Archive for October, 2013

Be careful when you let the foxes rule the henhouse! Or in this case the fishermen rule the certifications!

Thursday, October 31st, 2013

I was reading a blurb in the Financial Times recently titled Big buyers of seafood rethink eco-labels by Aaron Stanley. The article went on to describe how Alaska fishermen have stopped supporting eco-labeling routines from the Marine Stewardship Council because they were too costly and supposedly eroded their brand.

I’m all about brand image, so here’s a question for you. Have you ever been on a commercial fishing boat? I don’t care if it’s a long line boat, a crab boat or a lobster boat. If you have, I don’t need to say much more. And just how fresh is that fish that was caught on the first day of a ten day trip? I’m just saying! By the way, I grew up on the Atlantic Ocean and my brother in law was a commercial fisherman. I also have friends in the lobster business.

This is not a subject we have not posted about in the past.  We have covered the MSC on a number of occasions. In a 2011 post titled Getting to Know the Organizations Helping to Protect Us – Part 3 of 4 we discuss the MSC and they are also listed in our SafeSourcing Wiki. These people care about our oceans and our fisheries and their long term sustainability.

If you’d like to know what suppliers you can speak with that support the MSC eco-labeling schemes, SafeSourcing will be glad to find them for you in our SafeSourceIt™ Supplier Database where we hold suppliers accountable to safety and environmental certifications.  Or in this case you could visit MSC track- a- fishery program.

SafeSourcing supports our global environment, food safety and safe products.

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

We look forward to and appreciate your comments.

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Procedure lists: Are they really worth your time and energy to create?

Wednesday, October 30th, 2013

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

What is a Procedure List?

When you write down ten things you want to get done today and cross them off at the end of the day when they are done, that’s not a procedures list, it’s just a simple but rewarding — “checklist”.

Let’s consider a mechanic’s job…when a mechanic goes through a list of 50 things to check and evaluate on your car (and every other car they’re going to service); they’re using a “procedure list”. A procedure list highlights the things you need to do in a routine process to ensure that everything is done and nothing gets neglected or outright forgotten. Consider the following when creating your procedure list:

•  Is this step necessary?  Why is this step included?
•  Is this step in the right place?  Should it come sooner or later in the procedure?
•  Is each step a concrete action that can be completed and checked off?
•  Are the steps clear enough that I could give this procedure list to another person without explanation?

The last bullet above is extremely crucial.  Let’s take for instance you’re deep into a project, something unforeseen develops taking you away from the project. Can a coworker step in and take over as if you were still there, with no drop-off in project timelines and milestones?  Consider this carefully when creating your procedure list.

Why should you use a Procedure List?

We all are very busy and likely to be even busier. Making mistakes and forgetting steps even in tasks we’ve been doing for years is not uncommon.  Procedural lists serve as concrete reminders of what tasks we need to perform, what order we need to perform them in, and as springboards for fine tuning or adjusting our routines, making them more efficient.

We, at SafeSourcing, take great pride in the fact that we continually use our procedure lists and consider them to be a “best practice” which has kept our projects on plan. This practice has rewarded our customers with savings they would not have otherwise attained and in the timeliest manner. 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.

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The “Green” Movement is dying….or is it just misunderstood?

Monday, October 28th, 2013

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

The Green Initiative has been the focus of much attention over the past decade as companies have tried to become “greener” and ideas whose funding has been backed by Federal clean-energy programs were born by the dozens.  With all of the attention it would seem that we would be making great progress on the country and businesses developing a greener footprint.  On closer examination, it seems as though the successes have been limited to a much smaller group than was expected.  In a recent article in The Washington Times the details were released concerning yet another company who was given Federal assistance in order to develop “greener” products.  In fact dozens of Federally assisted companies who received money from the Department of Energy have struggled and in many cases filed for bankruptcy.

