Archive for June, 2012

Entering the Unknown?

Friday, June 29th, 2012

Today’s post is by Dave Wenig, Manager of Customer Services at SafeSourcing.

You may have heard people use the expression; “you don’t know what you don’t know.” Personally, I enjoy this saying a great deal. It is a simple truism. When applied to a procurement project, it can represent any number of unknowns or variables that have yet to be determined, but could affect your results.

The question is; how exactly do you find out what you don’t know? It may even be possible that you also don’t know the questions to which you need answers. Well, the good news is, there are some options. In no particular order, here are a few.

1. Internal Survey – Although you may not have a complete grasp of a certain category, others in your organization might. Using an internal survey tool, these associates can be polled for information on product or service details based on their current usages.
2. External Survey – In some cases, an internal survey may not provide enough detail. In that case, use an External Survey that asks the vendors directly what they are currently providing. This step might also be done concurrent with an Internal Survey to maximize the data available.
3. Historical Experience – Ask your strategic sourcing partner about their experience in this category. Any experiences they have had will lend direction to your project. Note: They can also propose the questions for your Internal and External Survey.

For what it’s worth, you will always not know what you don’t know. Hopefully, these suggestions will encourage you to find out what it is that you don’t know one project at a time. I find that knowing that there are options tends to make daunting tasks seem a little more manageable. 

If you’d like some help uncovering what you don’t know about your sourcing projects, contact a SafeSourcing customer services representative.

We look forward to and appreciate your comments.

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Here’s a repost that still has some legs.

Friday, June 22nd, 2012

I choose to post simply because I can
My wife seems to think it’s because I’m a concerned and caring man.
So why or when to post, just what is my deal
It could simply be that I just had a bad meal
A meal from a food source that was not really safe
That sickened me some
And just could not be traced
It’s origin cloudy I really get ticked
That many more people could also become sick
So I post a few comments on product safety and more
In the hopes that they become part of the cure
Whether near shoring or off shoring and from local suppliers too
We offer opinions hoping they’ll be helpful to you
It’s time that our supply chain start to get the game right
And that will only happen if buyers make the process more tight
With adherence to certifications and timely inspections
That are clearly executed against consistent directions
While we’re at it, it’s important to do and say what we mean
And while we tighten up our processes
Let’s try to keep them focused on becoming more green
With a supply chain that’s safer
And greener to boot
Our new posts can discuss how to reinforce doing both, while still saving you some loot!

We look forward to and appreciate your comments. However, there is no need for them to be poetic in nature.

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Should you join a Group Purchasing Organization (GPO)?

Tuesday, June 19th, 2012

According to Wikipedia a group purchasing organization (or GPO) is an entity that is created to leverage the purchasing power of a group of businesses to obtain discounts from vendors based on the collective buying power of the GPO members.

When is a company a GPO and when are they something else? Many organizations take on procurement functionality based on the spend of their members. They can be industry wholesalers, share groups, consortiums, distributors and a variety of other types of organizations. They may take on all procurement opportunities or specific opportunities like energy. GPO’s can be vertically focused or horizontally focused. They can also be horizontally focused within an industry vertical. An example might be a wholesale grocer that is focused on a retail industry vertical like supermarkets.

The question is should you join one or many? Maybe you shouldn’t join any. The only way to answer the question is to understand your own organization in terms of its strengths and weaknesses relative to the products or services categories you hope to source. As an example; if you are just buying from a wholesalers price book, it’s a good bet you are not getting the best price. It’s also a good bet that other members of the same wholesaler are getting a better price and they may be smaller than you. However you may also have a huge energy spend and this is something that your product wholesaler can’t help you with. As such, there may be a specific GPO for energy that can offer some expertise.

This author believes that your best bet is to focus on a procurement company that is horizontally focused with specific expertise in a number of verticals such as health care, retail, distribution, financial services etc. I have often seen these companies significantly out perform GPO’s by a significant amount as the overall overlap of expertise across multiple industries suggests a level of creativity that GPO’s may not have.

