2018 November : SafeSourcing Blog

Archive for November, 2018

Evaluating eProcurement Solutions – Part 2 of 5: Data Foundation

Friday, November 30th, 2018

Today’s post is our SafeSourcing Blog Archives

We have begun looking at some of features and characteristics that are important when evaluating a new or existing sourcing partner this week beginning yesterday with technology. While not all characteristics we will cover will carry the same weight from company to company, they are all important factors for consideration when selecting a strategic sourcing partner or solution. In today’s segment we will be looking at the data that supplies the backbone for the projects you work on with your sourcing partner.

Global coverage – While there are obvious advantages from working with National, regional and local providers, it is important to be able to look at other global sources of supply. Having the options gives leverage to be able to make decisions as it relates to primary and secondary sources of goods and services. This is especially true for global companies who need to source goods and services local to their international offices. Working with a supplier that has a global supplier database is important to be able to develop a view that looks at all options of origin.

Feeding itself – Data by itself is useful, but data that gets smarter and fresher be leveraging the fruits of its labor is the key to running a better sourcing organization. For most companies the limited view they have of the supplier community goes only as far as their own experience or research. When you work with a third party strategic sourcing partner and/or tool, you are getting the benefit of experience that company has had with those suppliers, products and services. If a supplier has been great to work with, you should be getting the advantage of knowing that from your sourcing partner or tool. Likewise, if a supplier has not done well with delivering after an award of business, access to that information should be available as well. As thousands of sourcing projects complete each year the data you are looking at should be leveraging that information as much as possible.

More than the basics – Along the same lines as “feeding itself” your data should be more than just the basics about who a supplier is, where they are from and how big they are. Strong supplier databases should provide the level of detail on par with a mini-RFI before a project ever begins. This data should include who their biggest competitors are, what new products or releases they have completed in the last 2 years, who they are doing business with and where their core strengths lie. This should also apply to categories and having access to template libraries with starting documents for RFIs, RFPs, and online bidding specifications.

Data is still the key to succeeding in the business world. The more information you can get to help make informed decisions before projects begin, the quicker your projects and results can be put into effect and realized by your financial department. Tomorrow we will take a look at the points to consider from an audit perspective and how your eSourcing solution should be helping to provide you the trail of communication during a sourcing event. For more information on how SafeSourcing can assist you 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.

Posted in E-procurement, E-procurement Solutions, E-procurement Tools

Spend Analysis Part I of II

Thursday, November 29th, 2018

Today’s post is by Alex Borbely, Director of Sales at SafeSourcing

In yesterday’s post we explored what Spend Analysis is and some of the experiences I have had spending time with customers during the review process.

Today we’ll look at the steps involved in Spend Analysis.

Typical Steps of Spend Analysis: Identify all the sources available for your spend data, from all of your departments, plants and business units. This includes accounts payable, general ledger, pCard, eProcurement systems, etc. Gather and consolidate all of your spend data into one central database. This can be difficult if your data is in different formats, different languages and different currencies, however, there are programs available specifically designed to accomplish this however not necessary and a simple Excel workbook may be used.

Cleanse your data. This includes finding and correcting errors in descriptions and transactions, as well as standardizing the spend data for easy viewing. Group, or link, your suppliers for better supplier management. For instance, purchases made from IBM, IBM Corp., or Cognos should all be grouped together, since they’re the same supplier. Categorize your spend. Whether you use specific industry standard classifications or your own company-specific categories, you need to be able to determine where your money is being spent. Office supplies, marketing travel, legal, direct and indirect spend should all be categorized appropriately.

Analyze your spend data. Ensure that you have negotiated the best contract deals per supplier now that all of your spend is identified. Ensure that all of your buyers are purchasing from preferred suppliers. Reduce the number of suppliers per category. Repeat. Performing a spend

analysis once is a great start to identifying savings, however, you need to continually update your data to ensure that contract terms are being adhered to, that buyers are purchasing from preferred suppliers and that savings opportunities are being identified.