1. {http://www.washingtontimes.com/news/2013/sep/6/energy-department-loses-42-million-loan-michigan-c/}

2. {http://blog.heritage.org/2012/10/18/president-obamas-taxpayer-backed-green-energy-failures/}

Lack of Committment – As with any program a company choses to implement, the lack of leadership support is the prime reason a program finds an early grave.  While everyone will agree that creating a greener planet is a good thing and they that they want to do what they can to support making it happen, at the end of the day business is business and the bottom line is the measure of ultimate success.  Getting support for green initiatives should start with those things that also positively affect the bottom line.  Initiatives that cost $100,000 up front but that will return an ROI of 5-10x will receive much more support than one that costs $10,000 and takes 10 years to recoup.

Lack of Planning – There are many aspects of planning a new green initiative (accountability assignment, longer term goals, communication) that should be taken into consideration as seriously as any other corporate objective for success to be achieved.   Because Green initiative projects do not always have the support as mentioned above, being able to define and measure goals for the project become even more critical.  Without accountability and measurable goals, the initiative will quickly lose momentum and excitement and become the “Program of the Month” to be filed away with the others that did not succeed.  Short, medium and long-term goals should be developed to create a constant flow of little victories while also moving the project and giving the company visibility into the value the project brings.

Time & Money – The two greatest resources an individual or company has apart from the human variety are time and money.  The greatest ideas in the world have failed to ever make it out of the gate in large part because of one or both of these things.  The best planning and executive backing will not help if there is not enough time for your company to invest in the project in the midst of conducting normal business.  Likewise the cost of a project or presence of/lack of an ROI can also keep a project stalled or kill it altogether.  Another important piece of this can be the lack of personal incentive to get a project done.  When projects aren’t part of an individual or departments performance evaluation it tends to be the first thing that gets pushed to the side and replaced by more important projects.  Allocating time and money, understanding how it can positively affect your company’s financial landscape and attaching the success of a project to performance appraisals will help ensure the project is a success.

While there have been struggles and challenges with sustainability initiatives recently, SafeSourcing believes in the value of pursuing them and is committed to helping our customers make them successful for their companies without creating a conflict with the demands of running a business.  For more information on how SafeSourcing can assist with preparing for your next “event” 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.

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Are you continuing your education?

Thursday, October 24th, 2013

Today’s post is by Heather Powell, Project Manager at SafeSourcing Inc.

Did you think you were done with your education? Graduated with Associates, Bachelors, or even a Master’s Degree?

Did you find our dream job in your chosen field of study? Did you find a job outside of your chosen field of study? So long as you are working and are happy at what you are doing are the primary goals, right?

No matter where you work, what your job title and responsibilities are, your education never stops, even if you have a piece a paper that says you are done.  

Examples? A mailroom clerk can learn to organize in such a way that minimizes time to save the company hours in wasted pay, or learn to ship more efficiently saving thousands in shipping costs.

A maintenance person can learn various ways to cut costs or use eco-friendly products to help save money and the earth!

A project manager for an e-procurement company can attend a free webinar about Software and Technology Solutions for the Food Supply Chain to learn how new technology can save their customer hundreds of thousands of dollars in various ways to ship their goods from point A to point B.

A CEO reads several daily business journals, newspapers, and books to learn what the trends are in the business world or inspirational business and educational thoughts from the syndicated columnist Harvey Mackay. All to share with his employees and improve and grow his business.

You should never stop learning and being educated. It is what moves you forward in life. Do you want to learn how SafeSourcing can help you and your company save money, time, and become organized? Please contact a SafeSourcing customer service account manager or call 888-261-9070.

We look forward to and appreciate your comments.

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The Affordable Care Act a Procurement Implementation Disaster

Wednesday, October 23rd, 2013

Todays post is by Ron Southard, CEO at SafeSourcing Inc.

I’m sure that there is no one reading this post that has not heard about the disastrous implementation of the Affordable Care Acts website. Although there are other ways to apply for coverage such as by telephone, the vast amount of coverage has been about the implementation of the website and its lack of accessibility.

