Archive for February, 2021

What are you doing about your Contract Management Needs?

Friday, February 26th, 2021

 

Todays post is by Ronald D. Southard, CEO at SafeSourcing Inc.

If you want to insure against contract leakage that can be as much as 5% per year and also protect the savings from your hard fought eNegotiations, it may be time to take a look at your contract management needs.

Most contract management systems have relatively short ROI periods. In fact a company might even be lucky enough as they go through their data collection process to find a single contract that when analyzed might pay for the entire system.

There are all sorts of benefits associated with using contract management software. Probably the most important and least recognized of which is finally having all spend data in one location enabling more effective negotiations. If you have ever run an e-procurement event and tried to assemble a simple specification or incumbent supplier data you already understand the time involved. Administrative costs alone can be reduced by 25-30%.  That’s a huge number in today’s world of insufficient staff.

If you want to get started, here are some basics that a system should be able to provide.

1. Create contracts
2. Maintain contracts
3. Control contracts
4. Track user access to contracts
5. Track and monitor the status of contract Meta data
a. Award date
b. Contract begin date
c. Contract end date
d. Begin delivery date
e. Escalator language
f. Notification clauses
g. Termination Clauses
6. Automatically alert buyers and management of required actions
7. Custom Reporting
8. Supplier Scorecards

If you want to get started tomorrow, please contact a SafeSourcing customer services account manager and ask about SafeContract™.

We look forward to and appreciate you comments

The Benefits of Contract Management

Thursday, February 25th, 2021

 

 

Today’s post is our SafeSourcing Archives

Buyers rely on contracts with suppliers to keep their business going. Shippers, vendors, outsourced services and independent contractors all require a high level of contract management system to maintain efficient relationships for their organization. Understanding the impact of poor contract administration on their organization can justify the investment in comprehensive contract management services.  However, one of the biggest pitfalls of not having a contract management system in place is the risk of a contract expiring without the buyer realizing it and thus the buyer being in the control of the supplier to either keep goods and services coming or deliveries just stop since the contract came to the end of the term date.

A contract is drawn up to create the guidelines for a business relationship. When you abide by the terms of the contract, you reap the benefits that it has to offer. But poor contract administration can cause you to violate terms of your contract, which can lead to penalties, fines and a potential lawsuit. Each move made with a contracted entity should be dictated by good contract management to avoid the high cost of the contract penalty clause.

An efficient contracted relationship includes a reporting system that informs both parties of activity performed under the contract. Without this reporting, the two sides have no way of monitoring the benefits of the agreement and developing any changes to make when the agreement comes up for renewal. Effective reporting also keeps track of quantities that helps each side monitor their usage and determine when contract limits may have been met.  Poor contract administration can cause each side of an agreement to lose track of the contract term. Companies can get caught up in the daily routine of doing business and lose sight of contract renewal dates. With a relaxed or no contract management system in place, companies could be operating under expired contracts and not realize it.

Fortune 1000 companies generate an average of 40,000 to 80,000 contracts; less than 80% of retailers have a Contract Management system in place.

  • Today’s Retail Environment
    •  Fragmented Contract Management Procedures
    •  Labor Intensive
    •  Lack of common systems infrastructure
    •  Poor contract visibility/analysis/compliance
  • Regulatory compliance
    •  Contracts dictate supplier-customer relationship
    •  Pricing, Terms
    •  Service levels, Quality
  •  Forcing companies to strengthen contract policies
    •  Document procedures
    •  Track and control financial exposure
    •  Mitigate risk
  •  Sarbanes-Oxley
    •  Every Transaction
      •  Approved/Stored/Reported

How to avoid accidentally extending an expired contract is the key to ensuring that an expired contract isn’t kept on foot is to engage in good contract management. Know your contract and monitor contract performance. Be aware of deadlines and notice period and communicate and document any changes.

If you are planning to explore the benefits of contract management, feel free to contact SafeSourcing.   If you would like more information on how SafeSourcing can help you with a contract management system, please contact a SafeSourcing Customer Service representative.  We have an entire team ready to assist you today.

We look forward to your comments.

 

 

In these days of big data, how should retailers manage their legacy contracts?

Wednesday, February 24th, 2021

 

We are all aware that the majority of retailers large and small do not have contract management solutions in place. In order to mitigate their risk, where should focus be placed when beginning implementation?

We have conversations all of the time with retailers as to what is the best way to store and leverage the language or data within existing contracts. My answer has always been the same and that is the identification of your critical Metadata.

