Archive for July, 2019

Retail spend management basics.

Monday, July 15th, 2019

 

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

No you do not!

A major step to trying to understand where to spend your effort when building an e-RFX attack plan is to understand the detail of your company’s P&L and how it can provide clues as to where you might have the most impact.

I meet with buyers or other e-procurement knowledge workers on a regular basis that want to know what categories are the best to select in the short term to prove the benefit of  e-negotiation tools. This quite honestly is not a bad approach for pilot selection as it creates an almost sure thing that results in a lot of excitement and the energy to move the process forward within a company.

Quite often before meeting with a new client, I will analyze their annual report and their summary and detailed P&L if available in order to get a good idea as to where the opportunities are hiding that can have an immediate impact. However in order to have long term viability as a way to conduct the business of buying, a more detailed analysis is required. Quite frankly before you can even begin to discuss vendor or supplier selection, management or evaluation this process is critical.

Key data required to prepare you for this analysis can consist of but is certainly not limited to the following. All of this data is readily available from a variety of industry sources. Quite often the data is a year old but you can bet it is better than anything else your customer may be using today.

1. Research and accumulate your specific Industry data
2. Analyze last years P&L
3. Compare your cost of goods with your Industries averages
4. Compare your gross margins with your Industry averages
5. Compare your net earnings with your industry averages
6. Conduct the same comparisons with selected retailers with whom you compete. Pretty easy if they are public.
7. Compare your departmental sales and margin results to those of your specific industry.
8. Look for department level anomalies.
9. Look for specific product anomalies within major and sub departments.
10.Select top categories that are below plan and outside industry average for cost of goods and margin.
11.Select top products that are underperforming to industry averages and plan

One example of the above might be to look at the grocery department sub category of pet care. Now drill down to the sub category of cat and dog products and a list of all accessories. Now look at what products are underperforming to the industry and plan. Continue your analysis with other underperforming categories.

In summary, did you need a spend cube to try and figure this out? No you did not. You needed someone that understands your industry and your P&L with some analytical common sense.

If you’d like to learn how these techniques can assist you, please contact a SafeSourcing customer services account manager.

As always, we look forward to and appreciate your comments.

Reverse Supply Chain Management or Reverse Logistics!

Friday, July 12th, 2019

 

Today’s re-post is from our SafeSourcing Archives.

We’ve spent years perfecting how to get “stuff” from in the dirt where we found it, make it more useful, and put it into consumers hands. This is called “logistics”. But now we’re faced with the task of figuring out how to do the opposite, without destroying the planet we got it from.

Enter Reverse Supply Chain Management (RSCM) or “Reverse Logistics as it’s sometimes called. The short definition of RSCM is to capture value from end of life products, and to take them backwards into the supply chain and/or reintroduce them into the biosphere/technosphere through a sustainable and profitable system. This can include activities such as reacquiring ownership of used products from the end user back to the manufacturer or reseller, transportation of used products for sorting, evaluation and designation of products for their most profitable use, remanufacturing or refurbishing, creating secondary markets for reclaimed products, recycling back to base components and responsible disposal.

One example of RSCM is the relatively new business of “Deconstruction”. In this process buildings are taken apart based upon material component value. These materials are either re-used in new construction, recycled into raw materials, or disposed of through environmentally sustainable means. Total annual building materials (C&D debris) disposed of in landfills in the US each year is not tracked by the EPA, but estimates range between 170 and 600 million tons disposed of in landfills currently, typically with only certain metals ever being collected and recycled from the debris. Organizations pioneering this field can be found at http://www.bignyc.org/, http://www.lifecyclebuilding.org/, and www.bmra.org.

