Archive for November, 2016

Enjoying the Benefits of eProcurement

Wednesday, November 30th, 2016

 

Today’s post is by Dave Wenig, Regional Sales Manager at SafeSourcing.

First, the good news. You’ve successfully completed an eProcurement event and you have a very significant opportunity to realize the savings generated by that effort.

The question many ask at this point is; now what do I do?

  1.  Review the results in detail: Following a successful eProcurement Request for Quote (RFQ) event, you should take the time to fully review the results of the RFQ. Of course, you’ll want to take a close look at the pricing entered during the process, but there is much more involved. You will also review any notes that the participating suppliers entered to accompany their quotes. Perhaps you’re also interested in understanding how and when suppliers entered their quotes. What was the activity level and what can you learn from the bid activity? As a result of any SafeSourceIt™ RFQ, you’ll have all of this information and more at your fingertips.
  2. Lean on your partner: Often, even after reviewing the results, the best path might still be unclear. For example, perhaps you now have several potential suppliers who could meet your needs and are offering their products at roughly the same price. How do you choose between them? One way to make this decision easier is to confer with your eProcurement partner. While they may not be in the position to make the award decision for you, they might have insight as to what other factors you might take into consideration. Is this a category for which samples are commonly tested? What recommendations does your partner have relative to that sampling process? Did any vendor go above and beyond and offer up additional benefits such as more favorable payment terms or a rebate program? Your partner has experience reviewing the results of an RFQ. Ask their advice.
  3. Keep negotiating: The RFQ is not the end of the negotiations, it’s just another step. At the conclusion of an RFQ, you may deem a supplier to be the best overall value, even if that supplier is not the lowest cost provider. Internal pressures to reduce costs might make awarding to the supplier with the higher cost difficult. In this stage of your review, it may be appropriate to negotiate for further cost alignment with this supplier to achieve a final agreement that is beneficial to both buyer and seller.
  4. Make your decision: Stay with incumbent or try something new? Change is difficult. You may have had a long relationship with your incumbent supplier which had been perceived as a good working relationship. Over time, that supplier may have taken on duties that are outside of the scope of your agreements. Ultimately, as you review the results of your RFQ, this choice will be yours to make. You’ll consider the value of the long term relationship and the value of the known entity against the potential represented by an eager new supplier. Weighing heavily on that decision will be the potential savings. If the new supplier’s cost is 5, 10, or 15% lower than the cost of your incumbent, you’ll have to consider the monetary value you would associate with being able to maintain your current source of supply.

Dave Wenig is a North American Director of Sales at SafeSourcing. Dave or any member of the experienced team at SafeSourcing would be happy to discuss how SafeSourcing can help you attain and quickly realize savings. For more information, please contact SafeSourcing.

We look forward to your comments.

 

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EPA and Business

Monday, November 28th, 2016

 

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

The U.S. Environmental Protection Agency (EPA) was established in December, 1970 in response to growing population concerns over heavy pollution. In the 50 years it has been around, the EPA, through research, monitoring, and enforcement activities, has accomplished numerous things, such as regulating clean drinking water, prohibiting hazardous toxic dumping, removing dangerous carcinogens from food and pesticides, removal of harmful lead from paint and gasoline, implementing recycling programs, and helping to reduce toxic air emissions. On top of that, the EPA helps with environmental cleanups, including natural disasters, oil spills, and brownfields. All of these things help to provide a safer and cleaner environment for people and animals.

With all the good the EPA does for our health, safety, and environment, they also make impacts on our daily lives and businesses. For example, over the last ten years there has been a rise in the number of Energy-Star appliances that use less water and other resources to perform household tasks, like heating, cooling, and washing. This in turn, can save residents hundred or even thousands off of their annual energy bill and help conserve resources.

The EPA has had tremendous impact on agriculture as well. By eliminating harmful pesticides, the food grown by farmers has become safer to eat. By eliminating industrial dumping, streams and rivers have been cleaner and safer to drink, allowing livestock to drink untainted water, thus living longer, healthier, and providing people with better, healthier, toxin-free milk and meat.

Possibly the biggest impact the EPA has made, however, is in the industrial sector, often with less than happy industry owners. For example, a factory has to spend significant amounts of money to prevent heart and lung disease-causing smog to be reduced, to safely contain and dispose of water-based industrial waste instead of dumping into fresh streams, lakes, and rivers, and using safe chemicals in products instead of cheaper, known carcinogens.

To help support environmental regulations, the EPA offers green awards to businesses that make positive change and steps toward healthier, greener business culture. Through education and green policies, the EPA has made huge positive impacts on the country over the past 50 years, helping not only the environment, but also the health and safety of wildlife, livestock, and every single person in this country.