This author reads several newspapers every day. They include but are not limited to The Wall Street Journal, The Arizona Republic, The Financial Times and USA TODAY. Quite often when I am traveling I read local papers as well. I augment that with several posts such as the Huffington Post. As such, I have read and viewed a lot of commentary and viewed a lot of political cartoons about the missed opportunity our government had to deploy a quality product regardless of the political support it has publicly to its constituency (The Public).

The first question that comes to mind is; did anyone with any procurement experience have anything to do with the development of the website and registration tool? If they did, they should be fired. Since we can’t fire our elected officials, we should fire their appointed individuals. If a tool deployed by my company had the success rate of this tool, the customer would fire us.

The fact is that exchanges have been around for a long time. As an example, The New York Stock Exchange comes to mind. Exchanges for buying products and services have been around for more than a dozen years.

So the next question, is did we ask anyone if the technology already existed to implement a competitive tool that would allow millions of people to bid their insurance needs with as many as fifty potentially different implementations (50 states) supported by a diverse insurance supplier database.

The basis of all quality development begins with a simple three pronged strategy. That is Person, Product and Process. I know this can get very detailed, but in this case the Person is the general public, the product is the tool that allows you to list a product for sale (your policy requirement) of which there are four types  and a process that insurance companies (the suppliers) follow in order to bid for the business. This sounds like and RFP or actually a Reverse Auction to me. SafeSourcing has sourced these types of insurance products for companies in the past. Doing it for individuals is not much different philosophically. There are many other players in the procurement space that can make the same claim.

Finally since we know the audience we are targeting it is pretty simple to test the system for the volume of activity you might expect. I know that our Website would handle a state implementation very easily.

So is ObamaCare also known as the Affordable Care Act a good program.  I’ll leave that up to each of you to determine. Was the deployment of a tool that offers everyone regardless of preexisting conditions some level of coverage done professionally and with the proper oversight? The answer here is obvious. It’s NO.

To learn more about SafeSourcing, please contact a SafeSourcing customer services account manager or call me at 480-773-7524.

We look forward to and appreciate your comments.

 

 

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How committed are you to your own success with your new e-procurement tools?

Monday, October 21st, 2013

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

Many projects fail when companies implement them. Probably a much higher percentage than you might believe. Just take a look at the new Obama care website.

 It’s no different when implementing new procurement technologies. You can install it behind your firewall. You can use SaaS based tools. You can pick any toolset in the Procure to Pay process from eRFX tools to Contract Management. If you are going to be successful with the launch of your new e-procurement tools, you have to be committed to the process. This really is about nothing more than how prepared you are as a procurement knowledge worker regarding procurement in general and your category, product or service specifically. If you are committed, then you should be prepared. There really is no excuse to not be.

In order to be successful at e-procurement or the online or SaaS based e-RFX process, a procurement knowledge worker has to be committed to the process. First of all this means they have to understand the process. Beyond training in tool utilization, this suggests a willingness to share information relative their buying patterns as well as what their expectations are for selecting a new supplier to work with. All of this must be shared with their new solution provider.  Category managers, buyers and other knowledge workers that interface with the supply chain should be communicating regularly with their incumbent suppliers regarding current market conditions, quality, delivery and other potential pitfalls as part of their job.  If issues do exist they need to be discussed and documented so they can be reviewed with your new e-procurement solutions provider and included in the e-RFX setup and strategy. 

To be committed to the procurement process, procurement knowledge workers must be prepared to answer questions from suppliers even if the answers are to be issued through your solutions provider.  If you act as though you are not committed to this new process, your incumbent supplier as well as potential new sources of supply will pick up on that immediately. 

The bad news for your company is that if a buyer or category manager acts as though they do not support this new process, holds side bar conversations that mitigate its use or raises other red flags in the supplier community, you will not get the best pricing, you will not get the best quality and you will not have the best supplier relationships into the future.

If you tools are not working for you, contact a SafeSourcing customer services account manager for assistance.

We look forward to and appreciate your comments.

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What is a collaborative supply chain?