Ultimately understanding what your company’s limitations are as well as the opportunities that are available to you is a first and important step. After that, it’s who can do the most for you with the least disruption across the broadest area of spend.

SafeSourcing is such a company. Please contact us if you would like further information on how to improve your bottom line in the present quarter risk free.

We look forward to and appreciate your comments.

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Are you running enough RFI’s? Are you running any?

Friday, June 15th, 2012

According to Wikipedia and others a Request for Information (RFI) is a standard business process whose purpose is to collect written information about the capabilities of various suppliers. Normally it follows a format that can be used for comparative purposes.

So a Request for Information (RFI) is primarily used to gather information to help companies make a decision on what steps to take next. RFI’s are therefore most often the first stage in the procurement process particularly with new sources of supply. They are used in combination with: Requests for Quote (RFQ), Requests for Tender (RFT), and Requests for Proposal (RFP). In addition to gathering basic information, an RFI is often used as a solicitation sent to a broad base of potential suppliers for the purpose of preparing a supplier’s thought process in preparing for a Request for Proposal (RFP), Request for Tender (RFT) in the government sector, or a Request for Proposal (RFP).

Much of the data required for an RFI is generally available and can be found on company websites, U.S. Security and Exchange Commission (SEC) filings for publicly traded companies in their Edgar system, industry guides from companies like Trade Dimensions, or from sources like Dun and Bradstreet.

The challenge for most companies is that they do not have the necessary resources to complete this research. Therefore providers of supplier data should be able to make this data available in templates that companies can begin with. Simple data should always be available in any database as to Company Name, Annual Sales, Product category expertise, contact information, e-procurement experience and product specifications. This data should be easily exportable to a variety of formats such as MSFT Excel.

A simple request of your e-procurement supplier should get you well on your way to completed RFI’s that lead to quality RFP’s and RFQ’s without spending a lot of your valuable time on basic research. If they do not, we’d be glad to hear from you.

If you’d like to learn more, please contact a SafeSourcing customer services associate.

We look forward to and appreciate  your comments.

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SQF; is it the panacea for food safety and food borne Illness mitigation?

Wednesday, June 13th, 2012

According to Dictionary.com a panacea is a remedy for all disease or ills; a cure-all or an answer or solution for all problems or difficulties. Although this author does not believe it to be a panacea, SQF is certainly an important building block if not a corner stone of any global food safety program.

The SQF (Safe Quality Food) Program is a leading, global food safety and quality certification program and management system designed to meet the needs of buyers and suppliers worldwide. There are two sections of SQF. SQF 1000 is targeted at primary producers and SQF 2000 is targeted at manufacturers and distributors. More detailed inforamtion can be found at www.sqf.com. Schools are held regularly around the country for both groups and detailed information about these schools can also be found at www.fmi.org under the calendar section.

There are ten basic steps to implementing an SQF Program. These steps are taken from the SQF manual.

1. The Buyer requests the desired level of certification to be achieved by the supplier.  
2. The Supplier designates a staff member as its SQF Practitioner to lead development of its SQF System, or hires an external SQF Consultant licensed by The SQF Institute.
3. The SQF Practitioner is trained at a licensed SQF Training Center.
4. The SQF Practitioner conducts a gap analysis of the supplier’s current system.  
5. The Supplier selects an SQF licensed Certification Body to perform a certification audit.
6. A Certification Audit is conducted consisting of a document review and on-site audit.
7. An Auditor recommends certification if no critical or major non-conformities are found and the audit result indicates an acceptable rating.
8. The Certification Body Review Council makes the final decision and the SQF Certificate and audit report are issued. The SQF Certificate is valid for 12 months.
9. If critical or major non-conformities are found, the supplier takes corrective action, which is verified before certification is granted.
10. Re-certification audits are conducted annually and within 30 days of the scheduled audit date. Audit frequency can be either annual, semi annual or more frequent depending on the type of certificate issued and the risk level.

We appreciate and look forward to your comments.

