Archive for July, 2014

Don’t Run out of of the Back to School Supply’s!

Wednesday, July 30th, 2014

Todays post is by Ronald D. Southard, CEO at SafeSourcing Inc.

Retailers; are your Back to School supplies up to date? Do you have appropriate stock?

A quick reverse auction or RFQ that we call The ABC’s of School Supplies can get you caught up quickly.

It seems like the summer has just begun, but buyers need to be thinking about back to school supplies. The actual supplies required differ from preschool to college aged students and teachers.

Unfortunately if you don’t have what the person (normally mom) shopping for all students is looking for; you may lose all of the affiliated sales and ultimately your customer.

How many times have shoppers come to your store looking for something simple and then leaving without buying anything? It probably happens more often than you think. On the other hand, if you have a well stocked department you might be surprised by the number of additional items customers buy when they find the primary item they were looking for.

Relative to school supplies, you should probably consider the following list of categories if you want to cover all of your consumers needs.
.
A. Academic Calendars & Planners
B. Arts & Crafts Materials
C. Accessories
D. Backpacks
E. Binders
F. Calculators
G. Chalk, Erasers & Cleaners
H. Computer Media
I. Crayons & Markers
J. Dies Punches & Accessories
K. Drafting Supplies
L. Educational Software
M. First Aid & Personal Care and Anti Bacterial Supplies
N. Glue, Tape & Self-Stick Notes
O. Index Cards,
P. Report Covers & Portfolios
Q. Locker Accessories
R. Maps & Globes
S. Paints
T. Paper & Notebooks
U. Pens, Pencils & Markers
V. Reference Books
W. Rulers &  Compasses 
X. Scissors
Y. Staplers
Z. Teaching Aids

Each of the above categories obviously has a number of products associated with it. At times any one of these products could support a reverse auction by itself based on the size of the retailer and the volume associated with the category

The SafeSourcing product specifications library already has specifications on each of these categories and they could all be run within a week. Please contact a SafeSourcing Customer Services Account Manager in order to find out more.

We look forward to and appreciate your comments.

What should Retailers do after they have addressed all of the low hanging fruit with their reverse auctions?

Tuesday, July 29th, 2014

Todays post is by Ronald D. Southard, CEO at Safesourcing Inc.

Retailers ask me all the time where to begin with their reverse auctions. It might surprise you that I tell them not to necessarily place all of their focus on the expense or indirect categories by default. The fact of the matter is that for most retail companies their largest area of expense is their cost of goods. In most cases this is going to be somewhere between 65% to 75% of total revenue depending on the industry vertical. By default the gross margin line is going to be somewhere between 25% and 35%. The expense categories also contains salary and benefits which makes the spend for indirect categories actually smaller than the number represented by a companies gross margin. Historically savings on indirect or expense categories has been larger than those of products for resale. In fact it may only represent a 1/3 of the gross margin line.

As an example let’s take a look at a retailer that does $1B in gross sales and has cost of goods of 70% or $700M. This retailer’s gross margin is 30% or $300M. About $100M of that is available for e-procurement related price compression. Savings promises are really all over the board depending on what e-procurement provider you talk to and how they measure actual savings. Let’s assume you do indeed source the entire $100M in indirect spend and end up saving 15%. If (and it’s a big if) all of the savings make it to the P&L, savings would total $15M. Now let’s take a look at the cost of goods (COGS) line. All of this is available for price compression. Let’s target just 50% of the spend in year one or $350M. If we assume savings here to be only 50% of what we see in the indirect spend area or 7.5%, savings generated would total $26.25M.

With the above very hi level calculations, let’s go back to the original premise of where a company should get started. This authors answer is actually everywhere. You should use these tools in the form of e-procurement to standardize the way you conduct sourcing. Maybe you’ll drive $41.5M in savings from both direct and indirect areas.

If you’d like to understand an easy six step process in order to accomplish these types of results without adding to your staff, please contact a SafeSourcing Customer Services Account Manager.

We look forward to and appreciate your comments.

How to insure the sustainability of e- RFX events for your customers.

Friday, July 25th, 2014

Todays post is by Ronald D. Southard, CEO at SafeSourcing Inc.

