Archive for March, 2022

Procurement is based on Data Part II

Thursday, March 31st, 2022

 

Today’s post id by Ronald D. Southard, CEO at SafeSourcing Inc.

I asked you to Check back today to learn more about the types of data I discussed in the whitepaper.

The following is second excerpt from my White Paper Titled Re-Imagining Procurement where I will discuss my view of the types and availability of the data that you have to work with. In doing so, please remember the old saying of “Garbage in Garbage out”. Oh, that it was not still true today!

For our purposes I like to place this data as the following Three Pillars:

  1. Pillar One – Your Data: This is the data that your company has available that can be accessed and used in the procurement process. Where is it and who controls it?
  2. Pillar Two – Our Data: This is your e-Procurement provider’s data such as specifications, templates, and historical category data. I call this our data because SafeSourcing is a Cloud based SaaS provided Procure to Pay SafeSourceIt™ family of solutions. See a summary below.
  3. Pillar Three – Their Data: This is the Suppliers or Vendors Data. This will include all data associated with getting the best possible product or service at the best possible price, at the exact location, and at the exact time it is needed.

The first question that should come to mind is where this data comes from both internally and externally. The answer is that it depends. It depends on how sophisticated your internal business solutions and processes are and the level of drill down (meta data) that is available in your business systems and how well they interact or are linked for a corporate view.

  1. Here is an example: Company A has a purchase order system that has all the attributes required to provide a clear historical view of what has been purchased. The CPO asks a procurement professional to get a copy of the P.O. for a particular product or service that has been purchased. The requested P.O. arrives and has one line on the entire document that reads per the attached purchase and sales order (a vendor document). Come on, admit it. This has happened to you more than once and it will continue to. So now what? Get a copy of the order from the vendor? Cool idea. When it arrives, the pricing is different, so what now. Let us review the contract. Who has the original signed copy? Get my drift?

SafeSourcing is a data rich company built to support procurement professionals. Included on our website are several million words in the form of white papers, a sourcing wiki, a specifications library, a daily blog focused on procurement and a supplier database including a query tool that allows you to search global sources of supply. There are many more tools and data sets that are here to make your life easier.

If you’d like to discuss the use of our data or have us review yours, please contact a SafeSourcing customer services associate, please click here.

Procurement is based on data!

Wednesday, March 30th, 2022

 

Today’s post id by Ronald D. Southard, CEO at SafeSourcing Inc.

The following is an excerpt from my White Paper Titled Re-Imagining Procurement

Procurement is based on data. It is not based on CPO’s, Category Managers, Buyers, Suppliers, or any titled person with some measure of spend authority or approval. It is based on data. It has always been and will always be. If you do not have data and you do not know where to get data, then your procurement process will be faulty, your pursuit of results lengthy, and less than what they should be. Your company will also be at significant risk. Data can provide the leverage to differentiate you from your competitors and dramatically better results. It was Archimedes who said, “Give me a fulcrum strong enough and a lever long enough and single handedly I can move the world.” Let your data work for you. However, beware that you are going to have to know where to get it and how to interpret it

Data:

Let us talk a little bit about data. For the purposes of this whitepaper, I will restrict data to three areas. However, they are particularly critical areas because without all three, no matter what tools you use or how many resources you deploy or how big your company is, you will end up paying more, experience less quality and suffer shaky less sustainable supplier relationships. The data that are important as we reimagine procurement should not be a secret to anyone. It is the information you always are looking for but cannot often find. These are the three pillars of great procurement results. Tools are only as good as the data they rely on.

SafeSourcing is a data rich company built to support procurement professionals. Included on our website are several million words in the form of white papers, a sourcing wiki, a specifications library, a daily blog focused on procurement and a supplier database including a query tool that allows you to search global sources of supply. There are many more tools and data sets that are here to make your life easier.

Check back tomorrow to learn more about the types of data I discussed in the whitepaper.

If you’d like to discuss the use of our data with a SafeSourcing customer services associate, please click here.

Is Globalization Dead?

