Archive for May, 2014

Seeking Approval for E-Procurement Tools

Friday, May 30th, 2014

Today’s guest post is by our good friend Eugene Duynstee President and CEO of KPM Enterprises  

Pity the purchasing manager who wants to go to his/her boss and ask for approval on an e-procurement program to support the work they are doing. Typically understaffed and over worked, many senior executives fail to see the potential value of e-procurement. They expect the manager to source goods and services in the usual way and get the best price. How hard can that be? What else could be needed for this?

Naturally the manager would go through the usual process, and when asked, he/she can say that they talked to several suppliers, negotiated the best price, and here it is. So everyone believes they have done their job and secured the best price available.

But in actual fact, if you truly want to go after the best cost for the level of quality and service you need then it does take a different approach and new technology. The purchasing team has the potential to contribute substantially more value to the organization, but only if equipped with the right tools and right process.

This is where e-procurement comes in, and delivers:

  • State of the art e-auction software that encourages vendors through a reverse auction process to present their actual best price. Interesting that in most cases the incumbent comes in lower than their stated best price and in many cases by a substantial amount.  Studies have shown that this cannot be achieved through the traditional RFP process. With an average savings of 24%, it is hard to justify not using e-procurement.

  • Better and faster RFPs – the traditional process is a huge effort ranging from document creation, sourcing vendors, response assessments, recommendations, and award of business. E-procurement can deliver 3-5 times more RFPs than the traditional process in the same amount of time.

  • Process documentation – all the activity throughout the process is captured electronically providing not only access anytime, anywhere, but also providing a complete audit trail.

So in fact, e-procurement should be an easy sell. You certainly don’t want your competitors getting that cost advantage while you lose out on it. And when you see so many companies and government organizations (the US is well ahead of Canada on this) adopting the e-procurement process, getting on board only makes sense.

If you’d like to learn more about how SafeSourcing or KPM can help you with your procurement needs, please contact a SafeSourcing Customer Services Account Manager.

We look forward to and appreciate your comments.

Teamwork within a Moment of Crisis or Emergency

Thursday, May 29th, 2014

Today’s post is written by Heather Powell, Manager of the COE Department & Project Manager at SafeSourcing Inc.

“The strength of the team is each individual member. The strength of each member is the team.”
― Phil Jackson

While these guideline were created for management roles, it is important to note that in a team environment that these suggestions apply to ALL members of the team:

          Resource: http://www.opm.gov/policy-data-oversight/worklife/reference-materials/traumaticevents.pdf

Many of us in businesses are ill-prepared to handle the traumatic events- death of immediate family members, natural disasters, accidents, etc., and yet these events can and do occur in our workplaces. They are events, for which preparation helps.

Let all employees know that you are concerned and doing all you can to help them. You represent the organization to your employees, and your caring presence can mean a great deal in helping them feel supported. You don’t have to say anything profound; just be there, do your best to manage, and let your employees know you are concerned about them. Be visible to your team, and take time to ask them how they are doing.

Let people know, in whatever way is natural for you, that you are feeling fear, grief, shock, anger, or whatever your natural reaction to the situation may be. This shows your employees you care about them. Since you also can function rationally in spite of your strong feelings, they know that they can do likewise.

Share information with your employees as soon as you have it available. Don’t be afraid to say, “I don’t know.” Particularly in the first few hours after a tragedy, information will be scarce and much in demand. If you can be an advocate in obtaining it, you will show your employees you care and help lessen anxiety.

Encourage employees to talk about their painful experiences. This is hard to do, but eases healing as people express their painful thoughts and feelings in a safe environment, and come to realize that their reactions are normal and shared by others. Your team may prefer to discuss the situation among themselves. Don’t be afraid to participate, and to set a positive example by discussing your own feelings openly. Your example says more than your words.

Build on the strengths of the group. Encourage employees to take care of one another through such simple measures as listening to those in distress, offering practical help, visiting the hospitalized, or going with an employee on the first visit to a feared site. The more you have done to build a cohesive work group, and to foster self-confidence in your employees, the better your staff can help one another in a crisis.

Build on your work group’s prior planning. If you have talked together about how you, as a group, would handle a hypothetical crisis, it will help prepare all employees, mentally and practically, to deal with a real one. Knowing employees’ strengths and experience, having an established plan for communication in emergencies, and procedures can help you “hit the ground running” when a crisis actually strikes.