According to Wikipedia Metadata is loosely defined as data about data. Though this definition is easy to remember, it is not very precise. The strength of this definition is in recognizing that metadata is data. As such, metadata can be stored and managed in a database.

When we think about contract management, we need to be thinking about mitigating risk and not necessarily all of the language embedded in a contract. On many occasions this information is listed on addendums or attachments and not necessarily in the master agreement itself. For sake of simplicity, and this is certainly not an exhaustive list the following twenty items reflect the type of metadata you might want to hi-lite and set alert targets against in your current contracts.

1.  Supplier or Seller Information
2.  Purchaser or Buyer Information
3.  Detail of Goods to be purchased
4.  Detail of Services to be purchased
5.  Delivery Timeline Details of the Goods and or Services
6.  Agreed Upon Price
7.  When and where should payments are to be made?
8.  Payment Terms
9.  Down Payment Terms
10.  Delivery Dates
11.  Delivery Location or locations
12.  Risk of Loss or Damage and transfer language
13.  Is Assignment of this Agreement Allowed?
14.  Detailed Warranty
15.  Trademark infringement language
16.  Origination Dates
17.  Termination Dates
18.  Termination Notice
19.  Additional Clauses
20.  Signature Details

The above should be data that is considered for inclusion during the review process that your solution provider puts in place for you during the early stages of implementation, training and review of any contract management offering.

If you’d like to learn more about SafeContract™ from Safesourcing and the services provided to assist in defining your Metadata please contact a SafeSourcing customer services account manager.

We look forward to and appreciate your comments.

Retail Contract Leakage. Where does it come from and how can we stop it?

Monday, February 22nd, 2021

 

Todays post is by Ronald D. Southard, CEO at SafeSourcing Inc.

How does your organization  now ensure that the award of business is implemented or delivered as awarded so that you indeed receive all of your savings?

This is probably the most difficult part of the entire procurement lifecycle. The first part is to understand your data and where it is kept, that includes understanding what constitutes contract leakage so that you know what you are looking at. Once you have the data needs to be looked at on a regular basis in order to insure leakage is not occurring. This should be at least monthly depending on contract language. Most contract management systems have alerts that can be triggered as frequently as required.

The following list although not all inclusive speaks too many of areas in which contract leakage can occur. This happens in all companies large and small. If you are aware of them, capture them and report on them there is a good possibility of controlling them.

1. Buying without a contract.

2. Expensing something outside of a contract

3. Having multiple contracts in place:

4. Executing a new agreement when one is already in place

5. Paying a price different from the contract

6. Delivery variances

7. Quality specifications variances

8. Making payments at a prices different from the contract

9. Scope creep

10. Invoice discrepancies

11. Missed volume discounts

12. Insurance discrepancies

13. Shipping discrepancies

14. Expired contracts resulting in price uplift

15. Evergreening

16. Overtime Violations

17. Material discrepancies

18. Sub Contractor discrepancies

Don’t  have your team work hard to drive benefits with your procurement solutions and then lose much of what you have gained to contract leakage. Ask your e-procurement solutions provider how they can help or save yourself a lot of time or please contact a SafeSourcing Customer Services Account Manager.

We look forward to and appreciate your comments.

Retailers; is your sourcing transparent enough?

Sunday, February 21st, 2021

 

Todays post is by Ronald D. Southard, CEO at SafeSourcing Inc.

If you are not sourcing at least 30% of your cost of goods and services using e-procurement tools, you are lagging your industry leaders as well as being significantly behind other industries. As such; you are not getting the best costs and not driving the best margins for your company.

Reverse auctions since their inception more than a 16 years ago haven driven healthy competition amongst supplier companies. As such the results of a reverse auction can provide a great benchmark for both the buyer and the supplier. For the buyer the results can be used as a tool to evaluate how to best source other products and services. Additionally suppliers that are not the low quote or winning bid now have the opportunity to evaluate why that is and what they need to do in order to improve or to be more competitive in the market place. This of course is all happening without the need to collect, collate, compare or negotiate during the process. In other words it is happening transparently to the normal sourcing process. I watched a reverse auction today where 4 suppliers placed 180 quotes for a dozen line items in under 30 minutes. No buyer can do that. Additionally reverse auctions provide the opportunity for suppliers that are outside of your business area or knowledge base to bid for your business.