For more information on how SafeSourcing can help your business stay green, or on our Risk Free trial program, please contact a SafeSourcing Customer Service representative. We have an entire team ready to assist you today.

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Update…Do Not Procrastinate!

Wednesday, November 23rd, 2016

 

Today’s post is by Heather A. Powell, Director of Customer Services & Project Manager at SafeSourcing.

Dear Buyer,

This is your 30-day notice that your annual contract is coming up, let’s discuss how we can extend your current contract…

Sincerely,

The Seller

STOP! Do not call the seller! Research, research, research your options! I wrote this blog almost five years ago, and the truth is nothing has changed when it comes to doing your homework and researching what you are purchasing and what is within your contract.

Worse than getting the above notice is the evergreen clause. An evergreen clause is a statement within a contract, that says something to the effect of “this agreement shall automatically renew for another one (1) year term, unless either party provides notice to the other of its intent to terminate this agreement not less than thirty (30) days before the end of the then current term.”

Do not procrastinate to the point you are struggling whether to stick with your current supplier (evergreen a poor contract/poor service) or search for a new supplier. Give yourself time to research your alternatives. If you know a contract is going to expire within 60 or 90 days, start your research NOW! There is no harm in learning as much to know as possible about your product and your company’s annual needs for that product.

Maybe your current supplier does have the best price in town, maybe not…. If you could save 5, 10, 15, even 20% or more on your current product why would you stick with your current supplier, and why not explore your options with a new supplier who can give you better savings, maybe better service, with a better product? Are you lost and not sure which way to look? Are you unsure of where to start or who to talk too? You don’t have enough time to start the process or do the research you know needs to be done? Let SafeSourcing be your guide and source to getting you the answers you need, even if you did procrastinate and have 30 days left. We can do all of this for you and your company from research of the product, to research of the suppliers, to follow through of hosting an RFQ to get your company the best possible savings and value of your product.

Don’t become the King or Queen of Procrastination! For more information about how we can assist with sourcing your needs for your company, please contact a SafeSourcing Customer Service Representative

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Contract Types

Tuesday, November 22nd, 2016

 

Today’s post is by Mike Figueroa, Manager of Customer Services at SafeSourcing

If you don’t like the pricing model of the contract you’re working within but didn’t know you had other options, here is a high-level overview of a few of the standard contract types being used today:

Cost Plus: An agreement wherein the seller agrees to charge based on cost of goods sold, plus whatever profit margin is required to make the project viable. One example is where a highly commoditized good is subject to price regulation or index pricing, and therefore will have their pricing fluctuate based on the market constraints. The only pricing the vendor has control over in this scenario, is their profit margin, which will be the only pricing variable the vendor can agree to discount during negotiations.

Guaranteed Maximum Price: Similar to a Cost Plus contract, a GMP agreement is where the contractor is reimbursed for their actual cost, but also is paid an agreed upon fee. This fee is not to be exceeded unless the scope of the project changes, for which a formal “change order” can be enacted.

Incentive Contracts: This agreement begins as a cost reimbursement model, but varies based on whether or not previously determined goals were met. The incentives can be positive or negative, such that a vendor can be rewarded for underrunning the estimated cost of the project, or penalized for being over-budget. Both scenarios still require timely delivery of finished project. One potential drawback though, is that it can be difficult to monitor quality of work/product meets standards, as this model can also incentivize vendors to cut corners.

Time and Material: This contract type is fairly self-explanatory, in that the basis for pricing is on the number of man-hours used, and any necessary materials to complete the work contracted. Profit is either baked into the hourly rate, or invoiced as an add-on. This contract type is most typically used in situations where it is difficult to forecast the number of hours needed to complete, and must be billed as needed.

Unit Price: In this contract type, the activity or good is grouped into a pre-defined unit. The vendor is then paid a fixed amount for each unit completed. Profit and overhead is typically included in the unit rate, and rate is determined in part by estimated total units contracted.

Lump Sum: A Lump Sum contract is typically enacted when a full scope of work is well defined, enabling the vendor to quote the exact amount required to complete the project. This contract type can be financially risky to a vendor who could later discover hidden costs to perform the project, and can be risky to the timeline of the principle, as the contract would not penalize or reward timeliness as would an Incentive Contract.

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.

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If pricing looks too low, it is for a reason.

Thursday, November 17th, 2016

 

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

I’ve heard this story of a supplier submitting pricing for select items in a commoditized category so far below other quotes that the strategy the team had used to find suppliers was thrown out the window. The supplier was awarded the contract but it soon became apparent that this particular supplier wasn’t at all the right supplier for the job.