Be aware of the healing value of work. Getting back to the daily routine can be a comforting experience, and most people can work productively while still dealing with grief and trauma. However, the process of getting a staff back to work is one which must be approached with great care and sensitivity. In particular, if anyone has died or been seriously injured, the process must be handled in a way that shows appropriate respect for them.

teamwork

While we, the team at SafeSourcing, are no stranger to moments of emergency or crisis, we pull together as one team and one family ensuring that our customers and suppliers are taken care throughout our crisis. We take pride in offering the best customer service in the industry and will do whatever it takes to ensure that it remains our top priority and invisible to the outside world. 

For more information on how SafeSourcing can assist you in exploring your procurement solutions for your business 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.

Fuel Cells In The Warehouse!

Wednesday, May 28th, 2014

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

Hydrogen fuel cells are one of the hottest new technologies on the market today.  This technology captures the electrical energy from a chemical reaction such as hydrogen and while it was introduced in 1838, the practical application is just beginning to pique with major retailers and manufacturers planning on increasing their use over the next few decades.  Today’s blog will look at a few of the current applications corporations are looking to so that they can leverage the advantages of fuel cells.

Warehouse Equipment – Warehouse equipment that has been configured to be powered by fuel cells instead of traditional batteries is growing.  Companies like Wal-Mart, Procter and Gamble and Mercedes are all committing to long term use of fuel cell technology with agreements to purchase new technology that will reduce costs and increase overall power at their disposal.   A recent study by the National Renewable Energy Laboratory stated that Total Cost of Ownership even with current technology costs can be reduced from 5-10% and that will increase as the cost of this technology gets cheaper and cheaper to manufacture.

Backup Power – Backup power grids can be critical for hospitals, businesses and retailers and even more so in areas of the country prone to hurricanes, snowstorms and tornados.  Traditional supplementary sources can be effective but since they are powered by fuel that can also be difficult to obtain in a natural disaster, more and more organizations are looking to fuel cell technology to augment or replace their current backup power grid.  Originally designed for NASA equipment for remote application, the development of closed loop fuel cells can use air and solar power to provide a backup “off-the grid” power solution that does not depend on outside fuels.

Employee Vehicles – It seems like the next big thing in the auto industry is the emergence of Electric Vehicles, however all news reports state that major manufacturers are moving away from Electric Vehicles towards hydrogen fuel based on cost and based on newly 0% emissions and on a solution that has more long range power and efficiency.  Currently Toyota is leading this charge but manufacturers like Honda and Hyundai are also committing long term to hydrogen fuel cell development.  The potential to develop a closed loop vehicle with little to no need of fossil fuel is the eventual goal and one which would clearly change the landscape of business and logistics across the world.

For more information on how SafeSourcing can assist you in exploring fuel cell solutions for your business 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.

How should companies determine value? Part III of III.

Tuesday, May 27th, 2014

Last Friday I asked you to check back today for Part III of this post to learn why our customers and associates are passionate about SafeSourcing

Today’s post is by Ron Southard founder and CEO of SafeSourcing.

We launched our company SafeSourcing  over six years ago. Our goal during that time was to bring passion and commitment to the procure to pay process. I was in a meeting with a customer a few weeks back and asked if they would be adding additional staff to support the work we do together. The answer was not directly to the procurement team, but because of the work we do together; other departments will be able to benefit by maintaining headcount that might not have otherwise. This may not be job creation, but it certainly is job preservation. The customer I was speaking to has also added a number of associates both temporary and full time to support the work we do together over the last several years and we have added several associates to support this customer alone. So, we have created jobs for our customer, preserved jobs for our customer, created jobs for our company and saved our customer millions of dollars at the same time. I can’t think of a better value equation and if that’s not meaningful work I’m not sure what is.

Procurement in general may not be the profession of choice for many, however it is a place that associates can be passionate about if the trickle down is explained and reinforced properly. In today’s world, who would not be passionate about helping to create or retain jobs, improve product and food safety and support a better environmental footprint?

There may even be more than a few folks running for public office at the highest level today that could be significantly more successful with their approach if they could prove that their desire is to do the same, albeit in a much larger footprint. It’s easy to be passionate yourself; it’s much more difficult to ignite that same passion in others. When you do, then you have real value.

If you would like to work with a team that is passionate about procurement to help your team find their passion, please contact a SafeSourcing customer services representative or ask us for an executive reference. You won’t be sorry that you did.

We look forward to and appreciate your comments.