Another example of businesses capturing value from RSCM is Dupont, which achieved zero-landfill status at one of their facilities that allowed them to realize $2.2 million in revenue in 2011 from the sale of waste by-products, and $400,000 in cost avoidance (http://www2.dupont.com/inclusive-innovations/en-us/gss/sustainability/employee-engagement/landfill.html). Similarly Subaru, GM, Honda, and Burt’s Bee’s have captured additional revenue or cost avoidance by repurposing waste through reverse logistical processes (http://www.greenmanufacturer.net/article/facilities/manufacturers-gone-zero-landfill).

The challenge is that reversing the supply chain for products that have been modified in an infinite number of ways over their usage life is exponentially more complex than taking virgin material to end consumer product. The premise to that problem however, should be that not engaging this process now while it’s optional, only makes what will certainly become a necessity more complex the longer it’s postponed, and presents a large opportunity cost every year potential new savings/revenue is not captured.

We at SafeSourcing have a knack for finding markets and cost avoidance opportunities that most don’t aren’t even aware exist. 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.

Effective Supplier Data Management Improves Procurement Process

Thursday, July 11th, 2019

 

This may be old, eight (8) years in fact. Its still no less true today then it was then.

The following excerpt is from the above titled article.

There is more to an effective e-procurement program than cost reduction.

While buyers frequently record cost reductions in the range of 30% to 40% when utilizing an e-procurement or reverse auction process, the issues of quality and performance cannot be overlooked.

The foundation for successful e-procurement is the supplier database
that has been developed and is maintained by the e-procurement service provider. Significant time and capital investment goes into the development of an effective supplier database. It provides the buyer with a recognizable advantage in terms of classification of supplier capabilities, historical performance and the quality of the products provided.

The scope, accuracy and functionality of the supplier database are critical components for buyers when using e-procurement. These elements allow buyers to identify the best sources of supply quickly and cost-effectively, oftentimes uncovering alternative sources that were previously not even considered. This is one of the major advantages of including the services of an online reverse auction service provider like SafeSourcing in the procurement process.

Supplier data management is an excellent example of pairing technology advancements with intellectual property to produce an effective, economical support tool that benefits both suppliers and buyers – better pricing,better quality and better sources of supply.

Click here in order to view the entire article.

We look forward to and appreciate your comments.

Believe Me, You could be improving your profitability by up to 73%.

Wednesday, July 10th, 2019

 

Today’s post is by Ron Southard, CEO at SafeSourcing.

I wrote this post a number of years ago, and it is still true today. To many CEO’s believe they can have a huge impact in the sales area. Let’s rebrand and we can drive huge top line sales increases! BS. Yup BS. Many have tried and many have failed.

What they should be saying is let’s  MAKE MONEY. We are in business to MAKE MONEY. We can increase sales by focusing on sales. News flash, visit your stores  and  talk to your customers. Watch you associates. It will be come painfully clear what will improve sales.  You do not need to spend millions to rebrand. We can also keep more of those sales increases and reduce historical margins by focusing on reducing costs.

Read on if you want to learn something. Or go find an investor and delay the asset sale for a few more years.

I would  still be glad to personally discuss this premise with any Retail CEO or CFO that wants to challenge it! Let me do it for you. You’ll be surprised and be a hero and get a big bonus.

Let’s review exactly what a reverse auction is, how simple they are to use and the potential financial benefits?

Reverse auctions are web based  or Software as a Service (SaaS) tools that let retailers and other companies find the best suppliers for any resale or not for resale product or service they wish to source.  Using a web based reverse auction tool, retailers, other business or even large holding companies can locate and invite many more suppliers to take place in reverse auctions than they could possibly find or manage using traditional sourcing methodologies or even tools like BING or Google. During the reverse auction they can review on one screen all of the responses from suppliers, data about the suppliers, notes from the suppliers, product specifications and other necessary information in an instant. Upon auction conclusion which is typically less than 30 minutes including extensions host companies can review potential savings scenarios and award business right from their desktop. Sound simple? That’s because it is.