Once the Spend Analysis is completed, and reviewed with the client, there are several lessons learned as a result:

Upon completion you now have a baseline for sourcing initiatives
Spend Analysis now becomes an enabler for process improvement
The known data is now a measurement device for cost reduction programs such as SafeSourcing’s Reverse Auction Events
Significant cost-savings opportunities through supplier and commodity consolidation
Enhanced compliance through effective spend and supplier monitoring, which by the way is part of the SafeSourcing full service program
Comprehensive spend visibility across direct and indirect commodities and services

In closing I cannot help but to remember something that was drilled into my head as a young individual by my parents: “It’s not about how much money you make, it’s about how you save it.” This says it perfectly as to why spend analysis is such a vital part of procurement planning.

For more information on how we can help you with your procurement needs or on our Risk Free Pilot program, please contact a SafeSourcing Customer Service representative. We have an entire team ready to assist you today.

Posted in Sourcing Strategy

Spend Analysis Part I of II

Wednesday, November 28th, 2018

Today’s post is by Alex Borbely, Director of Sales at SafeSourcing

While visiting with retailers and manufacturers during the pilot event stage, and watching live events unfolding in front of the client, it is exciting times at SafeSourcing when we show what competition in procurement spend can do. What other solution can a prospect see instant dollar’s fall right to their bottom line in a matter of a 20-minute reverse auction event? SafeSourcing, thus far in 2018, has saved on average 24.5% for our clients. All this falling right to their bottom line. As I said to a new client watching their first reverse auction event this past week, their 22.3% in savings in one reverse auction event goes right to their bottom line. I asked my client, how many new customer cups of coffee would you have to sell in order to see a similar impact on your bottom line? Reality is that selling more in today’s competitive world is difficult without losing margin. Reducing expense on spend with SafeSourcing’s full service events will add to bottom line profitability at a rate of 10X ROI on average. This meaning what you pay for an event in most instances will be multiplied in savings by 10 times or more!

After our typical 2-pilot events are executed and the client witnesses the power of SafeSourcing’s ePROCUREMNT and the reverse auction Event they then ask what’s next? Our typical response is let’s discuss what you spend your money on for both direct and indirect spends. We usually get that deer in the headlights look and hear “well that is handled by many individuals within our organization and we would have to get with them to see if they know how much is spent in each category”. The result is 9 out of 10 responses are that “they don’t know”. This is when SafeSourcing suggests that we engage with the client and together we orchestrate a spend analysis to highlight spend and where SafeSourcing can assist with historical sourcing events results that is the proof of the pudding. Let’s begin by understanding spend analysis:

Definition: Provide top level picture of spend. Spend Analysis is the process of collecting, cleansing, classifying and analyzing expenditure data with the purpose of decreasing procurement costs, improving efficiency, and monitoring controls and compliance. It can also be leveraged in other areas of business such as inventory management, contract management, complex sourcing, supplier management, budgeting, planning, and product development.

At SafeSourcing we use our internal tool and process called SafeSpendAnalysis™

Tomorrow we’ll review the typical steps in a spend analysis during Part II!

Posted in Sourcing Strategy

Evaluating eProcurement Solutions – Part 1 of 5: Technology

Tuesday, November 27th, 2018

Today’s is from our SafeSourcing Blog Archives.

Strategic sourcing companies each have their own unique offering whether that is based on a price model, category focus, supplier database or some other defining trait, but the overall goal is to help their customers source products and services easier, smarter and with an end result that creates more value than the customer could achieve on its own. Over the next five days we will be looking at some of features and characteristics you should be looking at when evaluating a new or existing sourcing partner. Not all of the characteristics will carry the same weight for all companies but each should be an area you examine when evaluating who to partner with.

Browser and Mobile Device-ready – We live in a world where the expectation, not the exception, is that business related tools and solutions will be available in some form to users wherever they are. Whether the solution is a true cloud based Software-as-a-Service model or not, customers expect to have some level of functionality and access to data from their laptops, tablets and smartphones. Part of ensuring this is possible is the amount of development resources that are dedicated to testing new versions of the major web browsers on the market as well as providing a mobile ready interface if not a native iPhone or Android application that can be downloaded and secured.