Say thanks to all active military or veterans you see today. Or any day

Monday, May 26th, 2014

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Happy Memorial Day!

 

 

How should companies determine todays true value? Part II of III.

Friday, May 23rd, 2014

I heard  a young worker say the other day that new hires did meaningless work and needed to be prepared for that when the started a new job.

Today’s post is by Ron Southard founder and CEO of SafeSourcing.

This totally freaked me out as a business owner who constantly strives to point out the value of what we do, as well as the value we create relative to job growth internally and externally. Certainly one can measure value in terms of customer savings, Return on investment, capital etc. One can also create value through quality improvement of both services and products sourced beyond what is being sourced today. Value can be measured in process improvement internally and externally that might add to a company’s profit or help in retaining jobs. There is a measureable trickle down effect of doing meaningful work; it is something you can be passionate about if you truly are trying to be a better corporate and global citizen. Are there scorecards that measure this? Unfortunately, probably not all of it in one place, but having conversations with your employees/associates relative to their understanding of what your company’s mission is and why it is important is more than just a reason for another meeting that they probably don’t want to attend in the first place.

Personally, I believe that people want to be perceived as valuable by anyone and everyone that they meet whether in their personal life or their professional life. As leaders, we should be in the job of creating excitement about what we do. We may in fact have associates that started out wanting to be a doctor, lawyer, professional athlete or some other profession as many of us did. Today at our company, they work in procurement. Left to their own devices they may feel as though they have not or can not accomplish the success they dreamed about in their youth. Whose job is it to stop that thinking in its tracks and promote an environment of excitement and passion? The answer is that leadership starts at the top. If our leaders are not passionate and regularly reinforcing the work of their company, how do you expect your associates to be passionate. After all, who wants to just go to work and do meaningless stuff?

Check back for Part III of this post on Tuesday May 27th  to learn why our customers and associates are passionate about SafeSourcing.

In the meantime if you would like to work with a team that is passionate about procurement to help your team find their passion, please contact a SafeSourcing customer services representative or ask us for an executive reference. You won’t be sorry that you did.

We look forward to and appreciate your comments.

How should companies determine todays true value? Part I of III.

Thursday, May 22nd, 2014

For those of you that are not informed I am referring to Jack Welch the former CEO of G.E.

Today’s post is by Ron Southard founder and CEO of SafeSourcing.

The first question one might ask of you is; are you talking about ethics or mathematics? This is certainly a fair question even when we apply it to business. The mathematics are certainly what the CFO or finance department are looking for  in a pure value equation of I am buying this product or service from you for the following amount with a return on my investment over this period of time. That’s simple math. Most can understand it. The ethical side of the company which is or should be within the domain of the CEO’s office and where strategy should be developed also adds in the esoteric or ethical value. Most of the time this is defined in the company’s Corporate Social Responsibility initiatives or CSR in terms of value to the community or communities your company serves, value to the environment or value to safety in a variety of areas. Some companies try to measure both areas and report them in the form of Triple Bottom Line results or TPL. This area is a little more difficult to understand as the audience that understands the particular area of measurement or expertise can be much smaller.

For the purposes of this two part post, we will focus on the 2nd area of determining ones value within the framework of your job where if we are not careful, the perception of a few can become the reality of many.

I heard a young worker say the other day that new hires did meaningless work and needed to be prepared for that when they started a new job.

Check back for Part II tomorrow to learn why this totally freaked me out.

In the meantime, if you would like to work with a team that is passionate about procurement and the entire procure to pay process to help your team find their passion, please contact a SafeSourcing customer services representative or ask us for an executive reference.

We look forward to and appreciate your comments

The success of E-procurement solutions requires officer level sponsorship and support!

Wednesday, May 21st, 2014

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

The role of e- procurement solutions continues to become more strategic each year. Driving cost out of goods and services is one of the most important above the line initiatives any company can undertake. But make sure you don’t forget the expense or indirect spend area.

In order to successfully implement an enterprise wide e-procurement initiative, executive management must provide sponsorship and visibly promote these projects within their organizations. Executive sponsorship is required by the Chief Executive Officer, Chief Financial Officer, Chief Procurement Officer or Chief Logistics Officer. The potential impact to earnings regardless of Industry is so significant with a properly deployed e-procurement program that officer level executives require visibility based on the potential impact to stockholders and stakeholders alike. In fact Sarbanes-Oxley section 404 requires the following of companies:

1. Demonstrate reasonable & consistent governance & compliance monitoring.
2. Assure proper use of tools that have been placed into practice.
3. Employ proper reporting & management oversight.