Now let’s get to the simple financial benefits. Let’s assume a $150M smaller Retail Company with industry average earnings of one percent or $1.5M. Additionally cost of goods for this company is 70 percent or $105M. Let’s also assume this company were to only source ten percent of their for resale goods spend or roughly $11M. With well below industry average savings of just ten percent, total savings generated would be $1.1M which is a direct impact to net profitability. If all other segments of the P&L perform to plan and all savings are recovered during the same business calendar year net profitability would increase to $2.6M or a 73% improvement.  Again this assume no tributes to Caesar or other funny accounting associated with new capital plans and the like

So, why don’t many companies use reverse auctions and other e-procurement tools? That’s a great question! Maybe someone out there has an answer.

If this author were you, I just could not ignore this type of opportunity.

If you’d like some examples of the types of savings SafeSourcing can generate for you by size of spend and category, please contact a SafeSourcing customer services account manager.

We look forward to and appreciate your comments.

What are Amazon Alexa Skills?

Tuesday, July 9th, 2019

 

 

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

With Amazon Prime Day rapidly approaching, it might be time for you to consider purchasing an Amazon Echo if you do not already own one. The Echo is a voice activated; internet connected smart speaker that contains a built-in virtual assistant named Alexa. Alexa will follow voice activated commands and can answer questions, stream music from current music services, set alarms and timers and control smart home devices such as lights, alarm systems and thermostats. If the Echo is a little out of your price range, or you are looking for a more inexpensive alternative, you may consider purchasing an Amazon Echo Dot. This is a hockey puck sized device that is smaller than the Echo and about half the price. Since the Dot is smaller, the sound quality will not be as good as the Echo but is still packs all of the same features. One of the things that make these devices so powerful are the Alexa skills. Alexa comes with a set of built-in skills, but other third-party skills can be downloaded as well. You can think of skills like apps that you download to your smartphone or tablet. These skills can be used for a variety of things such as answering questions, receiving weather forecasts, controlling smart home devices and receiving news content. There is an endless selection of skills that are available and here are a few of the most popular.

  • Apple Music
  • Nest Thermostat
  • Philips Hue
  • Logitech Harmony
  • iRobot Home
  • Amazon Storytime
  • Spelling Bee
  • ESPN
  • Sleep Sounds
  • Zyrtec Daily AllergyCast
  • Uber/Lyft
  • NYC Subway
  • Domino’s Pizza
  • GrubHub
  • OpenTable

If you are interested in upgrading any of your electronic devices, feel free to contact SafeSourcing. We can gather all the necessary information for you and help you decide which devices meet 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.

 

 

 

Honey

Monday, July 8th, 2019

 

Honey

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

There has been a growing concern in the decrease number of honey bees due to pesticides killing them and parasites that get into the hives.

The global consumption of honey is due to exceed 2.8 million tons by 2024. This is largely driven by the growing consumer consumption preference of natural and healthy alternatives to artificial sweeteners. The health benefits of honey range from home remedies such as weight reduction, improved digestion, prebiotic support, acne cure, and a natural exfoliator. China is the largest producer and consumer of honey worldwide.

A few interesting bee facts:

  • Honey bees have pockets in their legs to store pollen called corbiculae. By the end of the day these filled pockets will result in a weight increase of 15%.
  • When it comes time for an older queen bee to be replaced, the worker bees know it and they build new queen cells in the hive. They load the new cells with healthy pupae and flood the cells with royal jelly. They “ball” the queen which means they cluster around her causing her body temperature to rise and she dies. There is only one queen bee per hive. If two are produced, they fight until there is only one survivor.
  • Bees are cold blooded. When the temperature drops below 50 degrees, they can’t fly. Honey bees do not sleep. They remain motionless at night to conserve energy for the next day.
  • The drones’ job is to mate with the queen; however not with the queen in their hive. They travel to other hives. After they mate, they die. They represent 15% of the hive. When temperatures drop in the fall, the drones are kicked out.
  • “Bearding” refers to a form of bees that hang out of the hive (or a cluster of bees) that allow the hive temperature to regulate when internal temperatures get too high.

