Archive for February, 2013

“Just what makes that little old ant think he can climb a rubber tree plant”?

Tuesday, February 12th, 2013

We don’t hear too much about the different types of On Line auctions anymore as many features are baked in to newer tools today! And very few understand the psychological models that are used within these modern bidding frameworks. One of the oldest types of on line auctions is the Vickrey reverse auction?

According to Wiktionary the Vickrey reverse auction is named after a Canadian professor of economics named William Vickrey (1914-1996) who was also a Nobel laureate.  Vickrey’s paper, Counterspeculation, auctions and competitive sealed tenders, was the first of its kind using the tools of game theory to explain the dynamics of auctions. Any one that truly understand the magic of a reverse auction understands that the same type of psychology that drives gaming in a Casino drives the dynamics of a reverse auction.

There are a number of types of reverse auctions which is why a strategy is important when you look at each category that you decide to take to market. Specifically to the opening question, a Vickrey auction allows for selling single items where the lowest bidder sells the item at the price offered by the second lowest bidder.

Think about how you might implement this strategy to encourage bidder. How would you set your system indicators? Might you use ranking or a reserve or low quote indicator? If so, what impact might it have? Shouldn’t you be asking that question up front as you set your strategy?

See, there is much to ponder, and much you can do. If you like to learn more about how certain tools and  features may influence  bidding behavior, please contact a SafeSourcing Customer Services representative.

We look forward to and appreciate your comments.

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Containerboard trends: What are they telling you?

Monday, February 11th, 2013

Today’s post is by Mark Davis; Senior Vice President  COO at SafeSourcing.

What are the latest numbers for industry containerboard pricing and inventory telling you about your corrugated cardboard needs?

With a $50/ton containerboard increase last fall and what some industry experts are saying may be another increase coming in early 2013, now may be the perfect time to look at sourcing your containerboard needs.  While this was happening, Hurricane Sandy was affecting many North American inventory levels, but industry reports released have shown a return to higher than average inventory levels for December and January.

What do these trends mean for businesses that regularly use corrugated cardboard in their day-to-day operations?

Future price increases are one of the major reasons for sourcing containerboard needs now in order to lock in prices before increases hit.  While most contracts will still be tied to pulp indexes, getting agreements in place now will allow you to take advantage of those prices before the increases hit and may justify the warehousing of pre-purchased stock at lower prices.

North American export levels finished at slightly lower levels in 2012, however industry experts are predicting that export levels are expected to increase in 2013 cutting into available inventory and increasing the demand of suppliers.  Many manufacturers such as International Paper are increasing capacity through acquisition and renovation in order to absorb the increased demand levels.

With potential price increases in containerboard coming and demand increasing, it is no wonder that traditional mills have begun to move production of traditional paper types such as newsprint to the production of containerboard in order to leverage the trends.  This increase in sources is good for customers who have the opportunity to investigate new suppliers that may be a better fit for them in terms of service and geography.

If you are a business who uses linerboard or corrugated board products, now may be the perfect time to think about sourcing your needs to avoid potential future increases or possibly to investigate suppliers who can provide you a better mix of product and services.

To understand more about how we can help you source your containerboard needs, please contact a SafeSourcing Customer Service Representative.

We look forward to your comments.

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BREAKING NEWS: No mail on Saturday’s?

Friday, February 8th, 2013

Today’s post is from Sarah Kouse a SafeSourcing Center of Expertise Account Manager

For practically forever the U.S. Postal Service has been in service delivering mail to businesses and residents six days a week all over the country. I always remember as a child getting very excited to go check the mail to see what arrived that day. Most of the time it was bills and/or advertising mailers for my parents, but on occasion I would receive a letter in the mail and it would feel like Christmas and bring me excitement to reveal what was inside.

The U.S. Postal Service has decided to discontinue Saturday’s for mail delivery, but continue to delivery packages to businesses and residents. Doing this, they are able to save about $2 billion. They plan to make this cut in August 2013.

Could they have chosen other actions of saving money and cutting costs without completely cutting out a service that patrons have been used to receiving for decades? Could they have looked at ways at cutting their spending on necessary items they purchase to run their business?

Cutting cost by downsizing is not always the only answer. That’s where SafeSourcing can help you and your business. SafeSourcing can look into ways to help you cut cost without downsizing or changing how you run your business. We can look at items that are purchased on a regular basis, that are necessary to run your business, and look at alternative options at purchasing those items significantly cheaper and still retaining that same quality of the product and/or service.

Contact a SafeSourcing Customer Service Representative for more details on how we can save you money.

We look forward to and appreciate your comments

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Sourcing For Dummies!

Thursday, February 7th, 2013

Today’s post is by Brad Westfall; Account Manager at SafeSourcing.