3rd Party Data integration – Strategic sourcing companies deal with a lot of data much of which they house in their own internal system and make available for analysis and reporting. Many times, however, information will need to then make its way to a Contract Management system, PO system or catalog system that is being used already. In the perfect world, you would select a strategic sourcing partner that had all three of these modules as well as others where the integration was already completed and data flow seamless. Since this is not possible for many companies, the ability for their eProcurement partner to provide data feeds to their existing systems is very important and valuable piece to evaluate when looking at strategic sourcing partners.

Reduced IT involvement – IT departments by and large are one of the busiest departments in most companies. Their projects are scheduled in many cases, months ahead of time so that effective planning can be put together to ensure the project’s success. When this is coupled with the fact that technology is moving so fast and both software and equipment are advancing than most IT departments can keep up, it is understandable that getting a new project on their schedule can be difficult and many projects can stall for as much as a year if they require a high degree of IT involvement. That is one of the reasons why hosted cloud based solutions are gaining more popularity because the involvement from IT is reduced and the capital cost of equipment is reduced as well. IT involvement in the deployment of an eProcurement solution is something that should be considered carefully and balanced against other implementation timelines.

With a world that changes daily from technological perspective, it is important to understand the foundation of the solutions you plan to use to ensure that those tools and the technology they are designed around will continue to provide you with the best in class solutions moving into the future. Tomorrow we will look at the libraries and databases from which your sourcing events will be based on. For more information on how SafeSourcing can assist you 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.

Posted in E-procurement Solutions

Don’t Cut before Measuring

Wednesday, November 21st, 2018

Today’s blog is by Margaret Stewart, Manager of HR and Administration at SafeSourcing.

Don’t cut before measuring. It’s a common phrase and probably one of the first things someone learns when doing any kind of construction – measure before you cut. In fact, many people would recommend measuring a board multiple times before ever making any cuts. While this saying is primarily woodworking, home improvement, or construction specific, the idea can prove useful in multiple industries.

The idea here is that each and every time you are about to execute a project, first make sure you are doing it right. Then make sure again. Sometimes, we can miss important details or overlook glaring errors. For example, while sending an email and forgetting to attach a document is a minor detail, sending an email to a wrong person can be much more serious.

SafeSourcing, however, can help with some things that are often overlooked. For example, when sourcing a product, we analyze the data and the specifications and check them against invoice and industry standards. This ensures that the data is correct and that the savings you see after your procurement project completes is true. We can work with your own procurement, purchasing, or finance department and determine which categories would best be taken out to source. Do you know if you are getting the best price on the goods you already purchase?

For more information on how SafeSourcing can help in your procurement efforts or to help analyze your data, or on our Risk Free trial program, please contact a SafeSourcing Customer Service representative.

We have an entire team ready to assist you today.

Posted in Business Sourcing

Rapid Growth of Foodservice Disposables

Tuesday, November 20th, 2018

Today’s post is written by Ivy Ray, Senior Procurement Specialist at SafeSourcing Inc.

The global foodservice disposables market is experiencing rapid growth, linked to growing online food ordering and home delivery services, according to a report by Persistence Market Research.

North America dominated the global food service disposable industry with 21.4 billion in revenue in 2015. The food service disposable market in North America is anticipated to reach 27.50 billion in 2021. This is largely due to increasing population, expanding commercial markets, and the convenience of single-use service ware. Busy lifestyles and low consumer preference towards cooking at home also acts as a major driver for the foodservice disposables market.

An increasing number of food and coffee joints for hanging out are another predominant factor driving growth of foodservice disposables market. The increased focus on gourmet coffee and specialty cold drinks by restaurants and convenience stores has heightened interest in higher-cost environmentally friendly products. In an effort to mineralize wastage, multiple shops have started offering reusable cups and plates. With foodservice business experiencing impressive growth, the increase of foodservice disposables market has become unstoppable and is not likely to slow down anytime soon.