As the contract came to fulfillment and the first orders were being received, major inconsistencies were being uncovered. The team discovered that everything was being subcontracted out, even the contract itself. The supplier changed key ingredients of several of the items it had quoted. The supplier had quoted items out of specification tolerance, even altered required pack sizes. It was an unacceptable situation.

The costs of the project skyrocketed which was exactly what was trying to be avoided. My advice is to have policies and procedures in place for price examination. If pricing seems too good to be true, it most likely is. Ask questions.

Let SafeSourcing better manage your sourcing projects. 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.

 

 

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e-Procument is like Couponing

Tuesday, November 15th, 2016

 

Today’s post is by Jericia Stevens, Account Manager at SafeSourcing

Relating my life to e-procurement

e-Procurement is a lot like couponing, in the sense you have to approach it with a different mindset. For example, with couponing you have to leave behind the old way of shopping and open your mind to something new.

The old way of shopping:

  • long grocery lists planned out without considering price
  • weekly menu planning
  • bulk shopping trips to the local wholesale store

The new way of shopping :

  • Meal planning according to sales
  • Shopping at various stores for discounts and savings
  • Buying more while spending less because you stock up on product while it’s on sale

This same concept applies as it relates to procurement versus e-Procurement.

The traditional procurement way involves:

  • procurement was paper- and conversation-based
  • done face-to-face, or via telephone
  • longer turn around approval time

The e-procurement way involves:

  • an online procurement process to cut out steps and save money
  • Simplified software and faster turnaround times
  • Real-time interaction with pre-approved suppliers
  • Orders can be approved online and completed within minutes

We, at SafeSourcing want to you to see the savings and ROI the way couponers get excited about the saving in their pocket. Let SafeSourcing better manage your sourcing projects. 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.

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References

  1. http://thekrazycouponlady.com/beginners/
  2. https://www.bdc.ca/en/articles-tools/operations/purchasing/pages/traditional-vs-e-procurement.aspx

 

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Show your support for our Veterans and create jobs by hiring them.

Thursday, November 10th, 2016

 

Todays post is by Ron Southard CEO at SafeSourcing Inc.

Veterans Day is tomorrow 11/11/2016

Little did I know that what I am doing today would be directly based on my military education of forty years ago?

When I was in Massachusetts on business a few  years ago I visited my home town in eastern Massachusetts, where much of my family including my parents still lived. Recently our home town dedicated a memorial to veterans of the Korean, Vietnam and Gulf Wars. I had no idea this was taking place, until a friend and fellow veteran sent me a picture of the wall with my name inscribed on it.

Our family has a history of military service, many of my uncles served during WWII, and two if my brothers and I also enlisted as soon as we were old enough. I enlisted in the US Air Force in late 1970 while the war in Viet Nam was still being conducted. I ended up with an AFSC of 645X0 or Inventory Management Specialist. I had no way of knowing at the time that my job today in the procurement space would be so closely correlated to the education I received at that time. My younger brothers followed me into service of our country, and subsequently by youngest brothers oldest son enlisted and served and was injured in Iraq. Simply, we love our country as do all of those that served and continue to serve today.

I had the opportunity while I was in town to take my dad who was 83 at the time to visit the memorial. He had no idea that his sons and grandsons names were on the wall. I pointed out the names to him and then we went for a quiet walk in the park and he said to me there are three of us on there. I said, Dad not only are there three of us on there, we will still be on there 100 years from now and it is a legacy that you started. I have to tell you that this is one of the best memories of time with my dad and one I will carry with me forever.

What continues to amaze me is the responsibility that military personnel are given at such a young age. The inventory I was responsible for which included everything from cans of oil to very sophisticated war readiness materials. With that responsibility also came significant accountability. I was accountable to understand or develop product specifications, demand forecasting, requisitioning, logistics and much more. I was 18.

Today’s military personnel and recent veterans are responsible for some of the most sophisticated technology in the world and many are only recent high school graduates. Many are put in harms way and also in the position to make decisions that can impact the lives of others while their high school counterparts are still in college.

Support your veterans that work so hard to protect our freedoms. If you’d like to learn more about how you can help to create jobs for our veterans, please go to http://www.hireveterans.com/. If you can’t, please donate to the Wounded Warrior Project as a way of saying thanks.

Please contact SafeSourcing for all of your procurement needs.

Thanks and Happy Veterans Day.

We look forward to and appreciate your comments.

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Account Manager – Easy Enough Correct

Monday, November 7th, 2016

 

Today’s post is by Steven Belvin,Account Manager at SafeSourcing

An Account manager is a person who is responsible for handling the accounts of a company, right?