If you follow these simple guidelines it will also encourage senior management to consider placing more of the companies spend under the umbrella of e-procurement tools and specifically reverse auction tools.

Once you are armed with a robust detail focused supplier database and related e-procurement tools:

1. Conduct a detailed category discovery
    a. Learn all there is to learn about the customers way of doing business.
    b. Walk, observe and annotate all activity at distribution centers and warehouses.
    c. Walk an array of stores and review all formats of the enterprise.
    d. Compile a list of all corporate categories
2. Rank categories by
    a. Total spend
    b. Importance
    c. Sourcing frequency
    d. Quality objectives
    e. Look for aggregation opportunities
        i. Lighters, lighter fluid, flints, fire sticks.
3. Conduct supplier discovery
    a. Rank suppliers
        i.   Size
        ii.  Experience
        iii. References
        iv. Environmental certifications
        v.  Safety Certifications
4. With all of the above in hand; develop a three year game plan
    a. Identify suppliers for each event over the three years
    b. Develop savings targets by category
    c. Develop a three year time line  for all categories
5. Role Play internally  the first year for a test category
    a. Ask the following questions
        i.   How will you award the business
        ii.  Review alternate scenarios
        iii. Review savings by scenario
        iv. Determine which suppliers will be invited back
         v. Determine what new suppliers from your database search will be invited during the next year or cycle.

I’m sure you can fill in a few more items prior to your launch, but the key is to have a plan and to write it down. Now you do.

If you’d like Safesourcing to conduct a cot neutral 2 day discovery session for your procurement team, please contact a SafeSourcing Customer Services Account Manager.

We  look forward to and appreciate your comments.

So, Just what is a Tradeshow? Are they productive sales tools?

Thursday, July 24th, 2014

Todays post is by Ronald D. Southard, CEO at SafeSourcing Inc.

The honor of attending a retail tradeshow was often reserved for the best sales people or those with the best presentation skills.

According to Wikipedia Trade is the voluntary, often asymmetric, exchange of goods, services, or money. Trade is also called commerce or transaction. A mechanism that allows trade is called a market. The original form of trade was barter, the direct exchange of goods and services. As such, Wikipedia defines A trade fair (trade show or expo) is an exhibition organized so that companies in a specific industry can showcase and demonstrate their latest products, service, study activities of rivals and examine recent market trends and opportunities.

Unfortunately as products have become more complex particularly in the area of non consumables and technology driven products it has become much more difficult for these shows to drive new orders. Leads maybe, orders not so much. This is primarily do to the fact that most decision makers don’t show up at these shows and if they do, may not even visit suppliers booths or be able to get a presentation if they do visit.

These are expensive events for suppliers to attend, so you may not get the exposure you are looking for on the tradeshow floor. Normally you can get a list of attendees on line that will allow you to make sure you are going to be able to spend your time wisely.

If you are a retailer planning to attend a trade show, have your plan in place as to what you want to accomplish in advance.

1. Who will you be having dinner with?
2. What booths will you visit?
3. What is it you want as a take away from your visit
4. Do you have any messages you want to pass on to specific suppliers.
5. What presentations or education sessions will you attend?
6. How will you report what you have learned back to decision makers?

If you don’t care to wait until the next tradeshow to begin saving some serious money, please contact a SafeSourcing Customer Services Account Manager today.

We look forward to and appreciate your comments

Don’t manually file your email anymore.

Wednesday, July 23rd, 2014

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

In my never-ending quest to squeeze more time out of each day, I find myself at odds with colleagues who believe that we MUST manually file away every email that touches our inbox into its own appropriate sub-folder to maximize efficiency. However, when I want to access an old email, I just type in a relevant email address or similar search term and, and within seconds, there it is. Of course my observation is strictly anecdotal, so let’s look at some empirical research.