As I was searching for a book in my local mega book store, I was looking for the technology section. Once I found it, I saw a wide range of the popular For Dummies series with subjects like, IPhone, Microsoft Office, and the one I purchased, HTML XHTML and CSS. I often wonder how store personnel answer the phone when someone calls asking for help and they try to explain the For Dummies series without insulting the customer. Anyway, I digress.  I started thumbing through the different books and found that the paper stock and printing were all different. Noticing that, I started to think about the different aspects that went into making and producing a book.

As a sourcing expert I tend to view the world a little differently than most folks. When I see a book, it reminds me of the different weights used in the paper world as well as what drives the cost of the paper like the pulp market. For the pages of the book it is most common to use 120-170 gsm. The next thing I see is the type of binding that is used for a book. The most common and cost effective type is case binding.

At SafeSourcing we are very careful to take the time required to learn everything we can about what makes up a product or service. We conduct extensive research relative to all products and services in order to learn all that specific categories ins and outs. We don’t just do this sometimes, we do this each and every  time to ensure that we not only have a complete specification, but a specification that will maximize a list of potential vendors, insure quality and drive the best price possible at this particular point in time.  We do that, so that you don’t have to, because we are the sourcing experts.

To understand more about how we can help you source your projects, please contact a SafeSourcing Customer Service Representative.

We look forward to your comments.

 

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Purchase orders. Who needs them?

Wednesday, February 6th, 2013

Today’s post is by Steve Schwerin; Account Manager at SafeSourcing.

Have you thought about managing your purchase orders through an online Purchase Order tool in the past?  Have you acted on that thought?  Maybe this year should be the year.  I know.  You have a way of doing things.  Don’t we all.  Hasn’t the internet challenged almost every one of your standard ways of doing things?  It has mine.   Still, hasn’t it improved timeliness and precision on most of these things despite our reluctance to change?  Why should it be any different with purchase orders?

In a conversation that I had with a purchasing manager over a company with four warehouses recently in which he noted that there just didn’t seem to be enough time in the day to complete all of the tasks he needed to get done.  I bet this goes for many of us on all sides of the procurement industry.  Ideally, we would spend as little time as possible bogged down with routine tasks let alone having to worry about slippage or rogue buying for parts even remotely routine to our company’s spends.  Not that this purchasing manager’s day is spent reviewing purchase order after purchase order, but some of it is.

Wouldn’t a predefined, third party solution save time and maybe even let some of us sleep a little better at night knowing that the terms and conditions, pricing and authorizations have been gone over by three sets of eyes for spends that have been negotiated as lowest price offerings ahead of time?

Then why not spend some of your time inquiring about our SafePO™ service?  I have heard it said that business is never bad; people are just bad at business.  Much of this phrase, dare I say 99%, refers to routine tasks such as follow up and thoroughness.  There are new tools available in the last few years to help with such tasks.  Not that an online Purchase Order Management system is a silver bullet, but does it not leverage the power of computing and the availability of electronic devices for your benefit as well as your business partners?  It actually makes both of you more competitive.  If it saved you and your customers a few hours per month and gave you both peace of mind would it not be worth it?

Bring everyone up with you; let us know how we can help to make you and your associates more efficient, accurate and competitive.   Contact your SafeSourcing customer service representative at 513-360-8440 to find out how.

We look forward to and appreciate your comments

 

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Identifying Opportunities in 2013 and Beyond!

Tuesday, February 5th, 2013

Today’s post is by Steve Schwerin; Account Manager at SafeSourcing.

I read a book written in 1970  titled  Future Shock.  Though the title sounds ominous, it wasn’t about the apocalypse or ancient calendars reaching their terminus.  The authors were trying to communicate the coming changes in world economies not due to negligence, greed or regime change as much as due to technology.

There were opportunities in these disruptions that I think procurement professionals should constantly be reevaluating.  The authors could see the day when much of the current tasks being done would be automated and human creativity could use the new technology in ways only dreamed of before as well as some not yet dreamed of.  I suspect that the author of Future Shock would put procurement professionals squarely in the category of people facilitating this change.  Why?  Procurement professionals are constantly facilitating technology making its way into their organizations and often how.  We see this in various ways.

More Products– We now have more of almost every product available than ever before which makes the marginal cost of using and selling most products less than ever before.

Different Products– Cars, computers and even blogs did not exist at one time.  Variety allows for targeting pockets of micro-demand not possible before the internet and mass production.

More Services– Food services, pest control and B2B services didn’t exist in their present forms until recently.  For instance, it wasn’t until recently when eating out became a common occurrence for the average person.  Pest control?  Grab a mouse trap.  And B2B?  I guess lick that envelope quicker?  What we are seeing today is that scalability allows vendors to add some services at very little extra relative cost, though it may take a little discovery and negotiation.

Different Services– Web design didn’t exist before the web, and what was the form of the customized packaging industry before technology provided for blister packs and plastic bottles in every conceivable shape?  Can any of these services add value for your customer?

