Archive for April, 2012

Sourcing Significant Spends!

Monday, April 30th, 2012

As your organization begins to realize savings across varying categories, you will find that you are able to achieve savings on even some of your smallest spend categories. One of the benefits of having an eProcurement partner in place can be that you can work with them to consider more spend categories where you may not have had the time and resources available to analyze these smaller spend categories.

The risk that your organization must be aware of is that sourcing too many small spend categories and not enough of your larger spend categories will create a huge opportunity cost. As an example, a company that might be enjoying an average eProcurement savings of about 20% over all categories should see any category not sourced using the eProcurement format as one in which they are leaving potential savings on the table.

As the champion of your eProcurement program, take a step back and review the categories being sourced. If you find that the amount of spend running through the program is low compared to your overall budget or expenses, then you are most likely underutilizing your eProcurement partner.

This author would challenge you to engage your strategic sourcing partner to fully capture potential savings. Once you are more fully utilizing eProcurement techniques, you will quickly find real dollar savings on categories that might otherwise have been untouched.

We look forward to and appreciate your comments.

I never saw a MAD COW!

Thursday, April 26th, 2012

This post is not intended to poke fun or suggest that this is not a serious issue, it is to use a well known poem form the past to hi-lite the serious nature of this issue.

The poem Purple Cow has been attributed to many authors over the years and also rephrased by many, coming to represent something that is not normal. And having mad cow disease in our food chain is definitely not desired or normal.

So here is my derivation of the original by Gelett Burgess in 1895.

Mad Cow

I never saw a mad cow
I hope I never see one,
But I can tell you this right now:
I’d rather see than eat one.

Ah yes, I wrote “The Mad Cow”
I’m Sorry now I wrote it
But I can tell you Anyhow
It could kill you if you ate it!

To our friends at the FDA, please solve this issue ASAP and insure  industry buyers and their consumers that they do not have to worry about this type of contamination in our food chain.

We look forward to and appreciate your comments

Influential People Affect Change Part II

Tuesday, April 24th, 2012

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

In today’s Part II of this  blog post we will continue looking at some of the ways you can begin to affect positive changes in your company’s sourcing strategy that don’t necessarily require an army of new employees or unlimited budget to do.

Policies – Soliciting executive support is one of the first steps to take to create sourcing change.  With it, the processes and partnerships and change you hope to create will have the backing that will help carry it through, especially in areas (and there will be some) where that change won’t be welcome.   This is sometimes difficult to get at first and may require some small measurable victories to help get the backing you need, but to affect big change this will be necessary.

Processes – Once you have determined you have the desire to improve your company’s purchasing effectiveness, you will need to perform an assessment of where you are today and where you would like to be.  An important part of getting to where you want to be is to make sure you have standard methods for understanding and approaching new sourcing projects.  This does not mean every project will be the same but making sure no steps are missed in the process of examining those categories is important.  Determining if an RFI should be run, or internal survey conducted, or if the category should be completely re-examined are things that should be reviewed at this time.

Partners – In today’s world there are few organizations that have the wherewithal to grow big changes internally.  It is a commonly accepted practice to enlist the aide of third party partners with the staff, resources and expertise to help with the changes you need to make.  These partners can have various levels of involvement, from simply providing eProcurement tools for you to use to full-blown consulting arrangements that will examine all of your company’s spend.  The level of involvement you look for will depend on your budget, the type of help you need and the amount of support you are getting from the executive level.  Getting some quick results to show the company can go a long way to creating greater more permanent change in your organization and outside partners are a great way to do this.

For more information about how you can begin to create positive changes in your company’s sourcing processes, please contact a SafeSourcing Customer Service Representative.  

We look forward to your comments.

Influential People Affect Change Part I!

Monday, April 23rd, 2012

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

As I sat on a plane this weekend reading about Time Magazine’s 100 Most Influential People in the World a common thread connected the majority of them in some way; most became influential by being an “ambassador of change.”

Equally common was the change that each ushered in came at a cost, be it money invested, time invested, people and resources invested or simply the desire and passion invested to see change occur for the better.

It made me think about our industry and how many professionals consider, or for that matter, even want to become “ambassadors of change” for their company.  Obviously millions of dollars or 100 new employees can go a long way to creating this change but how realistic is that for any of you?  I would venture to say, not very realistic.