Plastics are the most widely used raw material for the manufacture of disposable foodservice products. When compared to paper, paperboard, and aluminum, plastic is expected to evolve as the preferred raw material in the foodservice disposables industry. With the recent push for eco-friendly products, manufacturers are emphasizing the use of recyclable plastics. Due to this sustainability trend, several vendors are slowly moving toward the use of compostable and eco-friendly raw materials to manufacture foodservice disposables. Although, governments across various nations are executing various regulations on the use of plastic, popularity of plastic is not likely to come down drastically, as it has widespread acceptance.

Disposable service ware, including single-use cups, dinnerware and utensils, will remain the largest product type through the year 2021 and beyond. However, the fastest demand growth is expected in the disposable packaging segment, which includes foodservice containers, lids and domes, wraps, bags, and trays.

The food packaging industry has become extremely competitive and manufacturing companies are continually improving their products and availability of efficient and sustainable products. Let SafeSourcing source your foodservice products!

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.

References—————————————————

Posted in Business Sourcing

Knowledge is Power

Monday, November 19th, 2018

Today’s post is by Dave Wenig, Vice President of Sales and Services at SafeSourcing.

At SafeSourcing, we host many eProcurement Request for Quote (RFQ) events. In fact, this is a large portion of our services because of the savings that this generates for our customers. If we’ve spoken before, you’ve probably heard me talk about this. Specifically, that while each of SafeSourcing’s customers might source a particular category once a year or once every two years, SafeSourcing is likely sourcing that same category many times a year.

This is where SafeSourcing’s knowledge can become your power. I’ll offer this following example, but just know that this is one of many examples that we could share.

Many of our retail clients sell hot and cold beverages. Of course, these come in a variety of cups with different lids and different straws, but for this example, I’m talking about foam cups. Many of our customers are aware of 1-2 suppliers that offer these cups. We actually have more. That wider supplier base generates real savings in an RFQ scenario. It’s easy to talk about recent savings percentages or to speak generally, but consider this next specific statement.

At SafeSourcing, our retail convenience store customers have saved an average of about $5,000 per store on their foam cups, lids, and straws in the past year while still awarding to their incumbent vendor.

What this statement means is that there is a very strong likelihood that you can save on this category too. If you are a convenience store operator, and you have 50 stores where you use these products, that could be a quarter of a million dollars that you’re overpaying per year. Maybe it’s not the exact case for you, but the data tells me that it’s very likely. Shouldn’t you use SafeSourcing’s knowledge to your benefit?

As I said, this was just one specific example out of many. The only way to really tap into SafeSourcing’s category knowledge is to talk with us.

Ask us a specific question about category savings.
Ask our opinion on the current market conditions for a category.
Ask about the timing of a category due to harvest seasons.

I’ll share one more thing that we know at SafeSourcing; if you aren’t using SafeSourcing for our knowledge and our RFQ services, then you’re overpaying on all your spend.

For more information, please contact SafeSourcing.

Posted in Business Sourcing

Kroger Offers a new way to Shop

Friday, November 16th, 2018

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

I was in my local Kroger the other day and saw a kiosk full of scanners. So, when I got home I decided to go online and see what they were all about. It turns out the scanners are part of their new shopping experience called Scan, Bag, Go. This new way of shopping is available for people that would like to scan and bag the items as they walk throughout the store. Not only can you use the scanners, but you can also download an app to your device and use the device instead. To start, you need to log into the scanner or app with your account and as you shop you just scan the item and place it in your bag or cart. You must scan each item one at a time, and for produce, you bag the items, scan the barcode on the item or the shelf tag, scan a barcode on the closest available scale and follow the directions for weighing the items. As you are shopping, you can see your running total and fuel points accumulated. So using a calculator or cell phone are no longer needed for those who like to keep track of their spend during the shopping process. When you are finished shopping, just head to self-checkout and scan a barcode on any available machine and complete the pay process. This new offering is a speedy way to get what you need and avoid the hassle of the long checkout lines.

