Archive for September, 2013

Have you ever played liars poker?

Wednesday, September 25th, 2013

Today’s post is from Ron Southard, CEO of SafeSourcing Inc.

When SafeSourcing says it has 5 suppliers (think 5 Aces) it does.

Locating, managing and updating supplier information for companies you may choose to do business with has never been more difficult. How many former suppliers from let’s say 4-5 years ago are no longer in business? How many newer companies have evolved or taken their place? I already know the answer you are going to give me. It’s I don’t know.

We keep hearing about big data. What you need relative to suppliers beyond just their name is more data. With new regulatory requirements emerging daily, economies failing, the supply chain shrinking in some places and expanding in others,  changing  safety factors and  environmental factors ( think LEEDS), detailed supplier information and traceability are but a few of the issues that require regular maintenance in order to mitigate a company’s risk.

Solution Providers like SafeSourcing that provide supplier databases (SafeSourceIt™) that are part of automating the procurement process, need to step up and make sure that their data support these changes on a regular basis to the greatest extent possible by providing tools that interact with both regulatory agencies and suppliers  in order to insure consumer safety and environmental impact.
Particularly as more new sources of supply and a continual stream of new products enter the supply chain daily.

Actions that solution providers should take include but are not limited to:

1.  Monitor daily alert data as to product recalls and safety warnings.
2.  Trace warnings back to the original source of supply automatically and maintain history.
3.  Require that suppliers meet certain safety certifications in order to participate in their database.
4.  Require that suppliers meet required environmental certifications or programs in order to participate in their database
5.  Provide a regular purge of suppliers that do not comply with necessary standards.
6.  Validate the entire database regularly for companies no longer in business
7.  Adhere to a strict RFI process for new suppliers requesting participation in your database.
8.  Provide a KPI rating system for suppliers you offer to companies as new sources of supply.
9.  Monitor regulatory agencies such as ISO for new standards and include them as further requirements for suppliers in your supplier databases.
10. Conduct on going category research for evolving new sources of supply.
11. Compare your best customers GL to your database for additions deletions.

Ask your solution provider what their process is to grow manage and maintain their supplier database for your benefit.

If you’d like more information on the SafeSourceIt™ Supplier Database of over 427,000 cleansed global sources of supply, please contact a SafeSourcing customer services account manager.

We look forward to and appreciate your comments.


PLEASE! End your meetings on time…Part II

Tuesday, September 24th, 2013

Today’s post is by Dennis Nicoletti; Manager at SafeSourcing

This is Part II from the previous post on August 21st 2013 titled PLEASE!  End your meetings on time

If you recall from last month’s post I titled a topic: “The meeting facilitator is uninformed or without an agenda”.    I wanted to share a quick story.  Not too long ago, during a team meeting our department director wanted our department to be recognized as proficient and productive and to stop the meeting craze that was prevalent at my previous company.  He stated that going forward we are to decline meetings that did not have an agenda within the invite.  Although that sounded a bit extreme it did resolve the numerous meeting invites without a known purpose/objective.  Give it a try…see what happens. But be careful it’s not an invite from your boss.

Have you ever been asked to be the Silent Participant? Sometimes being the ‘silent participant’ in the meeting is a position of respect – your boss may want to re-hash the meeting with you at a later time, have another pair of ears and a second opinion of every detail – let’s face it, we do miss some of the content when we participate. It may at first seem needless or a waste of resources but think of being in the meeting as working – because you are!

Keep Your Questions Brief. When asking questions, be succinct and clear. If your question is detailed, break it into parts or several questions. But be sure to ask only one question at a time; others may have questions as well.

The cell phone.  Abstain from electronics.  Just as the movie theaters requests, “Please silence cell phones”. Unless you’re expecting an emergency call put phones on silent or vibrate. You should also inform the meeting leader that you may receive an emergency call. Additionally, unless laptops are required for sharing data don’t bring or open one…unless that’s how you take notes. Keep in mind that taking notes on a laptop can be distracting to the meeting participants and or facilitator.

Respond to Action Items. After the meeting, be sure to complete any tasks assigned to you as expeditiously as possible; file your meeting notes or any formalized minutes for later review or to have in order to prepare for future meetings

We, at SafeSourcing, take great pride in practicing proper meeting etiquette which in turn allows us to be great business partners for you, our valued client.  For more information on how we can help you with your procurement needs or on our “Risk Free” trial program, please contact a SafeSourcing Customer Service Representative.  We have an entire customer services team waiting to assist you today.

We look forward to your comments.

If you conduct your sourcing as a market basket or product alone and you’ll leave value on the table.

Thursday, September 19th, 2013

Today’s post is by Ron Southard, CEO at SafeSourcing Inc.

Market basket sourcing has been around for a long time. Most of us are familiar with a market basket as something we see or use in a supermarket. Every market basket is made up of different items and different quantities of items based on the needs or desires of the individual consumer. The majority of the mix is based on use both planned and historical. In today’s age of big data, the relationships of these items one to another or their affinity is also important although not necessarily well understood. An example would be why someone buying baby diapers might also be buying beer and chips and how that may influence sourcing decisions.

As such it is the uniqueness of these individual market baskets that should concern business owners when they develop their sourcing strategy. This applies as much at an individual shopper level for a retailer as it does at the business to business level.

Understanding the unique characteristics of products and their relationship to other products is key to understanding how to source those products. Just as retailers look at the their top deciles of customers and try to figure out how to get better wallet share from these groups by understanding the mix of the products they buy; businesses can look at the top deciles of the goods and services they buy to conduct their business and figure out how to get a better price for the items they sell or use most frequently. A market basket approach to sourcing where everything is lumped together will never accomplish the compression goals set in a companies sourcing strategy.

