Archive for December, 2014

Tools Your Team Needs

Thursday, December 18th, 2014

 

Today’s post is by Troy Lowe, Director of Development at SafeSourcing.

I recently bought a used house that needed a little TLC.  Most of the work is just cosmetic, like painting and hanging fixtures, such as blinds, curtains, and light fixtures.  These are not difficult tasks but can be a little time consuming.  It can be even more time consuming if you are not using the right tool for the job.  I own a really nice cordless drill/driver and have always used one for driving fasteners into various surfaces.  But what I discovered this weekend changed my mind.  A relative of mine was over and saw my frustration when trying to hang a bracket on the wall.  The screw would go in about three quarters of the way and then the Phillips bit would spin and start to strip the screw.  This happened even after drilling a pilot hole first.  She recommended that I use a tool that she recently purchased.  She went home and brought back a cordless impact driver.  I sure am glad that she was there to make such a great suggestion.  This tool worked like a champ!  The difference between the drill and the impact driver is that when the driver feels resistance it starts a hammering action which keeps the bit from slipping and drives the fastener into the surface.  Using the impact driver easily cut the amount time by 30% compared to the other jobs using the cordless drill.  This is definitely a tool I will invest in.

Benefits of an impact driver

•  Cordless
•  Provides higher torque but in rapid bursts
•  Designed to drive screws and fasteners
•  Does not have to be held tightly to provide the torque
•  Small and Light weight
•  Quick Release Chuck

At SafeSourcing, we can gather all the necessary information for your company and help you decide what tools fit your needs.  If you would like more information on how SafeSourcing can help your business, please contact a SafeSourcing Customer Service representative.  We have an entire team ready to assist you today.

We look forward to your comments.

My Love-Hate Relationship With Spreadhseets

Monday, December 15th, 2014

 

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

Through the years the one lesson that should have been burned into my consciousness but somehow still gets missed is to back up your work regularly.  Whether that is a word processing document, spreadsheet or backing up the files on your hardware the practice in the business world should be second nature….and yet….it happens.  Hours of work down the drain that must be started from scratch. 

As much as it drives me insane when it happens, some of the best final output has occurred for me in these situations.  For me this occurs in some way or form because of opportunities, whether new, missed or false, these concepts can apply for our world of procurement when we stop and take a step back from rushing to get prices and deals solidified, racing onto the next project before the one we are on is barely finished.  While it may be uncomfortable for some us, taking a step back to re-evaluate where we are with a category can lead to some of the same good results as having to start that spreadsheet over.

New opportunities – Taking a step back from a current view of category has its advantages.  It provides an opportunity to examine and look at new opportunities in the form of new companies, new technologies and new processes that may not have been there when the work on a category was done during the last contract.  When companies plow ahead trying to close as many projects as they can, these opportunities might get missed and an opportunity to leverage early with it.  If the time can be spared, starting as many projects off with a quick RFI of the industry can help uncover some of these options.

Missed opportunities – Like new opportunities, missed opportunities generally get passed by when companies are trying close projects quickly without taking a step back.  These can be situations where a strong supplier was not asked what they could do to adjust their final offer before a decision was made.  Sometimes this results in missed savings but other times it results in a missed opportunity to leverage something else the vendor may do that is not part of the current project.  If two suppliers are close in price and overall offering but one offers a portfolio or products/services the company can also leverage, this is an opportunity with that vendor to get a better deal with the possibility of getting more business that will benefit the company.

False opportunities – False opportunities arise when companies are too quick to make an award decision without digging to see what that decision with that vendor(s) will mean to the company.  Changeover costs, industry reputation, hidden costs are all part of what can come back to bite a company if the time look at what they thought they wanted is not invested.  Many suppliers will tell you if they have missed a piece of a project that should be included but do not be afraid to ask that of the vendors during a sourcing project.  It may increase the scope and overall cost of the project but at least it will be known and on the table. 

For more information on how SafeSourcing can help you take a step back and really look at these 3 classes of opportunities, 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.

Let the Games Begin – The Sequel – Part II of II

Tuesday, December 9th, 2014

 

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

In yesterday’s blog we covered some of the areas a video game type training program for new procurement professionals would have to include in order to train them in as mainly strategic sourcing scenarios as possible focusing on the analysis of spend, handling complex projects and engaging suppliers.  Today we will take a look at a few more areas that would round a solution like this out.

Awarding the business – It would seem to the novice user that once the pricing has been provided and the details about what is being offered are on the table the award decision would be clear-cut and at the beginning it would be.   As the game progressed the difficulty of knowing how to award would not be as obvious.  Running a temporary labor project for 50 locations across the country where local, regional and national companies all performed well and all three levels are currently servicing the company today in some way.  The project may have had good proposals from the incumbents and some not so good.  It may have produced 3 or 4 new players that the company has never done business with before.  The question becomes “Do I have enough information to make a decision and how much of the business should I award to any particular company?”  In a good video game training tool the answer to these questions would be slightly different with each project depending on the variables.

