Archive for July, 2015

Avoiding common RFP mistakes

Thursday, July 30th, 2015

 

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

I sometimes hear stories from suppliers that are downright outrageous; I’ve literally been told “the dog ate my RFP”, and “I didn’t read any of the documentation” on multi-million dollar projects by executive level professionals. I’ve worked with a supplier on multiple year projects who has been late on each one, and always because his “mother just passed away”. If you’ve worked with me before you know I can sometimes be a little bit pushy to make sure you understand the structure of the RFP at hand, but I assure you it’s only to make sure the process goes smoothly for you. But what causes people to overlook the details of a project? I would suggest that the root of the problem is something every human being is susceptible to: Assuming we already know everything we need to know.

When going into a new RFP or other procurement project, the first assumption should be that we don’t know the needs of the customer until we’ve taken the time to learn them. I’ve seen suppliers come into a project trying to force their agenda, or assume the details of an RFP rather than observing, learning, and understanding first and asking questions second. It will always be difficult to come to a mutually beneficial business partnership if you don’t even understand the initial request that is being made. A successful RFP provides some basic information and asks questions, allowing the supplier to respond explaining their position, including product/service details, quotes, constraints, etc. Not actively listening and learning causes us to talk past each other, and can cause a misalignment of value propositions.

Listening well is a skill so commonly lacking that it is one of the first things taught in relationship counseling, and shouldn’t be overlooked in our professional lives. Active listening is taught formally in the classroom or counseling session by having one person take turns speaking to another, with the listener repeating in his/her words what was heard. This is effective because it prevents us from falling into the destructive habit of thinking about what we want to say while we should be listening to what is being said. Research suggests we only have the mental bandwidth to process a maximum of 1.6 conversations at a time, and if you’re fully listening to your own thoughts about what you want to say, you’re only hearing 60% of what you should be observing1.

[1] “Too Much Noise – Steelcase.” 2015. 15 Jul. 2015 <http://www.steelcase.com/insights/articles/much-noise/>

We make every effort at our company to make sure you are aware of the details of any procurement project, and also encourage feedback during the process to ensure each project is a positive opportunity, allowing you to put your best foot forward.

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

The How and Why of Supporting STEM!

Tuesday, July 28th, 2015

 

Today’s post is the SafeSourcing Archives.

Companies have begun to put an emphasis on services suppliers offer as well as the commitment they are making to the environment and to the communities around them when making procurement decisions on top considering price.   One of the growing areas of focus for many companies is STEM (Science, Technology, Engineering and Math) education at the junior and senior high school levels as well the college level.  As the workforce begins to show distressing signs of a shortage of skilled workers in the years to come, companies that make the commitment to the youth now can reap huge dividends later and can contribute to a stronger and more qualified workforce here in the United States.

This type of emphasis by suppliers shows that they want to make a commitment to partner with their local communities in a way that can make them valuable partners down the road.  This emphasis should also be a priority for their customers in much the same way “green” initiatives have become so important.   Today we will look at a few ways companies and organizations are working hard to strengthen our youth STEM education.

Make it fun – One of the challenges presented to companies like utility companies that need a level of skill to employ is that the STEM areas of study are perceived as hard or too difficult for today’s generations of children to pursue.  Companies like Pacific Gas & Electric, Gulf Power Company and Ameren have invested millions of dollars in attempts at the K-12 level to develop programs to make these areas of study “fun.”  With the perception changed and interest piqued, children can begin to grow comfortable with STEM studies to the point where they get excited and hungry to learn more.  The ability to generate this change is the key to the programs of training that will lie ahead.

Connect the PartiesSTEMConnector™was created in 2011 to provide a link for those wanting to get involved with improved STEM education with those providers of education with students eager to learn skills that will help them and their future companies to create jobs. Providing this bridge allows companies that need highly skilled workers to begin to educate new generations of students with skills that they will need in the next few years.  These students will fill holes left by a large retiring workforce, and companies can create strong skills and habits before the future employees even come to work.