Possibly the single largest area of benefit to reverse auctions outside of price compression  for  procurement professionals  is that it offers  a significant opportunity for process improvement since most solution providers offer a standard process for hosting reverse auctions. Everything is done in one place using standard processes in building the event to the final analysis of the bids collected. Information availability is immediate for evaluation and is archived for easy access in the future. This reduces the overall procurement life cycle, eliminates or reduces the opportunity for human error, and provides a standard way to conduct and award business.

Please contact a SafeSourcing Project Manager in order to learn more.

We look forward to and appreciate your comments.

COVID Keepers

Friday, February 19th, 2021

 

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

We are all looking forward to the day when we can resume our normal activities, post COVID style. We will be able to congregate with one another soon, but it will be a new normal. There are some improvements and innovations that were born out of this tragedy that should remain. This has been true throughout the decades.

During the Great Depression, the electric washing machine was in its infancy and many people could not afford to own one, so a couple of entrepreneurs got together and invested in buying a few of them to rent out; thus, the birth of the laundromat. Shelf stable food products such as Spam and macaroni and cheese in a box were created out of necessity, during the Great Depression and WWII. People needed products that were inexpensive, could be prepared quickly.

Due to our current situation, nearly every industry has had to rethink how they are operating and how to stay relevant.  Brick-and-mortar retailers have developed a stronger online presence. Restaurants which were traditionally known to only provide dine-in services have had to find a better way to serve their community by offering take-out service and partnering with delivery services such as Uber Eats and DoorDash. Some restaurants also had to upgrade their POS system to accommodate tracking orders and deliveries.

Technology, in general, has become more valuable because to do business, you need to have a way to connect to your market and to your employees via remote methods. Buy online and pickup in store, also known as BOPIS, was available in some areas but has gained popularity during the COVID crisis. Grocery stores are offering curb-side pick-up and delivery services. Behind the scenes, there are several layers of technology required to maintain this type of operation. Not to mention added security to protect the buyer from fraud and theft.

In the education arena, from K-12 to college, students are learning remotely, and educators are learning to navigate delivery of their curriculum in a virtual world. Unfortunately, snow days are collateral damage.  As a result, when we go back, there is no going back to business as usual. The supply chain has been reimagined and there are some things worth keeping. Make new friends but keep the old!

For more information on how SafeSourcing can assist you in exploring your procurement

solutions for your business efforts, or on our Risk-Free trial program, please contact a SafeSourcing Customer Service RepresentativeWe have an entire team ready to assist you today.

 

 

Are You Considering Installing Electric Vehicles or EV Charging Solutions?

Thursday, February 18th, 2021

 

 

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

With the vaccines now available and people starting to look forward to the pandemic slowing down, we can expect that there will be more people traveling in the next few months.  With this increase in traveling of course we will probably come to see higher gas prices.  We have already seen the average price per gallon raise approximately 13 cents in the past month.  With the price of gas rising, we can also expect that sales of Electric Vehicles will continue rise over the next few years.  It is estimated that by 2025 that 25 percent of vehicle sales will be electric.  The Department of Energy (DOE) defines electric vehicles as vehicles that use electricity as their primary source of power or to improve the efficiency of conventional vehicle designs.

With all of these electric vehicles, owners will be looking for convenient places to charge them besides at home.  Because of this increased demand, national retailers are partnering with companies to install charging stations throughout the United States.  Installing these charging stations gives retailers the opportunity to attract customers to their stores to use the stations, as well as increased store sales from the customers spending more time shopping while they wait for their vehicles to charge.  Below is a list of some of the retailers that currently offer EV charging:

  • Kroger
  • Walmart
  • Kohl’s
  • Target
  • Safeway
  • Ikea
  • Walgreens
  • Meijer
  • Whole Foods

If you need help finding EV Charging solutions for your company, feel free to contact SafeSourcing.   We can gather all the necessary information for you and help you decide which company meets your needs.  If you would like more information on how SafeSourcing can help you, can help you,  please contact a SafeSourcing Customer Service representative.  We have an entire team ready to assist you today.

 

 

 

 

 

The Ability of the Market to Bring Buyers and Sellers Together in an Open Environment

Wednesday, February 17th, 2021

 

Today’s is our archives at SafeSourcing, Inc.

Recent advances in electronics and internet technologies have had major impacts on supply chain management and on sourcing strategies and practices. One such development that has attracted the attention of many companies and gained popularity is the reverse auction, also referred to as on-line reverse bidding. Over the past few years, many companies in a variety of industries have started using reverse auctions. The list includes GE, Boeing, Sun Microsystems, HP, P&G, Dow Chemical, Staples, US Foods and many more.

