Archive for September, 2011

When developing your terms and conditions don’t forget the potential for BARTERING!

Thursday, September 29th, 2011

According to Wikipedia: Barter is a method of exchange by which goods or services are directly exchanged for other goods or services without using a medium of exchange, such as money.[1] It is usually bilateral, but may be multilateral, and usually exists parallel to monetary systems in most developed countries, though to a very limited extent. Barter usually replaces money as the method of exchange in times of monetary crisis, such as when the currency may be either unstable (e.g., hyperinflation or deflationary spiral) or simply unavailable for conducting commerce.

There are a number of companies that primary business model is to use bartering in part as their engagement model. Although the model is slightly different at each organization, the general theme is that a company can trade excess inventory for just about any category and receive credits that can be used in part to buy or acquire other products and services that they need for their business. An example might be to consolidate and eliminate backroom stock in retailer’s stores in exchange for credits and use those credits to buy supplies that are regularly used such as paper or plastic bags etc. This process can also have a positive impact on shrink as well as preserving cash.

A unique use of this process that I recently read about in the Arkansas Democrat Gazette discussed a company agreeing to pay for building renovations if they had their current contract extended. The article by Debra Hale-Shelton titled UCA trustees call off audit of vendor bid. The legality of this transaction is in question, but it is in fact a form of Barter.

If you are going to consider barter as a payment or terms option, make sure you understand its use and that it is an above board part of negotiation that is well defined in your terms and conditions.

We appreciate and look forward to your comments.

Sourcing Loss Prevention Categories

Monday, September 26th, 2011

What are some of the ways to actively use sourcing tools to help reduce your company’s loss?”

The state of the world economy is not newsflash material for anyone at this point.  As governments and businesses actively pursue the steps to turn things around, issues within business, especially in retail, that were once concerns are now becoming major problems as they battle theft and loss both internally and externally.

In the course of dealing with “loss” head-on, many companies are looking to improvement their infrastructure, processes and coverage by researching companies that specialize in providing goods and services to help reduce loss.  Today we will be covering a few areas that sourcing departments or 3rd party sourcing partners can help you so that you know what is out there and to help make the best decision for your company to procure.

Enterprise Software – There are many companies that provide enterprise software for gathering and monitoring the data that flows through your business every day.  Hundreds of successful RFPs are run every year to gather the information necessary to compare these companies and offer you valuable insight into the solution that is best for you.  Make sure you have all of the facts to be able to compare the companies evenly.

Video Equipment – With literally hundreds of video manufacturers on the market offering DVRs, cameras and the software that goes with them, not to mention new technology that leverages IP devices and video analytics to intelligently monitor the video, it is a perfect time to review the current video condition of your company.  Begin to gather the details and competitive pricing from these vendors to upgrade or improve your company’s current video infrastructure.

Consulting Services – While enterprise loss analysis software and video capabilities are important for many companies, not all companies have the staff to monitor and deal with what is being provided out of these systems.  Due to this issue, many consulting companies have appeared with terrific loss prevention experience to help you use your tools to reduce your loss, whether that is reviewing exception based reports, video or handling the interviews of potential theft activity in your company.

Alarms & Safes – Alarms and safes are terrific categories to be looking at due to the fact that with so many companies selling them, there is a terrific common ground from which a company can evaluate the pricing from multiple companies easily.  Because the field can be so competitive on pricing it is also a good time for customers to get additional “value-add” from vendors that are offering more services in order to get the alarm or safe business.

Security Companies – Security and doo/fire alarm monitoring companies have been in existence for years and many offer similar services.  Now is a good time to look at your existing supplier and see what else they are doing that is new that you might be able to leverage.  While doing this process it is probably a good idea to take a look at some new companies and see if they are offering anything that may help your company reduce either your loss or your costs.

Whatever your Loss Prevention need is, the global environment is quickly demanding that companies begin to pay more attention to the amount of money and product they are losing and look for ways to reduce that loss and the above categories and suggested steps in examining what is right for your company are just a few of hundreds.  For assistance in sourcing these categories for your business, please contact a SafeSourcing Customer Service Representative.  

We look forward to your comments.

Are you developing sustainable strategies with your office supplies purchases?

Thursday, September 22nd, 2011

Toner products are a great example of an opportunity to use a sustainable resource. At present, you are probably just buying toner products because you need them. Have you actually taken the time to look at more environmentally focused toner solutions?  

It’s a safe bet that your company is using laser printers. You may even have a thoughtful blue paper recycling container near the copier or even near every printer. You may even use recycled paper. The next step is a logical one; use environmentally friendly soy based ink for your laser printers.

SafeSourcing’s opinion is that the two best environmental reasons to use soy based ink are as follows. One, soy ink does not emit VOCs or volatile organic compounds. Two, soy ink is not petroleum based.  In a nut shell, you will be replacing a product based on a non sustainable source with one that is.

If you still need more reasons to switch? Assuming that you are already recycling paper, you will be glad to learn that soy based ink is said to make recycling the paper quicker and easier. Also, this option opens you up to new sources of supply. The next time you run an e-procurement event for toner, you will have more options, greater price compression and another notch in your environmentally friendly tool belt.