So short of an army of new procurement professionals and an unlimited budget how can you achieve change?  The answer lies above in simply having the desire and knowing that change in some cases can take time and will require patience.  Over the next few days we will looking at some ways to begin to affect change in your organization.

For more information about how you can begin to create positive changes in your company’s sourcing processes, please contact a SafeSourcing Customer Service Representative.  

We look forward to your comments.

Sourcing Travel Accommodations part IV of IV!

Friday, April 20th, 2012

Ok, amenities are one thing, but how data relative to individual locations, chain or corporate discounts and rebate programs interact is key to making sure that what looks like value really is.

During Part III of this post we discussed organizing your data and looking at amenities offerings and programs that when supported by your corporate travel policies drive value and assist in establishing the goals for your event.

Today we will be exploring the importance of these additional data elements.

   1. Location Rates
   2. Chain Discounts
   3. Rebate Programs

The Location rate – The most ideal scenario in any accommodations eProcurement process is to negotiate the rate at individual properties based on a spend estimate (usually more than 100 nights a year).  Regardless of what the goal of the project eventually ends up being, being able to focus on the top 8-10 locations where you have significant recurring use  to reduce your rates is something that should be considered as long as you have the estimates to provide the properties; which is not always the case. There are ways to extrapolate this data if it is not yet consolidated that a solutions provider should be able to help you with.

The Chain or Corporate Discount – In many cases, company’s lack the visibility into their accommodation spend to be able to let vendors know much more than the overall amount they spend each year.   There are times in these cases, when a company is beginning to establish its travel policy and tracking mechanism that trying to get a chain discount across all properties may be a good place to start.  Selecting 2 or 3 preferred chains will help you get a good discount and will provide you with partners who can begin helping you track the activity from their side as well.

The Rebate Program – Unfortunately when you can’t provide the level of detail you want to the vendors on the portion of business they stand to gain while at the same time you may even be starting a new travel policy program internally; getting everyone to commit to the project can be difficult.  The vendors don’t want to go out on a limb because they don’t know how much business they are really going to get and the employees may not follow the process because they see no reason to do so.

Establishing an annual cash rebate program with the vendors based on volumes can address both of these issues.  Vendors have the opportunity to commit to additional savings when they get the volume of spend they are seeking and since tracking volume becomes the means by which this rebate is achieved, the employees and company have a strong reason to maintain use of the new processes.

If you do have good consolidated information, there are ways to leverage all three of these data elements in order to optimize your savings opportunities and reward your frequent travelers and traveling vendors at the same time.

Hopefully this four part blog series points out that there are a number of variables (data) to consider when sourcing Hotel Accommodations, individually they all can add value and potentially reduce costs or mitigate increases, combined as a complete strategy where each element is leveraged there is significant potential  for your company.

If you’ve enjoyed this four part post on sourcing accommodations, please pass it on to others that may have interest. If you like more information about sourcing travel related categories like hotel accommodations; please contact a SafeSourcing Customer Service Representative.

We look forward to and appreciate your comments

Sourcing Travel Accommodations part III of IV!

Wednesday, April 18th, 2012

This week’s blog series is by Mark Davis; Sr. Vice President of Operations and CTO at SafeSourcing.

During Part II of this post we discussed the impact of corporate travel policies and establishing the goals for your event.
Today we will be exploring the following data elements.

1. The Data
2. Amenities & Features

The Data – After you have established your goals for your events it’s time to review the data you have available to you in order to get your project off the ground. Don’t be disturbed if there isn’t much.  Having no visibility into how many nights you stay at a specific location can certainly make negotiating rates with that location more difficult but not impossible.  In many cases companies have rates established with properties and do not even realize it.  Simply making some phone calls to the hotels near your offices is a simple way to start. You might be surprised with what you have in place currently with these properties.  At the very least a picture of what your accommodation spends as a whole is needed so that the chains and properties know how to provide you with something that is valuable for you and worth their investment. Between these phone calls, some internal surveys and some expense statement reviews, extrapolating your spend is entirely possible.

The Amenities & Features – You may not have a policy that details the amenities a specific property or brand needs in place in order to be a “preferred” site but gathering those details is critical so that you can sort out your true cost profile once the project has been completed.  One property in Phoenix, AZ may provide lower rates than another but may charge for internet access and is not able to provide the free continental breakfast another property with higher rack rates does.  It  may be preferable to conduct an RFI as a precursor to any pricing work that is done so that  your company can understand which properties will fit the criteria you require of a preferred location.