     ● In a 2011 study by IBM it was said; “People who create complex folders indeed rely on these for retrieval, but these preparatory behaviors are inefficient and do not improve retrieval success. In contrast, both search and threading promote more effective finding” 1.
     ● The IBM study went on to suggest that the reason why people typically manually file their email is because they feel overwhelmed with the volume of messages they receive, and manually filing each message gives them a sense of control.
     ● Microsoft published a “best practices” guide to Outlook that made similar recommendations; “Reduce the number of places where you manually file messages. Reduce the mental tax of filing by relying on search to locate messages”2.  
     ● There are multiple technology reviewers and business consultants that repeat the “do not manually file” mantra from Harvard Business Review 3 , Mindtools , and Productivity Hacks , need I go on?

If you have an extremely slow computer or exchange server, or a shared group email address, or stringent archiving requirements due to legal concerns, etc, dispersing your email into multiple folders can definitely be beneficial. However, most of these process can be automated by setting up “move” rules for incoming mail, and don’t need for you to spend time manually clicking and dragging. There are a lot of reasons to manually file all of your incoming email, but efficiency is not one of them.

For more information on how SafeSourcing can assist your team this process 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.

[1]  Whittaker, Steve et al. “Am I wasting my time organizing email?: a study of email refinding.” Proceedings of the SIGCHI Conference on Human Factors in Computing Systems 7 May. 2011: 3449-3458.

[2] “Best practices for Outlook 2010 – Outlook – Office – Microsoft.” 2011. 11 Jul. 2014 <http://office.microsoft.com/en-us/outlook-help/best-practices-for-outlook-2010-HA102459562.aspx>

[3] “Tip for Getting More Organized: Don’t – Michael Schrage …” 2013. 11 Jul. 2014 <http://blogs.hbr.org/2012/01/tip-for-getting-more-organized/>

[4] Sarah Pavey. “Managing Email Effectively – Mind Tools.” 2011. 11 Jul. 2014 <http://www.mindtools.com/pages/article/managing-email.htm>

[5] “Productivity Hacks: I Empty My Inbox Every Day | LinkedIn.” 2014. 11 Jul. 2014 <http://www.linkedin.com/today/post/article/20140121110513-6126609-productivity-hacks-i-empty-my-inbox-every-day>

Understanding the underlying nature of competitive bidding when using e-negotiation tools.

Monday, July 21st, 2014

Todays post is from your team at SafeSourcing and is a question we get all of the time. Even from customer currently using e-negotiation platforms.

Competitive e-bidding is the process of a host company inviting and obtaining bids via the internet from competing incumbent and other suppliers in response to published specifications, by which an award is made to the best overall bid that meets or exceeds the specifications in areas such as price and quality.
 
The above process contemplates giving potential bidders a reasonable opportunity to bid, and requires that all bidders be placed on an equal playing field.

The purpose of competitive bidding is to stimulate competition, prevent favoritism, and secure the best goods and services at the lowest possible price, for the benefit of the host company.

Ideally each supplier must bid on the same documented specifications, terms, and conditions, but not necessarily for all the items. This can be a key to driving the savings you desire
 
When disassembling spends data companies should look at individual line items, product deciles groupings and potential market baskets that specialty suppliers may be able to provide bids for. This can reduce the opportunity for full service suppliers to manage the overall gross margin of their bids by certain high margin offerings and can resulting in  more competition and price compression.

Competitive bidding cannot occur where specifications, terms, or conditions prevent or unduly restrict competition, favor a particular supplier, or increase the cost of goods or services without providing a corresponding tangible benefit to the host company.

If you would like to look at ways to better analyze your spend data, contact a SafeSourcing customer services representative.

We look forward to and appreciate your comments.

Are you ‘too close’ to your company?

Friday, July 18th, 2014

Today’s post is by Alyson Usserman, an Account Manager at SafeSourcing.

Let’s talk about Bob for a minute. Bob is usually a great employee, he comes in early and leaves late, he even works from home on a regular basis. Bob is usually the first to volunteer when a new project is proposed to his company. He’s invested in the company, and in return, the company has invested in him.
 
Bob sounds like the perfect employee. However, he becomes so invested in his projects that he overlooks errors, and red flags. Sometimes, he overlooks the errors with strategy that could potentially arise and sometimes says, “This is how we always do it!” He yields average results for savings and sometimes does not understand why a procurement event didn’t go according to his “plan.” His strategy is usually the same, and he often neglects to take into account the factors that are associated with that particular industry. He has no idea if the plastic index has risen or fallen, he doesn’t always have a good supplier base, and sometimes, his events lead to subpar savings for his company.