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!

We look forward to your comments.

Posted in Business Sourcing

Tactical and Strategic Sourcing

Wednesday, November 14th, 2018

Today’s post is from our SafeSourcing Inc Archives

Let’s define each one then note the differences. This will aid in better understanding how procurement professionals justify adopting one sourcing method or the other.

Strategic Sourcing

Strategic sourcing is a precise, long term approach to acquire supplies and or services for an organizations current need at the lowest total cost of ownership (TCO) and the lowest risk to the supply chain. This process creates a relationship between the customer and vendor that will ensure continuous improvement in quality, delivery, cost and service while providing the means to attain ideal proficiencies with both parties. There are three key components of strategic sourcing; spend analysis, market research and supplier evaluation and relationship management. These steps require a specifically trained staff using a specific software tool to achieve desired outcomes.

Tactical Sourcing

Tactical sourcing is a short term, transactional activity practiced in small to medium companies. This approach to purchasing goods and services uses quick quote and order processing to support the company’s production or needs. This approach does require management within the company to ensure the right material is purchased at the right price and at the right time. Unlike strategic sourcing, companies are not concerned with the vendor’s core capabilities or creating a long-term relationship.

So based on the two sourcing methods one might think that the strategic approach makes for best practices compared with the tactical method. So why do many companies choose the latter of the two.

Consider a small to medium sized company where purchasing has the ability to use just about any supplier that fits their need. Typically, buyers will use their own best judgement to find the right supply that meets both their pricing and best shipping dates. This is very common in companies that don’t have the luxury of time or technology to assist them from shifting form tactical to strategic purchasing. Their biggest concern is to keep things moving while keeping an eye on costs, hence why tactical sourcing makes the most sense.

Now compared this to a larger company where they could have a suite of ERP technology and a dedicated team of purchasers. They have the time and resources to properly vet suppliers, develop reports, perform a spend analysis, and conduct market research. With these capabilities, procurement can negotiate lowest total cost of ownership (TCO), taking into consideration, quality, price, delivery and lead times. These buyers will have a deeper understanding of the company’s overall needs and requirements. Taking a strategic sourcing approach makes the most sense in these cases.

Finding the best sourcing method for any size company should be a priority, yet time and time again, companies fail to implement any thoughtful process or policy costing them time and money. SafeSourcing, with its dedicated staff and E-procurement suite of tools could do just that. Lower your risk and increase savings without hiring additional staff or buying expensive software. It’s a win-win!

We look forward to your comments.

Posted in Business Sourcing, Strategic Sourcing

Tuesday, November 13th, 2018

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

CVS Health’s $69 billion bid to acquire insurer, Aetna, has been approved by The Justice Department (JOD) . This could redefine how Americans get insurance. The JOD requires CVS to divest Aetna’s Medicare Part D prescription drug plan business for people as part of this deal. CVS has proposed selling that part of the business to WellCare Health Plans, which would satisfy the JOD’s request. “The divestitures required here allow for the creation of an integrated pharmacy and health benefits company that has the potential to generate benefits by improving the quality and lowering the costs of the health care services that American consumers can obtain,” Assistant Attorney General Makan Delrahim said in a statement.1

This merger would allow the Woonsocket, Rhode Island-based CVS to expand its drugstore-pharmacy (with more than 9,800 locations) into a healthcare coverage and medical care delivery destination. This would also allow more customers into CVS facilities for routine health ailments and away from costly emergency hospital visits. Aetna is the third largest U.S. health-insurance company and fourth-largest individual prescription drug plan insurer.

CVS Health indicated the Aetna acquisition is expected to close within the fourth quarter of 2018. Once the merger is completed, Aetna will run as a standalone business within CVS.

For more information on SafeSourcing, or on our Risk Free trial program, please contact a SafeSourcing Customer Service representative. We have an entire team ready to assist you.

References….…………………………………………………………………

Mike Snider, USA Today,10/11/2018

Posted in Uncategorized