During tomorrow’s final post in this series we’ll be discuss Location Rates, Chain Discounts, Rebate Programs and how to leverage them to your best advantage during your event.
If you can’t wait for tomorrows Part IV or this IV part post and need more information sooner about sourcing travel related categories like hotel accommodations, please contact a SafeSourcing Customer Service Representative.

We look forward to and appreciate your comments

Sourcing Travel Accommodations part II of IV!

Tuesday, April 17th, 2012

This week’s blog series is by Mark Davis; Sr. Vice President of Operations and CTO at SafeSourcing.

During Part I of this post we discussed the types of data required to effectively negotiate Hotel Stays for your company?
Today we will be exploring the following data elements.

   1. The  Corporate Travel Policy
   2. The goal of your sourcing effort

The Policy – Before anything gets done with a travel related category it may be an appropriate time to revisit the company’s entire corporate travel policy in order to determine if any updates are required.  If you do not have a formal travel policy that covers the entire company, establishing one should the be the first step in this sourcing endeavor.  Details that should be included in this document become the  foundation for the Terms & Conditions that drive as well as the contracts that ensure your results and will also determine how best to set the next step of the process: The Goal.

The Goal – There are generally two kinds of hotel accommodations that companies should gather data for during the eProcurement process. They depend on the structure of your company.  The first is to gain the best rates you can for company associates that travel as part of doing business for your company. These can location specific if used frequently enough or they may be in the form of a program that gets established for all locations within a specific hotel brand. The variety of stay should be dictated by the corporate policy.  The second goal is to secure the best rates and service for a company’s locations or location for their associates as well as vendors and customers visiting your offices.  These two goals can happen independent of each other or as part of the same process.

During tomorrow’s post we’ll discuss additional data elements such as amenities, features and services.

If you can’t wait for tomorrows Part II or this IV part post and need more information sooner about sourcing travel related categories like hotel accommodations, please contact a SafeSourcing Customer Service Representative.

We look forward to and appreciate your comments

Sourcing Travel Accommodations part I of IV

Monday, April 16th, 2012

This week’s blog series is by Mark Davis; Sr. Vice President of Operations and CTO at SafeSourcing.

Negotiating hotel accommodations for your company can be a tricky business because many vendors will want to understand your goals and your projected spend with them before they will seriously consider awarding you aggressive discounts.  Couple this with the fact that many franchise properties like to negotiate their own rates independent of their national brand and you have what appears to be a complex low return category. When In fact, this not the case. 

Over the next several days we will be taking a look at some of the data companies require before they will seriously consider awarding you aggressive discounts.

Over the course of this post series we will be exploring the following data elements.

   1. The  Corporate Travel Policy
   2. The goal of your sourcing effort
   3. The Data
   4. Amenities & Features
   5. Location Rates
   6. Chain Discounts
   7. Rebate Programs

If you can’t wait for tomorrows Part II or this IV part post and need more information sooner about sourcing travel related categories like hotel accommodations, please contact a SafeSourcing Customer Service Representative.

We look forward to and appreciate your comments

Who is responsible for educating our supply chain associates?

Friday, April 13th, 2012

So it’s up to you; would you like it to be your fault or a reflection of your well planned educational planning.

Someone told a long time ago that you don’t learn in college, you learn how to learn. I’m not sure I completely agree with that statement, but understand the sentiment. There are any numbers of statistics out there that support the fact that retention drops immediately upon completing a learning experience. Many have been conducted on the amount of learning that erodes for students over the summer or how much they remember from an actual class as soon as the leave the learning experience. The learning experience could be a particular class, program, major or minor area of study. The fact is much like muscle, if you don’t use it you lose it.

So, who is responsible when someone comes to your company to insure that their employment is a continual learning experience? The answer is YOU and that includes the entire management team. First and foremost the company needs to have an education plan in place, and that is not just on the job training or the next MSFT class. Each department has to have a supporting plan in place that relates specifically to the mission of their individual department or area of expertise such as procurement.