Tuesday, March 29th, 2022

 

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

According to Wikipedia   Globalization, is the process of interaction and integration among people, companies, and governments worldwide. Globalization has accelerated since the 18th century due to advances in transportation and communication technology. This increase in global interactions has caused a growth in international trade and the exchange of ideas, beliefs, and culture.

According to BingSingle Source Procurement is procurement in which, although two or more vendors supply the same commodities or services, the customer selects one for substantial reasons, eliminating the competitive bidding process.

Doe this still provide adequate flexibility. This author does not think so.

This type of procurement has grown to include every industry on the planet. Think of Single Source Plumbing, Single Source Construction, Single Source Manufacturing amongst hundreds of others, let alone single sourcing of finished goods from wholesale and distribution companies. Companies that use this terminology in their naming conventions like above or in their marketing strategies in order to reinforce their messaging to targeted new customer acquisition may suffer long term by favoring of long-term single source relationships.

What seems like a solid strategy, combining single source and globalization stagiest are often difficult if not impossible to do. Ultimately becoming global reduces single source opportunity. Throw on top of that Acts of God like unforeseen weather issue or Pandemics like COVID may eliminate single source as a viable strategy and globalization as a reasonable business pursuit. Maybe the old statement of think Globally but act locally requires some new consideration

SafeSourcing is a SaaS procurement focused organization that can provide access to multiple sources of supply globally through our SafeSourceIt™ Supplier Database. This ensures that you get the best price the market has to offer in the location in which you need it every time by introducing the competition for your business that single source eliminates.

If you’d like to learn more as to how SafeSourcing can assist with your sourcing in your operating areas, please contact a SafeSourcing Customer Services Associate

Email Etiquette in the Workplace

Friday, March 25th, 2022

 

Today’s post is our SafeSourcing Archives.

Employees spend approximately one-quarter of their day reading or writing emails. The following are some basic guidelines on email etiquette.

  1. Include a clear, direct subject line.
  2. Use a professional email address.
  3. Think twice before hitting ‘reply all.’
  4. Include a signature block.
  5. Use professional salutations.
  6. Use exclamation marks sparingly.
  7. Be cautious with humor.
  8. Know that people from different cultures speak and write differently.
  9. Reply to your emails — even if the email wasn’t intended for you.
  10. Proofread every message (do not rely on spell check).
  11. Add email address last. Keep your fonts classic. Nothing is confidential — so write accordingly.
  12. Emojis do not belong in your emails.
  13. Keep tabs on your tone – you could be misinterpreted.
  14. Double-check that you’ve selected the correct recipient(s).

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

 

 

Are too much of the costs being passed to us?

Thursday, March 24th, 2022

 

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

A lot of businesses were hurt by the pandemic and many of those companies are still trying hard to get back up to speed.  Lack of workers caused companies to cut back on production which slowed down supplies to the market and led to rising prices on about everything that we consume.  Home appliances are one the thing that was affected.  Lack of the materials needed to make these appliances is listed as the main reason for the increases that have occurred, and these increases are forecasted to continue throughout this year.  Some analysts are predicting that they will increase by more than ten percent.

Now with the pandemic restrictions being lifted we are facing another crisis that will impact the price of items due to fuel costs.  Besides the rising cost of manufacturing this new fuel issue will also affect the cost of appliances and other goods.  The rising fuel costs further squeeze retailers, and they are forced to pass on the higher expenses to us the consumers.  Anything that must be shipped could cost more as the price of fuel continues to increase.  Also, many of the products contain plastic and synthetic materials which are petroleum based so the higher oil prices the more expensive these parts become to make.

Even though the price of materials has gone up and we have been paying more for appliances why have companies like LG been making record sales during these demanding times.  Are they passing too much of the costs to the consumers?  Last year, LG passed up the Whirlpool Corp. as the world’s top manufacturer of home, kitchen, and laundry appliances after posting record sales in 2021.  Its home appliance and air solutions division had another record setting year with over twenty-seven trillion in revenue which is an increase of over 21 percent from the year previous.  It seems that a lot of companies like this one have been retaining strong profit margins during the pandemic because they have cut costs and continued to pass the unreasonable prices to their customers.  I guess with the pandemic and now the high fuel costs we need to start asking how long this can continue to go on.

Interested in learning how SafeSourcing can help your company save money and run more efficiently?

