procure to pay process in order to indentify costs that need to be driven out of their businesses that are a result of poor visibility, mismanagement, maverick spending and other supply chain issues. Our government could do the same thing. Unfortunately as we have all just witnessed politics get in the way. At companies the executives are accountable to the board of directors and share holders. Who is the government accountable to? Oh, that’s right US!

Remember that at the next election.