Wednesday, October 16th, 2013

Todays post is by Ron Southard, CEO at SafeSourcing.

The fact is that internal collaboration is not happening in many companies and neither is collaborative aggregation.

We often hear the term collaboration or collaborative partners, collaborative supply chains, collaborative commerce or collaborative networks when we are discussing the supply chain. It rolls of everyone’s tongue like we all know what we are talking about. So this author took a look at Wikipedia hoping to gain some insight and clarity. According to Wikipedia, Collaboration is a recursive process where two or more people or organizations work together toward an intersection of common goals, and, an aggregate is a collection of items that are gathered together to form a total quantity.

Since collaboration only means different groups or organizations working together towards the same goal, that term can apply to just about any business function. However when we combine it with the word aggregate to form the collective e- procurement term Collaborative Aggregation which was coined by this author in 2006; we arrive at something potentially meaningful.

Collective buying organizations and sometimes share groups often combine purchasing volumes of like products to drive better discounts. Large companies often aggregate their purchases among departments and are more often today doing the same thing across different operating group’s or companies within a larger organizations to drive economy of scale in purchasing.

The unfortunate truth is that not much out of the box thinking is going on in this process. We are so involved in the process that we can not see the forest for the trees.

If you’d really like to understand how collaboration and aggregation can be used in your company to drive down costs and improve quality, please contact a SafeSourcing customer services representative.

We look forward to and appreciate your comments.

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Suppliers, what makes you different?

Tuesday, October 15th, 2013

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

One of the biggest Supply Chain topics for 2013, as it is every year, is the concern over rising costs and shrinking profits, and unfortunately this is the stigma attached to many eProcurement tools and practices.  We tell our customers and the suppliers who participate in our events it is about more than just price; it is about the overall value that is presented.

Today we will be looking at ways that suppliers can distinguish themselves from their competition in areas other than price.

Labeling and Packaging – Labeling and packaging are one of the big expenses in For Resale items for many retailers especially when it comes to Private Label goods.  Suppliers who are willing to work with their customers to develop packaging that will streamline the receiving and sales process can gain a big advantage over their competitors in a way they can leverage to great value.

Training & Professional Services – One of the easiest ways for suppliers to begin to separate themselves from the pack is in the area of professional services and training.  For the supplier these services can generate a value to their customers that far exceeds the actual cost of the service itself.  In this case it is a win-win situation where the customer gets valuable services while the supplier gets an opportunity to continue to build on the face-to-face relationship in a useful manner.

Guaranteed Service Level Agreement (SLA) Metrics – The bottom line in any Supplier-Customer relationship is not just price or “bells and whistles” it is about how well the supplier delivered what they promised, how they dealt with situations when they didn’t deliver as promised and what they are willing to risk if they fail to achieve on the Service Level they promised.  Getting the best price means nothing if the product or service is of low quality or is late.  The best suppliers OVER service their customers and are willing to stake a portion of their cost on their ability to achieve that level of service every time.  These guarantees may not always translate to your bottom-line in a positive way, but not having them in place and receiving poor quality will definitely impact it in a negative way.

For assistance on helping you work with your suppliers on the extra value they can offer you, please contact a SafeSourcing Customer Service Representative.

We look forward to your comments.

 

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It’s a Marathon, Not a Sprint!

Monday, October 14th, 2013

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

As I write this blog preparing for my 3rd half-marathon it makes me pause and think about the procurement world I am a part of every single day.  Whether actually working on a project or thinking about a project I have just completed or am about to work on, the preparation and execution of successful procurement practices is not that different than that of preparing to run a ½ marathon.  In this blog we will look at some of the similarities between preparing for a race and for a procurement event.