Once done with this project, you need to brag about it so that other companies take notice and follow your lead. If you have implemented the full array of green printing mentioned in this blog, you have earned the right. Your customers will be happy to hear that you have made the right choices.

If you would like to learn more about environmentally friendly practices for your business, please visit www.SafeSourcing.com and check out our blog archives and our sourcing wiki both full of useful information. 

We look forward to and appreciate your comments.

Very complex e-negotiation events are not difficult to host.

Tuesday, September 20th, 2011

 

So how does one define a complex e-negotiation event? On the surface it may be an event with a large number of line items within a particular product set such as MRO or Fleet Maintenance in the distribution space or raw materials used to manufacture components that require special handling, shipping and standards adherence. The amounts of the total spend for an event really has nothing to do with the complexity of the event. The complexity is determined by the data points requiring management in order to drive the best possible value to the buyer and the supplier.

This author would suggest that any event including multiple market baskets, thousands  of  SKU’s all with different specifications, order quantities, delivery locations, multiple suppliers not bidding on each line item, a split award of business and the size of the spend qualifies as a complex event. Adding to the complexity may be the overall strategy required when sourcing the right mix of suppliers to compress pricing properly and drive early and consistent bid activity. This can be further complicated by trying to determine the correct decile based sourcing strategies for the event and including product affinities where they make sense.

The above example would qualify as organized complexity where there is a non-random, or correlated, interaction between most of the parts. In order to support  complex events, your e-procurement provider needs to have an understanding of the specific market place and practices and processes in place that allow them to drive these activities and bring complex events to market  in the shortest period of time. Generally this should occur within less than two or three weeks from event notification to event completion.

Last year, this author tried to define the relative complexity of the retail environment and its potential impact on the use of e-procurement tools. Specifically we identified the following areas of interlocking complexity.

1. Supply Chain complexity.
2. Rate of change in the global supply chain.
3. Long term inherited supplier relationships.
4. Lack of retail procurement staff.
5. Lack of time.
6. Multiple sources of supply.
7. Limited view of new sources of supply.
8. Confusion as to who’s the customer and who’s the supplier
9. Sales People
10. Third Party Providers
11. Collaboration complexity.

Being comfortable that your solution provider understands your market place and has a well defined process for hosting Complex e-negotiation events insures that they are not difficult to host.

We appreciate and look forward to your comments.

What you should know about sourcing Cloud Computing Alternatives

Monday, September 19th, 2011

Today’s post is by Mark Davis; Vice President of Operations and CTO at SafeSourcing.

One of today’s industry buzzword / concepts is that of “cloud computing”.  Cloud computing is a generic labeling that has been applied to just about any hosted service that is accessed via the internet. It is one of the most rapidly growing technology areas in all business sectors today savings promises associated with a reduction in computer hardware  needs andn the related manpower associated with the same versus a company doing everything internally.

Today we are going to be focusing on three main categories of cloud computing that are available and the types of services that can be procured for your company in each one.

Software-as-a-Service (SaaS) – The most common category of cloud computing is the Software-as-a-Service model.  In this category are software packages that are physically hosted by another vendor in their environment, on their hardware, and supported by their resources.  The obvious advantage of this approach is having full-time support of an application that is maintained and upgraded by a staff you do not have to employ.  These models are usually priced on an as used basis making the ROI much easier to measure.  Examples of this model would be Retail Loss Prevention, POS and Pricebook applications such as those offered by companies like Retail Anywhere.

Platform-as-a-Service(PaaS) – For those who are a bit more advanced and have some internal development resources  in their IT department, the Platform-as-a-Service model provides them the capability to design, test and deploy their own software applications in an environment over the internet.  With database, design studio and web engine license fees being so expensive in order to stay current , this provides a way for companies to develop and stay current with their tools without bearing the exorbitant fees required to do it internally.  Currently the Google Application engine is one example of successful offering using this model.

Infrastructure-as-a-Service(IaaS) – The final category of cloud computing is Infrastructure-as-a-service delivering all of the hardware, network components, memory, hard drive space and processing power for a business and as such, effectively becoming the major component of an organization’s IT infrastructure.  The advantage of this approach is the capability to quickly and easily scale the model to fit a company’s needs without the major investment in the equipment and software.  This model can be as simple as providing data centers for your company or as complex as being responsible for almost everything an IT department represents in a company.  Amazon Web Services is one of the larger and more well-known offerings in this space.

With an ever increasing competitive landscape for many businesses where the call for reducing expenses is constant, these types of services will continue to gain increased favor while providing great value to those companies that can determine the best ways to leverage their collective or individual power. 

For assistance in sourcing these categories for your business, please contact a SafeSourcing Customer Service Representative.  

We look forward to your comments.

How do your buyers and category managers keep up with all of the product and safety recalls?

Friday, September 16th, 2011

The amount of information we are all required to be aware of today is simply mind boggling. As such a simple and effective tool that looks at the many sites providing this information and consolidating it in one location is your best bet to event try and stays aware of this information.