Implementing e-procurement solutions has the potential to offer significant earnings changes. 

Once executive management has sponsored these initiatives, some form of accountability must be implemented to ensure maximum participation in order fully realize organization wide savings opportunities. Scorecards may be a good way to begin. Scorecards report on KPI’s that indicate a teams or a company’s effectiveness. Examples might be awarded savings vs. low quote savings by team and by individual. This could lead to understanding lost savings opportunities or relationship management issues that provide risk. 

A company’s successful transition to e-procurement requires a transition from a cumbersome paper RFX processes to one that focuses on using the speed and efficiency of an electronic forum.  Successful change management professionals focused on sustainability realize that this shift must be a combination of the use of not only the latest software advances, but also reengineering of internal processes in order to drive sustainable results.

If you’d like to learn more about how SafeSourcing can help you improve your financial results, please contact a SafeSourcing customer services representative.

We look forward to and appreciate your comments

Avoiding the fallacy of the single cause.

Tuesday, May 20th, 2014

Today’s post is by Mike Figueroa, Account Manager at SafeSourcing:

Procurement projects will of course come in all shapes, sizes, and levels of complexity. Rarely is any single facet of a project determined by only “top-down” variables. Any one part is more likely influenced by a three dimensional layout of different variables, all of which can determine the outcome of the greater whole. But how can all of these intricacies be accounted for, without complicating the project so greatly that it becomes unmanageable? Here are three tips for managing complexity:

   1.  Honestly identify complexity: Don’t close your eye’s to the reality of the project and pretend that it’s simpler than it really is. Admitting that  your value chain is non-linear is not conceding defeat, it’s setting you up for identifying your criteria for success (Be similarly honest with identifying your constraints/bottlenecks).
   2.  Consolidate complexity early (accelerated vs delayed differentiation): In supply chains that start with homogenous parts, differentiation should come late in the chain, but the opposite is true for outputs that begin with high complexity. If you consolidate complexity by identifying requirements, scope, and expectations of variables that lead to the single end product, it will keep you from having to break out the constituent parts.
   3.  Leverage the entire value proposition: Build into your project the ability to negotiate details based on the full value of the project. For example, make it clear that if a vendor wants to find loopholes that diminish the value of their original quote, that you will be awarding the vendor with the best overall value proposition, not the one who presents a polished picture and adds all manner of hidden fees. 

For more information on how SafeSourcing can assist your team with your procurement projects 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.

How Hydrogen Peroxide Manufacturers use Indexes to adjust their products price.

Tuesday, May 20th, 2014

Today’s Blog is by Ryan Melowic Vice President of Customer Services at SafeSourcing.

For manufacturers who use industrial grade Hydrogen Peroxide in their production process, it is important that they have a thorough understanding of what indexes can affect its price.  In this category some manufacturers use a shared risk – shared reward model that follows the variations in both Natural Gas and Diesel fuel pricing.

Some manufacturers are using the Nymex Henry Hub Natural Gas Index.  They figure surcharges by calculating an average monthly settlement price and then compare it against a set base line.  If the Nymex average price is greater than the baseline, they will subtract the current monthly average settlement price from the baseline and then multiply it by a fixed number that is dictated by thresholds based off of the average monthly settlement price.  With a fifty cent change in the Nymex Henry Hub Natural Gas Index price it isn’t uncommon to see a 2% increase on the cost of Hydrogen Peroxide.

In addition, a fuel surcharge that changes on a monthly basis is used by some hydrogen peroxide manufacturers.  They define additional surcharges for pricing thresholds and compare it to the current cost of diesel on websites like the Department of Energy.  From there, they set surcharges for delivery based on the price of diesel.  Pricing for diesel in the mid four dollar range can add around 2% to hydrogen peroxide costs.

With ranges in costs hinged on indexes, Hydrogen Peroxide prices can change 4 to 10 percent depending on the current market.  This makes it difficult for manufacturers to hold their pricing for the finished product.  However, most manufacturers are expected to lock the pricing of their finished goods for at least a year.  How is this fair for the manufacturers of the finished goods?

For further information how SafeSourcing can help your company lock in competitive hydrogen peroxide pricing for a longer duration than monthly, please contact a SafeSourcing Customer Service Representative.

We look forward to and appreciate your comments.