Better Services-One thing to keep in mind with services is quality verses quantity.  Can taking another look at SLAs, SOPs, or SOWs add value while costing little verses their benefit to anyone involved in the procurement process.

Adding value and constantly achieving higher levels of service have largely made the above mentioned deliverables possible.  It takes a human mind to recognize and implement any of this, however.  Why not take the bull by the horns in the new year?

What Future Shock was largely predicting these changes would usher in was a more customizable world.  Cost cutting is still perhaps the best way to impact your bottom line.  At times, cost cutting might take the shape of adding something-read customizing-while keeping the cost similar.  What might actually be more valuable to your client is a different product or perhaps a more customized product than others are offering.  Who is in a better position to address this than the procurement professional?

To understand more about how we can help you begin to find your new opportunities, please contact a SafeSourcing Customer Service Representative.

We look forward to your comments.

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Loss Prevention Budget Trends in 2013

Monday, February 4th, 2013

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

As the economy continues to try and right itself, retailers are still looking for ways to save money and cut expenses in their budgets.  This mindset is helping Procurement departments achieve things they historically have not been able to before assisting many new departments with their spends.  Loss Prevention is also increasing its impact as companies are trying to harder to keep the things they have.  Today we will be looking at the relationship between these two departments and some opportunities for them to work together in 2013.

Wireless Infrastructure – Blog after blog has been written about the growing trend of mobile devices in business environments everywhere, so it is no surprise that a big emphasis for retailers in 2013 will be to leverage the power customers’ mobile devices in new ways.  A big part of making this happen involves upgrading the wireless infrastructure within the retail locations not only to interface with customer wireless devices but also with wireless devices Loss Prevention can use to protect the stores.   IP Security cameras, security tags and other new technologies are just a few items that will be leveraging upgraded in-store networks.

Video Equipment/Software – Video surveillance is nothing new in the retail industry as VCRs, tapes and cables running through the ceiling have been transformed into High Definition Wireless IP cameras that can stream video to a remote location thousands of miles away.  In 2013, the trend continues as the technology surrounding Network Video Recorders, IP cameras and Video Analytics continues to improve in performance and cost.  Loss Prevention departments will be exploring all of these technologies in 2013 and will be significant opportunities for procurement departments to assist with.

EAS/RFID – As with video technology, RFID/EAS tags continue improve not only in their size, performance and cost but in the new uses they are able to help retailers with.  In today’s retail world companies are using RFID tags to track promotional items and to ensure brand authenticity.  Also being researched are the new software solutions that always come with improved and new uses of the hardware.  2013 will present many opportunities to work with Loss Prevention to understand these new tools and uses for existing hardware they may have in place today.

Virtual Monitoring – As much as mobile device technology has been written about, cloud technology ranks right up with it.  There are so many new cloud based solutions but one that will get the attention of Loss Prevention departments everywhere are the companies who are offering retailers not only the capability to store video in the cloud but also providing the services to remotely monitor that video from a Loss Prevention standpoint.  Providing trained dedicated resources allows Loss Prevention teams more time to focus on the other aspects of their business and also gives procurement departments an opportunity to help them find these services for their business.

To understand more about how we can help you source your Loss Prevention spend projects, please contact a SafeSourcing Customer Service Representative.

We look forward to your comments.

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In e-procurement, there are no Sacred Cows!

Friday, February 1st, 2013

Today’s post is from Debbie Wilcox Vice President of Marketing and Professional Services at SafeSourcing.

It wasn’t long ago that when you read an article or listened to a seminar about reverse-auctions as a procurement tool, the leader would indicate that the best items for this sourcing strategy were simple, straight-forward, commodity type products. That is no longer the case; there is no product or service that is off-limits when utilizing e-procurement and reverse-auction tools.

Much of the successful outcome of complex or service-related sourcing projects is determined by how the event is structured. Is there enough detail within the lotting structure of an auction to cover a broad range of items and service offerings? Are service level requirements and expectations spelled out and defined effectively? Are top tier national suppliers invited to participate as well as regional and local alternatives?  Are you collecting enough data to make a decision based on quality, terms and other value added services as well as overall price competitiveness?

SafeSourcing has recently conducted very successful auction events for many service related categories including professional legal services, temporary labor, security guards and janitorial cleaning services to name a few. All resulted in high double-digit savings percentages for our customers. Did we get initial push back from internal stakeholders? Yes, in many cases we did. But once we laid out the strategy, addressed concerns and completed the sourcing events, the savings results from quality supplier options equated to project success.

If you are looking for new sourcing opportunities and new categories for savings, reverse auctions can be used for procurement of all product and category types, including those that have traditionally been viewed as highly complex.

Why not reach out to a SafeSourcing Customer Services representative in order to learn more.

We look forward to and appreciate your comments.

 

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