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.

 

Lumbering Costs

Wednesday, March 23rd, 2022

 

Today’s post is by Patrick Quinn a Procurement Specialist at SafeSourcing Inc

The price of lumber has taken a few sharp turns over the last two years. A halted economy in 2020 saw a dramatic increase in the price of lumber from March to May, followed by a steady decrease in price from May to July. The price remained relatively stable from July to November, but since December, the price has seen a sharp increase from $534 per 1000 board feet to $1,420 per 1000 board feet. The National Association of Home Builders cites several factors such as supply chain bottlenecks, new tariffs, low production, and supply issues caused by flooding in British Columbia and Washington.

However, several of these factors still don’t quite add up to a near tripling of the price of lumber. Tariffs from Canada are rising from 9% to 17.9%, but that’s still less than the 20% tariff implemented from 2017 through December 2020. Flooding issues only affected the area’s production for a short time in November, too. The difference can be found elsewhere than what the NAHB are saying, though.

During this time, the revenue increase of the home improvement industry has increased $13.4%. One of the top home improvement companies awarded a pay increase for top executives over 40% just before this price spike. A different company also doubled the pay of its top employee. And despite consistently high industry revenue, the gap between consumer cost and profit never saw any change. The largest change in cash flow consistently lands in the same pockets.

To help you find the source of your rising costs, please contact a SafeSourcing Customer Service Representative.

 

 

 

Paper Profits in Pandemic!

Monday, March 21st, 2022

 

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

We have experienced a shift in our economy, due to the unexpected demand on supplies, and supply chain disruptions during the recent pandemic.  Labor shortages and freight issues have caused major issues that none of us could foresee. The inflation rate is soaring, and gas prices are rising at a steady clip which is evident in what it cost to buy food, consumable goods, and appliances.

The global pulp and paper market is projected to grow from $351.51 billion in 2021 to $370.12 billion in 2028 at a CAGR of 0.74% in forecast period, 2021-2028. [i] The main products include wrapping paper, paper packaging material, writing paper, printing paper, tissue paper, rolls, and specialty paper. The leading paper manufacturers in the U.S. are International Paper, Georgia-Pacific, Kimberly-Clark, and WestRock. [ii]  Sales of disposable sanitary items such as toilet and bathroom paper, as well as the use of beverage napkins and specialty wipes in restaurants and bars, have greatly increased. The demand for paper packaging has also increased, partly due to the drive to reduce plastic use.

At the initial surge of the pandemic, retailers were often out of stock on paper products which resulted in a loss of revenue for their bottom line. According to Supermarket News, out-of-stocks cost retailers $82 billion in missed sales last year.[iii]  While consumers and retailers are negatively affected, the manufacturers have profited greatly. Still, the U.S. fast-moving consumer goods (FMCG) sector grossed sales of $970 billion in 2021, up 2.1%. The bath and toilet paper market is expected to rise in both the commercial and residential use. Kimberly-Clark’s annual revenue increased from $18.5 billion in 2019 to $19.1 billion in 2020, a (3.74%) increase (35.1% from Consumer Tissue).[iv]  They experienced a .19% decrease in revenue in 2019 from the previous year. In their current annual report, Georgia-Pacific reported a total revenue of $1,182.1 million for FY2021, representing an 11.3% increase when compared to that in FY2020.[v]

The fact is, increasing costs and low availability is an issue of concern that affects both the consumer and retailer. If you are a retailer with concerns about stock availability and/or cost reduction, allow our SafeSourcing team to partner with you to procure your products and services and get the savings you need.

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:

[i] https://www.fortunebusinessinsights.com/pulp-and-paper-market-103447

[ii] https://www.fortunebusinessinsights.com/tissue-paper-market-102847

[iii] https://www.supermarketnews.com/issues-trends/grocery-retailers-customers-paying-price

[iv] https://craft.co/kimberly-clark/revenue

[v] http://www.gp-industries.com/IR/data/_uploaded/file/Annual%20Report/2020-2021/GP%20Industries%20Annual%20Report%202020-2021%20LR.pdf

Meat inflation and rising profits

Friday, March 18th, 2022

 

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

Since the beginning of the Pandemic, we have seen drastic changes in our world. We have seen death tolls rise, then fear and doubt seeping into society. Then came the lockdowns and the switch to work from home, with essential workers still braving the frontline. Over the course of two years, we have gradually adapted to new situations and a changed world.