The Goal – I remember when I ran my first 5k and then my first 10k and then my first ½ marathon.  My only initial goals were to finish.  I did not care about getting a great result, I just wanted to finish in a way that would keep me coming back.  As I did more and more races a funny thing happened; I started tracking and measuring my times.  My focus shifted and was not just on completing, it was on improving.  I never could have gotten there at the start though, it took time.  Procurement projects for many categories, especially where the spend is fragmented across multiple suppliers or not completely known, can be approached in a similar fashion. Get through the first pass and achieve a basic goal of consolidating SKUs, suppliers or services received.  This helps get things organized and positions things well for the next event.  The next event is where the major improvements in service levels, contract terms and pricing can be a focus.  Set the goal and drive toward it from the beginning and then keep improving.

The Preparation – Any runner will tell you time and time again that the results you achieve are directly tied to the time and energy you took to prepare well in advance of the event.  While there are differences in the details for training schedules from the web, coaches and books, there are some common principles which can apply to procurement projects.  The first step is to allow the time to properly prepare.  The timeline makes all the difference.  It keeps you on track and it helps ensures that all of the necessary pieces are laid out to be completed while not overwhelming you with too much to do in too short of a time.  Preparing with another person or a team is a second step many runners employ to prepare and this is no different in a procurement project.  Having the right team members to prepare, encourage and execute the project is very important to the outcome you will achieve.  Finally there are long run days.  These are days designed to not only build up endurance but to mentally prepare you for the event so there are no surprises on race day.  In procurement terms these translate into vendor checkpoints.  These constant communications to train and answer questions ensure that there also will be no surprises in the supplier performance the day of the event.   Great things happen when everything is well planned out, disasters will happen all by themselves.

The Day of Event – With all of the time invested in preparing for the event, frequently runners will forget important details the day of the race that can seriously affect the hard work and preparation put in.   In much the same way, forgetting event day details can ruin the preparation of a good event.  First, make sure your team knows which suppliers they will be supporting and that they have the appropriate communication details if they need them.  Second, don’t try new things on event day.  Stick with what you know works and adjust as issues arise; and they will.  Third, remember your goals.  Don’t get caught up in a new supplier who is going much lower than the rest of the pack.  If your goal is to consolidate and get control then it may be more important to track you incumbent’s progress so that change is minimal and keep the new low bidding company in mind for a few test areas to judge their performance.   Finally, have fun!  The day of the event can be stressful but it is the part of the process we all get into procurement for; the excitement of creating value, of meeting the goal, and of improving from where you once were.

Goals, preparation and hard work are no more challenging for a runner than for a procurement professional and neither is the satisfaction and reward when that work pays off.  For more information on how SafeSourcing can assist with preparing for your next “event” 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.

 

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How does your organization ensure that every award of business is implemented or delivered as awarded?

Friday, October 11th, 2013

Stopping contract leakage is one of the most difficult tasks in the entire procurement lifecycle. To begin with, you need to understand where the data to be measured is kept. Good luck if you do not have a contract management solution. Once you have a clear idea as to the location of the data, it needs to be looked at on a regular basis in order to insure leakage is not occurring. The question here is what constitutes leakage and how often it should be reviewed such as monthly depending on contract language. Most contract management systems have alerts that can be triggered as frequently as required.

If you had a contract management system, most of the following list speaks too many of areas in which contract leakage can occur and can also be measured. These discrepancies happen in all companies large and small. If you are aware of them, capture them and report on them there is a reasonable possibility of controlling them. Again, you can’t do it without a contract management system

1. Buying without a contract.
2. Expensing something outside of a contract
3. Having multiple contracts in place:
4. Executing a new agreement when one is already in place
5. Paying a price different from the contract
6. Delivery variances
7. Quality specifications variances
8. Making payments at a prices different from the contract
9. Scope creep of the product or service purchased without change control
10. Resulting Invoice discrepancies
11. Missed volume discounts
12. Insurance discrepancies
13. Shipping discrepancies
14. Expired contracts resulting in price uplift (evergreening)
15. Overtime Violations
16. Material discrepancies
17. Sub Contractor discrepancies

Don’t work hard to drive benefits from your procurement organization and then lose much of what you have gained due to contract leakage. Ask your e-procurement solutions provider how they can help.

We look forward to and appreciate your comments.

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