In speaking recently with a CFO of a leading company in their vertical who believes in using reverse auction technology and has used this procurement method in past organizations that he was also the CFO, he stated “If you really believe in what you do with procurement and reverse bidding, which is more measurable directly to the P&L than any solution I have ever deployed, then reverse bidding is surely the best procurement strategy that a company can deploy. Not only in-direct spends but also capitol and direct spends. It can save jobs as well.” This CFO can effectively argued that nothing they (procurement departments) are working on can have a larger impact on their company and employees. Not new stores, not new branding or new products. Nothing.

The most obvious benefit from reverse auctions is in purchasing cost savings to the buyer. As any dollar saved in purchasing cost adds a dollar to the bottom line. Reduction of procurement costs has always been a high priority for top management. Reverse auctions/on-line bidding can have significant impact on reducing purchasing costs.

SafeSourcing eProcurement, particularly reverse auctions, are a relatively new way to increase your bottom-line using e-Procurement tools to enhance the spend process. Utilizing new technologies as mentioned will add profit dollars without selling one new customer buying your products or services. The savings are traditionally 10X your investment in e-Procurement tools. You’re just accepting a different way to solicit bids/pricing even with your incumbent vendors that you currently work with.

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

 

 

The customer experience matters more today than ever.

Tuesday, February 16th, 2021

  

Today’s post is from our archives at SafeSourcing.

This is an oldie and still works today, maybe more than ever.

Within the span of one hour this weekend, I experienced both ends of the customer service experience at two retail establishments. The first was at my bank and the second at the Apple store. I went to the bank for standard cash withdraw. The line at the ATM was exceedingly long so I elected to go inside. I was greeted with a more manageable line and no greeting from anyone at the bank. After 10 minutes of waiting I heard, “next”. I was asked what I needed help with. I did not have my account number for my transaction and I would have thought it was inconvenient for my banker to retrieve this information. It was an overall unfriendly transaction.

Next I went to the Apple store to purchase a case for my iPad. It was equally as busy, likely more so. I was immediately greeted and asked what was bringing me in that day. I was taken to the accessory area and asked what I was specifically looking for. I was then asked if I needed help with anything else. All while smiling I must add. I left happier than when I went in.

I want to buy from people and organizations that treat me like I matter. When I select a supplier, their culture matters. The way I will be treated matters. The way my company and my clients are treated matters.

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.

 

 

Would You Rather Barter?

Monday, February 15th, 2021

 

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

Recently I learned that the old way of obtaining goods, bartering, which pre dates many currencies you can see around now, is still around and for a very good reason. Bartering is what many people used to obtain goods or services when they did not have money or currency to pay for a good or service. It involved offering a different good or service in exchange. For example, a bread maker may offer breads to a butcher in exchange for a supply of meat or perhaps someone would do some amount of farm work for someone in exchange for room and board. This barter system is still in place today in at least one industry and the reason behind it is an interesting one having to do with poaching and furs.

The Zoo industry is an often loved, but also controversial industry. While every day, many people visit zoos to see, explore, and learn more about the animals we wouldn’t be able to see otherwise. And often these animals are obtained in a unique way. Many years ago, the fur trade and the zoo industry led to greater poaching and animal hunting, especially for endangered animals. Because people wanted zoos to preserve the lives of wild animals and discourage poaching and illegal captures and selling of animals, many countries agreed to only allow zoos to barter for their animals.

This barter system to zoos meant that they could not buy any of the animals that they house. This would directly affect those that were looking to profit from trapping rare and large animals by no longer allowing any cash payments. Instead, zoos could trade animals with other zoos. Ultimately, some animals are more easily obtained and so some animals have been used to help with the bartering. For example, one zoo in the United Kingdom primarily trades jellyfish for other animals within its zoo and aquarium.

While bartering may work for zoos and be a deterrent for those who wish to profit at the expense of animals, most of us would struggle doing business this way. Outside of the neighborhood gestures of trading baked goods or soup for help with shoveling snow or mowing a lawn, business must operate on a buy and sell agreement. If your organization falls into this category, which likely does if you aren’t a zoo, then you can use the tools and experience SafeSourcing offers to help you find the right organization to do business with, find the right product or service to fit your need, and know that you are getting a good and fair price for those goods and services.

For more information on how SafeSourcing can help with your procurement needs or on our

Risk Free trial program, please contact a SafeSourcing Customer Service RepresentativeWe have an entire team ready to assist you today.