Tracking the performance – At this point the user has progressed and has mastered the sourcing projects from beginning to end and has awarded suppliers millions of dollars of business.  Any good training program would then take all of those GREAT results and throw them out the door as the new contract pricing fails to be realized due to a glitch the suppliers invoicing system or some other factor.   Being able to creatively develop ways to track realized savings with analyzing every invoice may be another element of this program.  At advanced levels the game may require the user to track the performance location by location instead of across the entire company increasing the difficulty even more.

Controlling the savings – The final piece of the training module for each project in this training program/game would be the ongoing management of the category and contracts.   As the user progresses through the program they may forget about that $100,000 contract they wrote for copy paper that has gone unchecked for 5 years and is now a $250,000 contract without increasing the volume of copy paper the company is getting.  The tool would have a built-in contract manager that would help the user keep track of these details and alert them to upcoming deadlines on old projects right in the middle of trying to work new projects. 

Obviously Sony does not have a game like this for the PlayStation (yet) but until that time there are still practices that can be put in place to help develop new procurement team members.  For more information on how SafeSourcing can help in this area, 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.

Let the Games Begin – The Sequel – Part I of II

Monday, December 8th, 2014

 

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

Last year Paul Teague published a blog about the possibility of developing a video game type of training program to train new procurement professionals more about the industry. So with the 20th anniversary of what is arguably the most popular video game family ever, the Sony PlayStation, we will explore a few of the ways a game like that would need to work in order to be an effective training tool.

Analyzing the spend – The beginning part of any procurement professionals journey with a company and thus the beginning of this game would need to focus on understanding the company spend.  This includes direct as well as indirect expenses as they may apply.  This phase would focus on where different company types spend their money and what types of criteria make one category a better one to focus on than another (Hint: it’s not always about the size of the spend!).  Criteria such as approaching contract deadlines and diversity of a categories incumbent supplier base can also factor into this process.   The key to passing this level is to gain an understanding of how to prioritize the projects for what will surely be an understaffed and over worked procurement team in order to get the best results.

Understanding complex categories – As the game progresses, like any game, it will progress in difficulty the longer you play and this procurement training game would be no different.  Eventually it would get to very complex categories such as fuel, temporary labor, heavy equipment with dozens of options, etc.  With each complex category mission there would be challenges the user must overcome in order to even get the company executives to even pursue it.  Another key would be to understand not only how to execute the project but how to communicate internally what the project goal is so that time invested is not wasted because the right people weren’t engaged.

Engaging the suppliers – One of the aspects that would pop up in the projects a user must complete, but especially for the complex categories, is the management and engagement of suppliers.  There would obviously be several levels to master in this area because managing suppliers with a $100M company is altogether different than managing those same suppliers for a $100B company.  The game would need to help develop the skills to manage both incumbent vendors when there is only one incumbent, when there is more than one incumbent and when a category is brand new and has no incumbent supplier.  This would also be one of the most frustrating areas for users to master because of the dynamic nature of suppliers and how they react to a given scenario and how the user communicates with them as the game/project progresses.

Until a training module gets developed you can contact SafeSourcing for ideas on how to bring new resources up to speed.  For more information on that, our procurement Wiki 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.

Stay tuned for the second part of this blog series tomorrow.

Master Lease Agreements

Tuesday, December 2nd, 2014

 

Today post is by Ryan Melowic, Director of Special Projects at SafeSourcing Inc.

When negotiating a Master Lease Agreement for Fleet Vehicles, it is important to include all the negotiable elements that make up the monthly lease payment.

Master Lease Agreements should include a monetary discount off the MSRP by class of vehicle.  This dollar amount can be applied to any vehicle at the time of lease initiation.   Depending on the number of vehicles needed, the manufacturer or the dealer will offer a MSRP discount. 

Inception fees, such as security deposit, acquisition fee, first month’s payment, taxes, or title fees per vehicle, can be due at lease signing or included in the monthly lease payment.  These fees should be addressed in the Master Lease Agreement. 

The percent of value retained at the end of the lease term can be negotiated.  A percentage of MSRP can be collected and used by vehicle class to determine what part of the value will be paid on during the term of the lease.  These percentages can be static elements within a Master Lease Agreement. 

The Money Factor should be collected by duration of lease term.  This is a variable rate that must be identified in a lease agreement and can be captured in the Master Lease agreement.

Administrative Fees can also be included in a Master Lease Agreement. This fee can be as much as $20 a month.  A fleet with 200 vehicles can equate to almost forty thousand dollars a year of spend for this item alone.  These fees can also be negotiated.

All the items listed above can make up a monthly fleet lease payment.  Therefore, they should be negotiated as well as captured in a Master Lease Agreement.  For more information on Master Lease agreements and making sure you are not overpaying on your fleet leases, please contact a SafeSourcing Customer Service Representative.  We have an entire customer services team waiting to assist you today.

We look forward to and appreciate your comments