Volunteer the time – While some companies do not have a corporate mission to support STEM education there are plenty of ways for employees to still contribute to the growing movement of education.  Many universities and non-profit organizations such as A World In Motion, provide ways to volunteer time in a program to help educate youth in ways that make the application of STEM studies real and provide mentors that give students models of who they want to become.  The commitments

are short term and generally require 1-2 hours per week, preparing youth to become the skilled workforce of your company tomorrow.

At SafeSourcing we know companies are looking for ways to give back to their communities and in finding partners who do the same and are positioning themselves in a place to help build the workforce of tomorrow.  For more information on how we can help connect you with companies like this 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.

Politics and Procurement

Friday, July 24th, 2015

 

Next year will be another presidential election and campaigns are already revving up their advertising efforts, but what does this have to do with procurement?

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

You have probably already seen presidential forerunners in the news lately, and if you are lucky enough not to, you likely will see them soon. The ads often demonize opponents while glorifying their own candidate, just as the next ad shows the opposite. Even if we ignore all the advertisements and rely on our own research and opinions, how does one know if any of the candidates will actually fulfill their promises?

This is where procurement comes in – your business is faced with suppliers and vendors from all over the place, similar to our government elections. One will say their business is best and competitors pale in comparison, just as the competitor states the opposite.  This is when research and your own values come into play.

SafeSourcing can help your business do the research and find the right fit for your organization based on the values you prefer. Whether you prefer local vendors or national chains, SafeSourcing can help you decide what would work best for price, value, and goal.

But, again, how do you know that SafeSourcing and the suppliers will do what we promise? First, SafeSourcing can help you with your vendor contracts so that everything promised is fulfilled. Second, SafeSourcing offers a risk free trial of our services so you can see what we can do for your company. We know we can help your organizations and believe that once you try us, you will see how much we can save you and how much help we can be.

For more information on how SafeSourcing can help with finding the right supplier candidate for you, or on our “Risk Free” trial program, please contact a SafeSourcing Customer Service representative

. We have an entire team ready to assist you today.

 

Organic Egg Production

Thursday, July 23rd, 2015

 

Today’s blog has been written by Ryan Melowic Senior Director of Procurement Process Improvement at SafeSourcing.

According to Wikipedia, “Organic egg production is the production of eggs through organic means. In this process, the poultry are fed organic feed. According to the United States Department of Agriculture, organic means that the laying hens must have access to the outdoors and cannot be raised in cages. [1] Organic egg producers cannot use antibiotics except during an infectious outbreak. Only natural molting can occur within the flock; forced molting is not allowed. Organic certification also requires maintenance of basic animal welfare standards.”

Organic Eggs are one of the many options for eggs on the market today. Back in the day when my parents shopped for eggs they only had one or maybe two options: white or brown eggs. Now there are multiple choices such as enriched with omega 3, cage-free and fertile eggs. Each egg type has a different price point. In addition, when you add the effect that the Bird Flu outbreaks had on America’s chicken flock, prices have sky rocketed.

SafeSourcing does the due diligence to ensure its supplier database is packed full of quality suppliers.  Organic Egg Production is an example of one of the many requirements that SafeSourcing tracks.  For more information on how SafeSourcing can help you with insuring certified suppliers, please contact a SafeSourcing Customer Service representative.

We look forward to and appreciate your comments.

Water World

Wednesday, July 22nd, 2015

 

Today’s post is by Troy Lowe; Vice President of Development at SafeSourcing.