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Understanding the Financial Hangover

Monday, June 11th, 2012

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

anyone who has ever had a hangover before, it can be a horrible experience the first time it happens to you.  You can’t, nor do you want to, do anything but get through the stretch as painlessly as you can.  Everything you would normally do is frozen because your body is depleted of many things it lacks.  All you can think of is how you can’t wait to be done with the experience and many swear that when that time comes things will be totally different for them.

Unfortunately, for a lot of us, that first time was when we were young and once we got through the hangover we felt much better, even wonderful, energized and instead of doing things differently, like learning moderation, we do the same things that got us hung-over all over again.
But just like the example above, a new account and new money comes in and everyone starts feeling better and there is money and instead of “doing things differently” they go on a spending spree and quickly find themselves right back to where they started; financially hung-over.

Today we will take some principles that would help prevent the hangover from happening again.

• Plan before you make spend.  Once you get out of difficult period, before you do anything that would get you into another tight financial spot, plan on what it is you want to do so that you do not get caught up in the process of spending.  Rank the purchases you need based on contract end date, importance to the business and things that will save time and money.
• Spend in moderation.  The hardest thing to do after coming out of a tough financial time into a great and exciting one is to show self-control.  Pick one or two things from the list above to begin pursuing first, hopefully with a mix of some projects that can return some money to your bottom line in savings and in optimization.
• Find someone to assist.  Having a partner who can help organize your projects, take the pressure off you and keep plans on track can be critical to your success.  Finding a 3rd party consulting firm or strategic sourcing partner can greatly increase the chances that you will do things differently.

For more information about how we can assist with organizing and executing you sourcing projects, please contact a SafeSourcing Customer Service Representative.  

We look forward to your comments.

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Sourcing VS Buying – Putting it in Perspective – Final Part 5 of 5

Friday, June 8th, 2012

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

This week we have been looking at how the concepts that influence how people purchase for themselves personally can be applied to the procurement world to help overcome hurdles and to better understand how to approach their own difficult procurement projects.

In today’s blog we will conclude by looking at how we as consumers love to save but hate the work that sometimes goes with it.

The Joy and Pain of Coupons

In our house I painfully watch as my wife spends what seems like hours clipping coupons each Sunday before going shopping.  It is something I do not know if I could do, but when she shows me the receipt showing $20-$50 in coupon savings I am very pleased.  All of that said, and in spite of knowing the potential savings I could, get I still don’t know if I would take the time to clip those coupons and I know I am not alone.

In so many ways, this reflects the attitude of procurement departments everywhere when you mention strategic sourcing processes and tools as something they should be doing.  They all agree with the potential savings numbers but are often not willing or able to spend the time to do the right things to get them.

Just like the scenario above where my family gets savings because my wife takes the time for us, procurement departments have that same option in 3rd party strategic sourcing companies that will take the load off of them to research, communicate, prepare, collect, analyze and report the savings for them.  By partnering with an eProcurement vendor, companies can have the opportunity to get great savings without having to invest the hours it takes to get those savings with their own team.

We hope you have enjoyed this series and for more information about how we can assist with sourcing projects for your company, please contact a SafeSourcing Customer Service Representative.  

We look forward to your comments.

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Sourcing VS Buying – Putting it in Perspective – Part 4 of 5

Thursday, June 7th, 2012

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

We have been looking at how the concepts that influence how people purchase for themselves personally can be applied to the procurement world to help overcome hurdles and to better understand how to approach their own difficult procurement projects.
In today’s blog we will be looking at how we as consumers are constantly looking for more from the products we buy and the companies we buy them from and how that same practice should be employed when reviewing your company’s suppliers.

Expecting More

In the world of advertising and marketing there are professionals whose job it is to keep us informed of all the ways the services and products we are currently buying are deficient in every way to the services and products they are selling.  As jaded television watching and magazine reading consumers we have learned to filter out what is real and what is fluff, so we know when we see something we want and will demand that new offering from our current company or we will decide on whether to switch products or providers.