Most organizations like the USDA, FDA, EcoLogo, Kosher Council and the Consumer Product Safety Commission all offer RSS feeds of their most recent recalls and alerts. At SafeSourcing we consolidate over 50 of those companies so that you don’t have to. When you reach our site, the RSS fed alerts and recall section is located in the top right hand corner of the page. If you had been logged on to our system today you would already know that the listeria outbreak associated with cantaloupes has already killed four people and has spread to multiple states. What is listeria you ask? Visit the SafeSourcing Wiki to learn about many procurement related terms.

Are you aware of the Tylenol recall?

We look forward to and appreciate your comments.

What is Sustainable Procurement and Why You Should Care About It?

Wednesday, September 14th, 2011

In general, procurement refers to two different factors, price and quality.  For a company these factors are obviously important to the bottom line, but there are other factors that should apply for the bigger global picture.  Sustainable Procurement has a wider agenda by looking at a company’s “triple bottom line” which includes the impact the company has on the environment, the economy, and the social implications.  This indicates that a supplier will be evaluated on many more levels than just the product they are selling.

Environmental concerns are the dominant issue for sustainable procurement since humanity is currently putting such excessive demands on the available resources the environment offers.  A company that focuses on purchasing their goods and services from environmentally friendly companies is considered a “green procurement” company.

Economic concerns are another area that companies can focus on for a more sustainable procurement process.  In many situations a company that engages in sustainable procurement has the opportunity to offer assistance for smaller and/or ethnic minority-owned businesses.  By focusing on economic concerns a company may be more likely to purchase fair trade certified products which allows extra investments to be channeled towards developing countries.

Sustainable procurement can also be addressed through social policy and responsibilities.  In the United States, most companies are already conscious of the social responsibilities that influence the global supply chain.  The social implications include whether or not a company promotes equality and diversity among its work force. 

The overall goal for sustainable procurement is to ensure that goods and services purchased for a company are designed, manufactured, delivered, and used in an environmentally and socially responsible manner.  Why is this so important for you?  The answer is simple;  the more environmentally and socially responsible each of us is individually, and within our company or organization, the better off we will all be in the long haul.  In a global marketplace where people are becoming more and more concerned with the legacy their company can build and leave, it is becoming increasingly important that we leave positive footprints to be filled by future generations.

For more information on SafeSourcing and how your company can become more of a Sustainable Procurement partner, please contact a Customer Service representative.

We look forward to and appreciate your comments.

What are some benefits for businesses of reverse auctions?

Wednesday, September 7th, 2011

In today’s highly competitive world, businesses often find difficulty navigating and negotiating  with the savvy and skilled sales person.  This process can be lengthy, and prohibit implementation, quality and monetary gain associated with negotiating new contracts. 

E Procurement tools streamline and automate this process for businesses, often returning surprising ROI’s and returning valuable time to understaffed purchasing departments.  In fact, numbers don’t lie.  Savings of 5-15% from e procurement services can improve profitability by up to 100%. 

ROI, however, is not the only reason to use e-procurement services.  The transparency of data provided to the buyer allows them to streamline their purchasing process both internally and maximize their relationships with potential vendors while also evaluating meaningful trends. 

Based on the above, these types of hosted solutions are undoubtedly amongst the most cost effective and useful tools your business could use. 

If you are interested in learning more about how these tools could benefit your company please contact a SafeSourcing Customer Service Representative.

We look forward to and appreciate your comments.

What are the key points of sustainable procurement?

Thursday, September 1st, 2011

Today’s post is by Danielle Begley an Account Manager at SafeSourcing.

Due to the effects of globalization, sustainable procurement practices remain an important and necessary process for business professionals.  When sustainability is mentioned, most think immediately of the environmental impacts such as climate change and biodiversity.  However, sustainability should consider not only environmental impacts but also the economic and social impacts of sustainability.  Social impacts of sustainability in the procurement world are those at times most neglected and those that can help developing countries continue to grow.

The International Council for Local Environmental Initiatives (ICLEI) provides key points of social sustainability, which should adhere to international labor standards and policies.  Healthy work environments, minimum wage payments and a fair price for socially and environmentally sound work are a few points that are most important in developing countries that provide goods and services for developed countries.   Social impacts create more environmentally friendly trade and production practices, as well as strengthen the global economy.  Sustainable procurement must therefore encompass the environmental, economic and social impacts to be effective.

The procurement professional most importantly has a direct influence on how goods and services are purchased and as such impacts the social impacts of sustainability through free trade.   Globalization has made our world much smaller, and therefore more intertwined and reliant on shared resources.  Sustainability is a pivotal process in negating any potential negative environmental, economic or social impacts globalization may have caused.  Sustainable Procurement will create more socially and environmentally aware suppliers and customers which will allow the rest of the world to enjoy the benefits of globalization. 

For more information on SafeSourcing and how we can assist with finding suppliers that operate under sustainable principals, please contact a Customer Service Representative for more information.

We look forward to and appreciate your comments.