If your kitchen sink is like many others, it takes a while to get your water up to the correct temperature.  Running the water and waiting can waste gallons of water.  The reason for this delay is usually the distance between the kitchen and the location of the water heater.  When you turn on the water, the water in the pipes needs to be emptied so that the hot water can be released.  Because of this, there are products that you can purchase that can be installed under the sink and plugged into a standard outlet.  These tankless water heaters heat the water as you are using it so there is no waiting for the hot water, which results in savings for you.  Most of the units come with two connections; one for the hot water to the sink and the other for a connection to the dishwasher.  Using the temperature dial, you can set the water to the desired temperature.  Installing one of these systems will help you save time, water and money.

There are many units to choose from so if you need help researching contact SafeSourcing for help.  At SafeSourcing, we can gather all the necessary information for you and help you decide which product meets your needs.  If you would like more information on how SafeSourcing can help you, please contact a SafeSourcing Customer Service representative. We have an entire team ready to assist you today.

We look forward to your comments.

Scope of Work

Tuesday, July 21st, 2015

 

Today’s post is by Tyler Walther; Account Manager at SafeSourcing.

When a business issues a request for proposal or request for quote, it will include specific information relating to that project. This information must provide adequate details for respondents to determine if the RFP or RFQ is applicable to their business structure and if so, how to respond. A comprehensive scope of work delivers that pertinent information.

The scope of work details the services the selected vendor will provide on the specific project and the work that will be performed, frequently under contractual obligation. The scope of work lists performance requirements, normally references specifications, and will include a list of deliverables. The scope of work describes how the required work will be completed, with specific tasks listed with their deadlines. The task descriptions may also include methods desired for completing given tasks.

When entering into a purchasing agreement, many times the first document may not be the purchase agreement itself, it will likely be a purchase specification or scope of work that will use an existing agreement. It is possible to have a rock solid purchase agreement but still have difficulties if your purchase specification, statement of work or scope of work is not suitably written.  In the event of a dispute between the parties, these documents endure the same examination as the purchase agreement’s terms.

An accurate scope of work acts as a roadmap for your project, keeping it focused and on track. From a purchasing perspective, it is critical as it details what is being purchased, quantities, item specifications, amongst other critical purchase requirements.

We enjoy bringing this blog to you every week and hope you find value in it. 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.

 

Freight Tendering 101

Monday, July 20th, 2015

 

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

This author has been in and around the freight business for years. Actually for 40 years. Just like the unrelated movie, I have seen it all. Planes, trains and automobiles (trucks really) to be sure but also ocean bound freight. The ships and planes get bigger, but at the end of the day the same issue exists. How do companies get their products to where they need to be efficiently and at a cost that is acceptable in order to satisfy customer demand?

This is not necessarily about your internal optimization models; it is more about the data that feeds your internal optimization models. That is of course if you even have one. The basis for collecting that information is not all of the math calculations and pivot tables; it really is the following types of data.

• Lane data in distance for your delivery model such as Plant to DC.
• Volume discount data from carriers
• Lane rate per mile
• Fuel Surcharge rate
• Human resources rates for loading and unloading (Lumpers in the US)
• 3PL storage rates
• Load balancing charges for LTL versus FL

There may be other data that is required for your individual model, but the above will cover most of what you need to come up with a well rounded format that freight companies can easily bid on.

Relative to who should be bidding; this authors recommendation conducting a three step process that includes a detailed RFI, followed by a detailed RFP and then ultimately the RFQ data compression piece or a reverse auction.

• RFI  – Incumbent and other participants selected from a quality sourcing  database
• RFP – Participants include a reduced number from the RFI process
• RFQ – Includes all RFP participants unless otherwise indicated by the host.

The terms and conditions of the reverse auction or RFQ can cover the balance of information needed by providers that relates to quality, certifications, payment terms, safety, insurance etc.

If you want to get control of your freight costs, please contact a SafeSourcing customer services representative.

We look forward to and appreciate your comments.

The Importance of Supplier Communities!

Friday, July 17th, 2015

 

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

Suppliers offer a great value to sourcing events. Typically you can use the suppliers’ knowledge on their industry. Without having a knowledgeable supplier base, your sourcing events will not be successful.