Bob is overly invested, and cannot see the red flags that he is creating for his company. Bob is still a really great employee but maybe he needs some help with a fresh set of eyes and strategy. Maybe Bob needs someone to point him in the right direction depending on the product or industry. Or maybe Bob simply has too many tasks and not enough hours in the day.

If Bob sounds familiar, let SafeSourcing help. We have an entire customer service team that can help with your procurement needs. Please contact a SafeSourcing Customer Services Account Manager.

We look forward to and appreciate your comments.

Dog Days of Summer

Thursday, July 17th, 2014

Today’s blog is by Margaret Stewart, Executive Assistant at SafeSourcing.

So, why is this time of year called that and what exactly does it mean? Since the dog days of summer are fast approaching, now is a good time to look at that phrase and those other “dog” idioms we all know.

Dog Days of Summer. According to several sources, the Romans associated the hot weather with Sirius because it is the brightest star in the constellation, Canis Major, meaning Large Dog. As for the timing of Dog Days in the Northern Hemisphere, it usually occurs from mid-July through August.

Can’t Teach an Old Dog New Tricks. For any Mythbusters fans out there, you probably already know that this is false. You can, in fact, teach an old dog new tricks. The same idea can be applied to people and businesses too. For example, the old dog could be your company and the new trick could mean new technology. New tricks help keep businesses going strong throughout the years.

It’s a Dog Eat Dog World. This saying refers to how competitive the world can be, ruthless and without constraint.  This phrase can easily apply to business as well, more specifically how competitive an industry can be. When it’s a matter of eat or be eaten, learning a few new tricks could come in handy.

Every Dog has its Day. This means that everyone gets a chance, eventually. It is meant to motivate, especially if times are trying. This is especially true in business. If things aren’t going as planned, opportunities will arise, perhaps today.

Dog and Pony Show. This colloquialism refers to something highly promoted, hyped up, or overly-staged performance meant to sway the audience opinion, like in commercials or politics. This saying should regularly be kept in mind when referring to business. Recognizing a dog and pony show for what it is can help a business stay cautious of possibly poor or traumatic decisions.

It’s a Dog’s Life. This saying means that one’s life is hard, poverty-stricken, and poor. The saying shows its age because when first appearing in the 16th century, dogs did not have the life they often have now. For many of our K-9 companions, life is anything but hard. It may even be pampered as the pet care industry flourishes. In 2007, New York real estate tycoon Leona Helmsley infamously left a fortune to her pet Maltese. This has led to a new definition of “a dog’s life,” meaning to have a carefree, pampered lifestyle. You really can teach an old dog new tricks.

If you would like more information on how SafeSourcing can help your business learn new tricks or on our “Risk Free” trial program, please contact a SafeSourcing Customer Service representative. We have an entire team ready to assist you today.

We look forward to your comments.

There are challenges to every group and the development of the group is imperative to its success.

Wednesday, July 16th, 2014

Today’s post is by Shelly Hayre; Project Manager at SafeSourcing.

Bennis and Shepard’s group development model (Bennis, W. G. (1956). A Theory of Group Development. Human Relations, 9(4), 415-437). explains two phases that a group will experience, with each phase has three sub-phases. The first phase groups experience is dependence. In this phase groups experience dependence, counter-dependence, and resolution actions. The second phase is interdependence. In this phase groups experience enchantment, disenchantment, and consensual validation.

Phase One Dependence

Sub-phase One – Dependence

This sub-phase is the start to a high performing group. This sub-phase is when team members spend time sharing information about themselves. The group is searching for a common goal to share within the group. They want to get to know each other, but also feel a lack of direction. The group is in need of the facilitator for direction.

Sub-phase Two- Counter-Dependence

During this phase groups begin to get hostile toward the structure of the group and facilitator. Members of the group begin to openly question the competence of their leader and openly express dissatisfaction.  The leader is not addressing the group’s needs and begins to express these concerns openly. The group will also try and impose structure within their group. They will work towards electing roles and forming an agenda.