Part of our strategy prior to launching SafeSourcing beyond just offering world class e-procurement tools was to offer an educational site for procurement professions that included a blog, a wiki and a professional social community where they could share their experience. We actually have our associates use these tools. We never source a category for a company that we do not conduct team research on first. That is even if we have an internal subject matter expert. We then hold associates accountable to providing an internal white paper relative to the subject. All associates are also accountable to producing one blog monthly relative to the supply chain. From these learning activities associate are also required to provide original content for our sourcing wiki and propose threaded conversations within our Sourcebook. Bottom line, if you live it, you learn it.

We all come from diverse educational and experiential backgrounds. That does not mean that we can not find and experience passion within a new area of expertise such as procurement. The thing is, most associates will not do it by themselves.

If you want good results, create an educational plan for your associates that foster a passionate learning environment within the daily practice of their job.

We look forward to and appreciate your comments.

What certifications should freight carriers (by land or by air) have in order to get your goods into Canada or from Canada into the United States?

Thursday, April 12th, 2012

When you hire or contract a freight carrier to ship a package or even a truck load of goods into another country, do you ask what certifications the truck line has? Do you understand what each certification means?

Here is a brief list of certifications that many freight companies have. If you do not see a certification on this list and a carrier says they have one, always research the certification and how it pertains to your particular freight crossing a countries boarder.

C-TPATCustoms-Trade Partnership Against Terrorism
The Customs-Trade Partnership Against Terrorism (C-TPAT) is a cooperative endeavor between the trade community and U.S. Customs Service to develop, enhance, and maintain effective security processes throughout the global supply chain, and effectively manage USA border security.

C-TPAT recognizes that Customs can provide the highest level of security only through close cooperation with the ultimate owners of the supply chain — importers, carriers, brokers, warehouse operators, air consolidators /OTIs /NVOCCs and manufacturers.   Through this initiative, Customs is asking businesses to ensure the integrity of their security practices and communicate their security guidelines to their business partners within the supply chain.

Definition Source:

F.A.S.T:  Free and Secure Trade

 FAST is the acronym for “Free and Secure Trade.” It is a bilateral initiative between the United States and Canada and the United States and Mexico that gives partnering importers expedited release at national borders when transportation is by truck. It is for qualifying commercial shipments through risk-management principles, supply-chain security, industry partnerships and advanced targeting.

Definition Source:

 PIP: Partners in Protection

 The Partner in Protection (PIP) Certification, the supply chain security program of the Canada Border Services Agency, was initially established in 1995 as a program focused on Customs’ compliance. It has since transformed to actively deal with supply chain security as its main objective.

 Obtaining a PIP Certification requires an organization to complete a security profile for their main operations as well as security profiles for all subsidiary and/or affiliates and supply chain business partners. The completed security profile must clearly demonstrate that all security requirements have been met. CBSA then works with the organization to conduct site visits, review the security profiles, and offer suggestions to correct areas that received high risk assessments.

Definition Source:  

IATA: International Air Transport Association

 IATA (International Air Transport Association) was founded in Havana, Cuba, in April 1945. It is the prime vehicle for inter-airline cooperation in promoting safe, reliable, secure and economical air services – for the benefit of the world’s consumers. The international scheduled air transport industry is now more than 100 times larger than it was in 1945. Few industries can match the dynamism of that growth, which would have been much less spectacular without the standards, practices and procedures developed within IATA.

Definition Source:  

CIFFA:  Canadian International Freight Forwarders Association

 The Canadian International Freight Forwarders Association was founded September 1948 in Montreal by a small group of freight forwarders who saw a need to create an industry association to meet the professional demands of its members.

 CIFFA Mission Statement: Our mission is to represent and support members of the Canadian international freight forwarding industry in providing the highest level of quality and professional services to their clients.

Definition Source:

DG: Dangerous Goods Certification

 Dangerous Goods: Articles or substances which are capable of posing a significant risk to health, safety or property when transported by air and which are classified according to the U.S. DOT and IATA/ICAO List of Dangerous Goods.

 Hazmat Certification, DG Certification, DG Certified, Hazmat Certified etc. all refer to the concept that someone, some entity is conferring approval on an individual or company that they are authorized to ship hazmat in commerce.—Unfortunately, there’s a lot of confusion and misinformation in this area.—In the US, only the employer can certify employees. The DOT does not certify anyone; never has.

Definition Source:

While these are just a few of the common certifications, it is always in your best interest to ask what other certifications the freight company or freight forwarder have to get your goods safely from point A to point B without incident, safely, and within country of destination and origin standards. 

We look forward to and appreciate your comments.