By leveraging a Request for Proposal, a company can ask the vendors the best plan for their needs, thereby receiving a broad range of solutions to the problem. Much like technology, the supplier communities are constantly evolving, and typically if you run an RFQ in 2012, there will be major industry changes by 2015.

When you leverage the supplier community, you can find the best way to run an RFQ to match the industry. When you match the quoting process to the industry standard, you will receive apples to apples quotes.

SafeSourcing can help leverage the supplier community within any industry. 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.

 

Is Buying Name Brand Always the Best Choice?

Thursday, July 16th, 2015

 

Today’s post is by Gayl M. Southard, Administrative Consultant for SafeSourcing.

Whether single, married, large or small family, trying to save money is a good feeling.  It may be tempting to buy generic to save money, but it is not always the right choice.

Here are five examples of name-brand products versus generic that might prove generic to be a good choice.

1.  Cereal is one example of trying to save money.  For every name-brand cereal, there generally is a generic version.  Often time the generic brand will also have a similar name.  The Kellogg’s Corn Flakes brand cereal will cost roughly $2.98, while an 18-ounce generic brand will cost $1.98.  That’s a big savings.  There is not too much difference in taste.

2.  Spices and seasonings are another way to save some money.  A name brand bottle of basil costs $2.96 while a generic alternative costs $2.24.  That 72 cent savings can add up!

3.  Parents want the best for their babies.  Maybe spending extra on the brand-named baby food and other baby products may be worth it.  Diapers can prove to be a big savings.   Buying generic versus a name brand you can save 10 cents per diaper.

4.  Medication is also an example where savings can be realized.  Take aspirin and ibuprofen as an example.  At a drug store 100 (200 mg) tablets cost $9.99 versus a store brand of 100 tablets for $7.29.

5.  Gasoline is another example.  Commuting to work can be very costly.  It can also be an area where buying generic might be a good choice for you.  Filling up at a major gasoline company versus the Costco brand can yield significant savings.  In California where you might pay $4.79/gallon for regular gas, the Costco brand is approximately $2.85/gallon.  For 15 gallons of gas, you could save approximately $29 each time you have to fill your tank.  That’s a huge savings!

It’s all personal preference on how you choose to spend your dollars.  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.

Cotton and the Commodity Market: How to Deal with Market Volatility

Wednesday, July 15th, 2015

 

Todays post is a timely repost from our SafeSourcing archive.

Variable costs can reap havoc on any company budget, they are more difficult to forecast and prepare for than fixed costs.  Throw in large increases followed by unexpected decreases in any given year, and forecasting becomes almost impossible.  As commodity prices continue to fill the market with extreme volatility—cotton being the current culprit—manufacturers, suppliers and procurement professionals are struggling to remain competitive.

Is there any relief in sight for the drastic shifts in commodity prices?  Cotton, after having a record high price early in the year, now is experiencing a strong drop in price, nearly a fifty percent decrease from the spring.  After already imposing a price increase, manufacturers and suppliers are faced with decisions on how to most effectively reflect the price shifts—again.

How can you protect yourself from the risk in the commodity market?  Planning is a crucial step.  With the uncertainty in not only the commodity market, but the financial market as well, the best defense is to develop a strategic plan for potential macroeconomic risks that could affect your company.

Possessing a detailed forecast of the global economy in any given time horizon will not only keep you relevant, it will allow you to have steps in place to overcome any potential unforeseen events.  Along with a strategic plan, implementing escalator and de-escalator language into contracts for those products most affected by commodity risk will ensure that you are more protected from drastic market shifts.  Unexplained market volatility and unforeseen events have the potential to seriously damage and sometimes destroy a company; take the steps today to implement a strategic plan to shield your company from market uncertainty.

For more information on SafeSourcing and how we can assist with this process, please contact a SafeSourcing Customer Services Project Manager for more information.

We look forward to and appreciate your comments.