Obviously the effects of switching that quickly and often in the business world can be disastrous and as procurement professionals we don’t have the same adverting messages constantly in our face to pick apart our current partnerships and supplier choices.  That does not mean, however, that there is not something to take away from this mentality of learning what is new and expecting more. 

Part of any good sourcing strategy will be to examine (typically in the form of a Request For Information) what is available on the market that is new.  This does not even mean you have to consider changing vendors, but it does give you the option of seeing how your choice of forklifts compares to the latest and greatest on the market or what teleconferencing services are now willing to provide customers that sign a 2-year contract that is more than what you are getting today.

As the old saying goes, “You don’t know what you don’t know,” and you can’t make the best decisions for your company unless you “know it.”

Tomorrow we will conclude this series by looking at how getting help can increase your savings.

For more information about how we can assist with sourcing projects for your company, please contact a SafeSourcing Customer Service Representative.  

We look forward to your comments.

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Sourcing VS Buying – Putting it in Perspective – Part 3 of 5

Wednesday, June 6th, 2012

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

We have been looking at how the concepts that influence how people purchase for themselves personally can be applied to the procurement world to help overcome hurdles and to better understand how to approach their own difficult procurement projects.

In today’s blog we will be looking at how looking only at low price can be seen by many retailers/suppliers as the wrong way to obtain what you are looking for.

Only about the lowest price

Anyone who regularly shops and cooks at home will tell you that when it comes to buying meat it is more than just about price.  Sure the average person can buy a 5 lb bag of frozen chicken breasts that is much cheaper than the 2 lbs of fresh free-range chicken breasts but many will tell you that the difference flavor and texture makes up for it.  Some people will still buy the frozen because it is cheaper, some will go for the taste and freshness in spite of the cost and most everyone else will fall in the middle.

This concept holds true again with big sourcing projects.  There are some customers who want nothing more than the “cheap frozen chicken” and so they go for the lowest price option only.  Unfortunately this has created a bad image for strategic sourcing tools as being low cost only tools that never factor in any thing else in the buying decision. 

The best strategic sourcing practices will show, however, that almost all projects fall somewhere in the middle where a customer needs to understand everything that sits between “frozen chicken” and “Just prepared today fresh chicken” and then analyze the cost, quality, service level, and reputation of each option.  This is how a company finds the best overall value for their company.

Tomorrow we will cover how understanding how other similar products and services are better can help us get more out of what we buy.

For more information about how we can assist with sourcing projects for your company, please contact a SafeSourcing Customer Service Representative.  

We look forward to your comments.

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Sourcing VS Buying – Putting it in Perspective – Part 2 of 5

Tuesday, June 5th, 2012

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

There have been studies and surveys conducted that show how many procurement professionals say they like their jobs because they get to “shop” for their companies.  In its most basic form this is correct, however the differences between running a multi-billion dollar corporation and what it takes to run a normal household soon show that there is a lot more to procuring for a company than just shopping. 

In today’s blog we will be looking at how loyalty to certain products can be seen as a hurdle to purchasing and how it doesn’t have to keep you from looking at other comparable products.

Loyalty to the product

In my home there are certain products we buy even though comparable and cheaper products are available.  Because we aren’t lottery winners, there are not too many of those products and even then we still try and find the best prices for those products when possible.  We are loyal to those products and we will not change without a compelling reason.

In the procurement world, hesitation to strategic sourcing practices happens for similar reasons and should be handled in similar way.  When a customer tells us they want to buy computers but only from Dell, we tell them we will get the best source of Dell computers for them but that we would also like bring in proposals from other manufacturers for them to review in the process.  Without taking this approach, they can never know that what they have always used is still the best product or service out there.  If it ends up that it still is, then at least they still have the best source to choose from for that product.

Tomorrow we will look at when price is seen as they only objective to buying something.

For more information about how we can assist with sourcing projects for your company, please contact a SafeSourcing Customer Service Representative.  

We look forward to your comments.

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