Sourcing based on the top deciles within a particular product category on an item by item basis not only drives the best possible compression, it also creates data relative to products and services where incumbents or awarded suppliers are not competitive. This data is extremely useful in setting next cycle strategies. It is also important as to your supplier strategy in terms of who to invite to participate, such as specialty suppliers or regional suppliers within certain deciles of spend.

Sourcing using market baskets combined with sourcing based on deciles as well as strategic unit sourcing will achieve the best overall results over time. To learn more please contact a SafeSourcing customer services representative.

We look forward to and appreciate your comments.

Have you ever sourced hand dryers?

Tuesday, September 17th, 2013

What’s the most cost effective action that companies of all types and sizes can take to help reduce the number of food born or airborne illnesses?

This can be a simple statement posted in your building washrooms and reflected in your company’s socially responsible language.

I was reading USA TODAY (I do this every day). I love their Snapshots at the bottom of each section. This front page USA TODAY Snapshot was titled Has news coverage on airborne/foodborne illnesses prompted you to wash your hands more by Rachel Huggins and Veronica Bravo.  The snapshot sites Bradley Corps Healthy Hand Washing Survey and indicates that 54% of those surveyed said NO and 46% said YES.

Personally I find these results disturbing. Just think about how often you shake someone’s hand and then think about what they were doing in the 15 minutes before you met. Maybe Howie Mandel has it right by just doing the fist bump.

If the answer to this survey were 100%, it would be interesting to see what the impact on these types’ illnesses would be. As a result, this author will continue to write about food safety and strategies that companies can take to reduce them

Go wash your hands.

We look forward to and appreciate your comments.

How does the Law of Diminishing Return apply to eProcurement RFQ reporting?

Friday, September 6th, 2013

Today’s post is from Ryan Melowic, Assistant Vice President, Procurement COE at SafeSourcing

My experenience with eProcurement RFQ reporting is that procurement team’s eyes are often bigger than their stomachs.  I say that because there are lots of numbers gathered during an eProcurement RFQ.  That data can be sliced and diced many different ways in order to show many different scenarios.  What procurements teams need from an eProcurment RFQ is just a few options.

One option is to look at all Low Qoutes.  What this identifies is how many vendors would need to be awarded  in order to relize maximum savings.  AS an example when  a company has 81 current suppliers and they can now award 14 companies in order to maximize savings it makes good sense to explore this oppritunity because 14 suppliers represents an 83% reduction in sources of supply and the administrative improvements associated with that reduction..

A second option  to consider is that of Low Company.  This  provides a single source of supply option.  In some cases it’s just plane scarey to put all of a companies eggs in one basket.  In most cases this option is a reduction in savings compared to the all low quote scenario.

A third option to consider is a hybread award scenario.  This  takes into consideration low quotes, overall low companies and potential another option like by division or number of vendors.  Typically, the top preformers are defined globally and then  an analisys is  conducted by location.  This data shows which of the top companies show the most savings by location.

A final option  might be to identify what saving looks like when vendors are selected by division and a split award is considered.  For instance if a company has 10 locations 3 locations are awarded to one vendor  and the remaining  to another.  When you do this type of scenario analisys  savings numbers are typically reduced.

When you apply the Law of Diminishing return to eProcurement RFQ reporting please keep in mind anything outside of what procurement teams need to make the award descion is an over abundance of data.

If you are interested to learn how  the SafeSourcing’s team can help your company get the right amount of data in order to make a descion please contact our customer service team.

We look forward to and appreciate your comments


How should your company structure for procurement success?

Tuesday, September 3rd, 2013

Today’s post is by Ron Southard, CEO at SafeSourcing Inc.

During a lunch meeting last week a retailer asked us what they should consider in terms of structuring their procurement professionals to fully embrace e-negotiation tools.

Our answer is certainly not a complete one, but the following points are areas that should be considered for any supply chain re-structuring including what is needed to drive success while trying to fully embrace SaaS e-negotiation technology. These steps will get you headed in the right direction towards achieving the greatest possible return on investment.

  1. Gaining executive (CEO) level and other stakeholder (Board) support
  2  Get your supply chain organization structured for success
  3. Do a detailed analysis of your direct spend
  4. Do a detailed analysis of your indirect spend
  5. Do a detailed review of planned capital project spends and allow of add ons
  6. Plan a detailed review of all contracts.
  7. Plan a detailed review of all suppliers
  8. Develop better relationships with existing suppliers
  9. Improve the performance of suppliers.
  10. Gain access to additional sources of supply
  11. Improve your view of all spend categories.
  12. Develop a detailed off shore and near shore strategies.
  13. Review all sourcing methods used today.
  14. Review all Environmental strategies
  15. Review all Product Safety strategies
  16. Create a product specification library
  17. Conduct detailed category discovery
  18. Align all of the above with your SaaS  solution providers recommended strategy
  19. Ask all department business owners to sign a sourcing collaboration agreement
  20. Streamline, streamline, streamline.

As you use the above list and grow it, it is important to remember that the job of a procurement management leader is to think outside of the box and educate while looking for innovative ways to do things better, faster and at a lower cost. And to hopefully create an environment that will inspire co-workers while doing that.

Reach out to a SafeSourcing customer services representative if you like assistance getting your procurement strategy aligned.

We look forward to and appreciate your comments.