Sub-phase Three- Resolution- Catharsis

Resolution is the final sub-phase of phase one, dependency. The leader starts to step down to allow the group to function on its own by assigning roles and responsibilities to members. Groups begin to discuss member’s roles and responsibilities. The attention and alertness of the group heightens and more time and attention is focused on “becoming a group”. The group begins to find its place in the setting and confidence is built within the group.

Phase Two Interdependence

Sub-phase Four- Enchantment- Flight

Enchantment, sub-phase four, begins the second phase, Interdependence. This sub-phase is when everyone becomes happy, cheerful, and friendly with each other. Issues and disagreements are ignored due to the level of happiness around the group. This sub-phase is when the group starts to plan parties, outings, and events to spend quality time with everyone. There is a level of comfort and bonding going on during this sub-phase. This level of “happiness” is short lived though. The breakdown of this sub-phase will lead into sub-phase five.

Sub-phase Five- Disenchantment- Fight

This sub-phase is when some separation in the group occurs. The group divides and begins to form subgroups. The team members will go out of their way to form subgroups within their group.

Sub-phase Six- Consensual Validation

The final phase of Bennis and Shephard’s Theory of Group Development is sub-phase six.  This phase forces group to examine themselves and members demonstrate self-awareness of their own involvement. Members begin to have meaningful discussion and effective problem-solving. The subgroups that may have been developed in sub-phase five fuses together to accomplish the task.

Knowing the phases a group will encounter may make the ride smoother. It can be very stressful at times. Regardless of the phases, you still have a common goal and the results delivered from your group will be the only important piece in the end. Did your group go through each phase or are you currently experience one of these phases?

At SafeSourcing, we can help your group with its common goal. We may not be able to help with sub-phase five, but we can certainly keep your team focused throughout each phase.

We look forward to and appreciate your comments.

Ref. (Bennis, W. G. (1956). A Theory of Group Development. Human Relations, 9(4), 415-437).

Developing a Starting Point – Part 2 of 2

Tuesday, July 15th, 2014

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

Yesterday we discussed some of the template documents your procurement team and/or 3rd party strategic sourcing partner should be developing in order for your projects and those of other departments can go more smoothly.  Template supplier research, communication and Requests for Information/Proposal were the first items and today we will finish off three other areas that can benefit from having templates established in advance.

Terms & Conditions  – Terms and conditions are the one document that many procurement departments have spent a lot of time on and yet we still see that those documents have not been shared well with the rest of the organization and also that instead of developing 3 or 4 templates to fit projects for very different categories that a “one-size-fits-all” approach has been taken leaving subject matter experts to spend more time removing what doesn’t apply than if they had started from scratch.  Terms & conditions should have background about the company and established rules and guidelines for how a sourcing project is expected to flow from the timeline through payment terms to communication to where the responses should be submitted.  Having a separate document that details the slight differences some categories will need (index price reviews, samples, testing, reporting, etc.) should also be developed to help guide other departments in designing initial documents that protect the company.

Specifications – Specifications are going to different from project to project.  Sometimes they will be on file somewhere, sometimes they will be a cut sheet in a filing cabinet and sometimes they won’t exist internally at all.  It is difficult to come up with a “standard” for product and service specifications and many times your 3rd party strategic sourcing provider will have a good library any way.  What is important at this stage is to create templates that help business owners ask the questions of their suppliers, gather details and detail out what will be needed in order to source the category.  These types of documents can be standardized and like other sets of documents, should be broken out into at least 3 or 4 category types so the information gathered can be focused on that category.

Template Reporting – Standardizing reporting packages can be extremely beneficial to any procurement department because it can shape how a project is shaped before any details are gathered.   Knowing the information needed to make an award decision at the end will dictate how the project is structured to ensure that information is gathered and can be analyzed in true “apples to apples” format.  Many times the contract stage of procurement is very similar and the data needed for contracts and to make award decisions is also very similar.  Developing this in advance is a big key to strong sourcing projects.

For more information on how SafeSourcing can help your team develop your library of template documents 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.