We look forward to and appreciate your comments. For more information please contact a SafeSourcing Customer Services Representative.

References:

Dorothea Benton Frank, Queen Bee, pp 409-411

http://www.strategyr.com/MarketResearch/ViewinfoGraphNew, 7/3/2019

 

Happy 4th of July from SafeSourcing!

Thursday, July 4th, 2019

The Land of the FREE and the home of the BRAVE! We should never ever take it for granted.

 

 

 

 

 

 

 

We hope you all enjoy your extended holiday weekend. The best to our customers, suppliers and you and your families!

What does SafeSourcing mean by our White Glove Service?

Wednesday, July 3rd, 2019

 

 

Today’s post is from Ron Southard, CEO of SafeSourcing Inc.

When I was in the US Air Force, our TI (Training Instructor) used to conduct “White Glove” inspections.  The obvious reason was to determine if our barracks were clean, And I mean CLEAN. He ran his fingers across shelves, tops of doors, under beds and anywhere that might contain dust or dirt. Believe me as a new recruit you did not want to have anything show up on those gloves.

Merriam-Webster Dictionary provides a simple definition of White Glove: marked by special care or attention METICULOUS.// white-glove service.

At SafeSourcing, white glove service when it comes to hosting an eRFX RFI, RFP or RFQ which are also called reverse auctions or online bidding includes the following. Our customer services team thoroughly reviews the event strategies, supplier selection, contract terms and conditions, and any other information and requirements a minimum of three times by multiple associates before sending it for customer’s approval. Once the team receives an approval from the client, we send out invitations to the supplier community that have been approved for bidding. Simultaneously, our team plays an interactive role with the suppliers and encourages them to participate in the bidding, reviews all pertinent data with them and responds to any questions and concerns on behalf of our customer and finally teaches them how to use our tool. During the live event, our team is online and on the phone with the suppliers in order to respond to any issues that may arise.

While there are multiple steps and many touch points in the simple process explanation listed above, the results speak for themselves. Our customers over the last 30 months across multiple industries and regardless of company or spend size have averaged 24.7% savings.

If you’d like to learn more about how SafeSourcing can help you source any product, service or commodity that you require for your business, please contact a SafeSourcing customer services representative.

We look forward to and appreciate your comments.

 

 

 

 

Sustainable Seafood and Lake Food Practices You Should Be Aware Off.

Tuesday, July 2nd, 2019

 

 

Today’s post is from Ron Southard, CEO at SafeSourcing Inc.

Whether you like to go fishing, eat seafood and lake food or source it for your business. Please, do it sustainably.

I always liked to go fishing as a kid. It didn’t matter if it was freshwater or saltwater as I could walk to both. The interesting thing is that I didn’t really like to eat fish. My mom was not about to clean and cook what I caught, so the only time I ate any non-shellfish, it came from the store, was not fresh and tasted terrible.

Once I met my wife and became used to eating fresh seafood, I began to like it a lot. I still like to fish today, mostly catch and release. That’s probably a good thing as our fisheries worldwide are severely stressed. Unfortunately, three quarters of the world’s fisheries are fished to capacity or overfished. That’s a really a shame for both sports’ fisherman and our ever-expanding global population in search of sustainable food sources.

A couple of organizations you should know about and visit that are helping in this capacity for seafood, lake food and shellfish are Alaska Seafood where you can learn more about FAO-Based Responsible Fisheries Management Certification. You can also learn more about Best Aquaculture Practices for shell fish at this link.

It’s nice to benefit from our fisheries and to be able to go fishing in our oceans, lakes and streams. Doing it in a sustainable way will preserve it for our future generations.

If you’d like to learn more about how SafeSourcing can help you source your sea and lake food and how we hold our suppliers accountable to local and global standards, please contact a SafeSourcing customer services representative.

We look forward to and appreciate your comments.