Correct. However, there are many more things an Account Manger may handle for a company. According to the Chartered Institute of Procurement & Supply (CIPS) website (www.cips.org) an Account Manager can be defined as “In the hierarchy of sales positions, an account manager is responsible for managing the relationship with a series of accounts. Typical responsibilities include diagnosing business opportunities, planning communications, managing relationships, negotiating agreements, reporting and troubleshooting problems.” (CIPS). As I step into the Procurement world as an Account Manager, I see where this is very true. As Account Manager we are all responsible for understanding a company’s needs and how to get them that fast and efficiently. Also, it is important for us to maintain relationships with different companies and figure out the correct method of getting them both to an agreement that is beneficial to both parties. However, our work is far from over, we also have to maintain the relationship with both companies and extinguish any problems before they become a major issue.

As one can see this seems to be a lot of work, especially for one who is trying to run an efficient business and hiring another employee just to handle this aspect of the company seems to just be a waste of resources. This is where SafeSourcing comes into play. SafeSourcing is a Strategic Sourcing company. What that means is we approach Supply Chain Management in a way that formalizes information to help a particular company gain leverage on its purchasing power. Information like Delivery time of current supplier, Cost Analysis, Quality Assurance, etc. By analyzing this information we find the best values in the market.

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.

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“CIPS – Procurement-glossary.” Charted Institute of Procurement & Supply. N.p., n.d. Web. 20 Oct. 2016.

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Do you have the Right Signage at your Checkout Lane?

Wednesday, November 2nd, 2016

 

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

Many grocery stores are relaxing check-out line limits by adding the word “about” to the check-out line sign. Kroger and Food Lion are two chains that have rolled out signs that now read “about 15 items” in order to bring some peace to the lanes that are intended to be the fastest lines.  There is some logic to this as well.  Supermarkets aim to increase how much customers buy during a shopping visit.  Before a shopper may have been careful to have 15 items or less before they decided to get in the express line.  According to the Food Marketing Institute of Arlington, Virginia, the average sale in a customer transaction is $29.90.  If a customer is limiting the items purchased in the express line to 15 items or less, it means that purchasing that 16th or 17th items is on purpose.  A supermarket’s goal is to sell you more.

The express lanes offer what is called “a perception of control” reports Emily Moscato, assistant professor of food marketing at St. Joseph University in Philadelphia. Customers believe it’s a faster line also limiting the shopper in front of you with the overflowing cart.  There are also changes being made to the self-checkout lane.  SpartanNash, a Michigan-based grocery chain, use to dictate a minimum number of items to use this self-checkout lane.   Now that limit is gone.  Although some grocery stores are relaxing their policy, larger grocery chains such as Safeway, prefer their traditional ways.

There are eight ways to speed through the supermarket checkout:

-Shop weekdays, not weekends.

-Shop during normal work hours.

-Use a manned checkout lane, cashiers are generally faster.

-Pick the line with people with fewer items in their basket.

-Don’t buy items that aren’t labeled with price look-up codes.

-Avoid buying frozen items as the scanner doesn’t read icy codes easily.

-Choose items that are flat with easy to read bar codes.

-Don’t try and guess which lines will be slow.  There is always that person that has a ton of – coupons, pay with a check, or look for exact change.

Whether it’s correct signage, new equipment, SafeSourcing can provide you with all your service needs.  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.

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Zlati Meyer, USA Today, 9/25/16

 

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Are you using Bitcoins in your Sourcing?

Tuesday, November 1st, 2016

 

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

A Bitcoin is an online digital currency that is used to send payments from one to another. Think of Bitcoin as a type of payment such a credit card or Paypal.  The currencies price is very volatile and has had an upward trend since its creation.  It has increased from around $6 in 2012 to over $600 to date.

Bitcoins are created by computers that are connected to the internet. These computers, called miners, work together to process mathematical equations called mining.   Miners use software to complete these equations and are paid with Bitcoins for the processing.  The Bitcoins are rewarded based on computing power so fast computing will equal more Bitcoins rewarded.  The mining software is free to download and there are multiple programs to choose from.

Bitcoins are stored in what is called a Bitcoins wallet. A wallet is like a bank account and without one you cannot send or receive any Bitcoin payments.  There a several types of wallets including software, that can be installed on your computer or mobile device and a web wallet that is hosted online.

Below are some companies that accept Bitcoins:

  • Amazon
  • CVS
  • Dell
  • Home Depot
  • Kmart
  • Microsoft
  • Target
  • WordPress

Interested in learning how SafeSourcing can help your company run more efficiently? Like to try a risk free trial? Please don’t hesitate to contact a SafeSourcing Customer Service Representative. Our team is ready and available to assist you!

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