One of the biggest changes we have seen has been the rise of corporate profits. The need for essential workers forced companies to compete for employees, which then triggered rising wages. These wages have ultimately been passed on to the consumer through increase in goods. The problem is that overall, the increase in wages does not account for the high rate of inflation that we have seen in multiple industries, primarily the meat industry. This notion is confirmed when we see some meat companies have seen record profits in 2021 after setting record high prices.

So how did it happen? First, during the pandemic, many meat companies had to shut down their operations. There were people getting sick and unable to work, while others feared going to work and getting sick. The companies were forced into a labor shortage that turned into a product shortage, raising prices for the consumer. Then there were federally mandated safety measures that had to be implemented, which was supposed to reduce the number of people exposed, but the spread continued, continuing to affect the industry workforce.

In addition, those in the meat industry were facing additional costs themselves in feed, transportation, and labor. All these factors have affected the costs of meat to rise drastically, which most of us have noticed at the grocery store. But the numbers do not quite match up. The inflation costs associated with the meat industry are higher than expected. This has led to record profits in many corporations, including those in the meat industry. According to one source, profits have been up to 40% higher than in previous years, while their costs have gone up but far less than the prices they are charging. In addition, the largest companies have been the only ones to make it through the pandemic mostly unscathed, making smaller companies shut down. In fact, this even has gained the attention of President Biden, who called out the largest companies for their “market domination, which he said is driving up prices and hurting consumers.”

While the costs going up are affecting everyone, there are some things you can do to help. By using a procurement partner, like SafeSourcing, you can get your organization’s costs under control, possible even locked in for a contracted term. We can help you find the products you need in the meat industry at the best costs, helping to secure your supply chain, ensuring consistent and timely arrival of the products you need, while avoiding addition cost increases.

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

Source:

https://www.fooddive.com/news/tysons-profits-soar-amid-higher-meat-prices/618564/

 

What is your BEEF (Corned That Is)? HAPPY SAINT PATRICKS DAY

Thursday, March 17th, 2022

 

Today’s post is by Ronald D Southard, Chairman and CEO at SafeSourcing Inc.

The theme of our posts for the next few days, follows the idea that the retail and wholesale prices we are seeing on about everything are unrealistic and exceedingly high. That includes the favorite ingredient in your St. Patrick’s Day dinner, Corned Beef. While you are paying too much at the checkout, many vendors are posting record profits while raising prices and buyers have had enough. One well known Chicago area butcher has seen his cost go up 67.7% year over year for Corned Beef. It is certainly no fun for him to quote these increases to his customers and it is no fun for consumers looking forward to an enjoyable holiday meal to have to foot these increases.

At any rate, at SafeSourcing our primary business objective is to keep costs down for our customers. Our pricing has not changed nor has our approach. Give us your best price and we will find you better pricing and or alternative sources that may operate at better margins.

If you like to speak with us about reducing your costs, please contact a SafeSourcing Customer Services Associate.

 

 

Buyers Are not Fooled by These Price Increases

Wednesday, March 16th, 2022

 

Dave Wenig is the Senior Vice President of Sales and Services at SafeSourcing Inc

SafeSourcing, as an organization, is 100% focused on getting our customers a great price for the goods and services they need. So, as we have watched our customers get price increase after price increase, we have been increasingly frustrated. We are constantly collaborating with our customers to help them use our eProcurement service to get fair pricing.

More recently, that has taken a turn. It is painfully obvious from our perspective that many vendors are increasing costs well beyond what is necessary based on the actual market conditions. Many vendors who have repeatedly increased pricing in the last year for a variety of products have also reported record profits for the same time period.

We have plenty of examples. One that comes to mind is a large provider of corrugate who notified our customer of a very large price increase. When we finished an RFQ event for those items, we found that they were about 22% higher than their closet competitors. Another example is hot dogs. We recently sourced hot dogs and found that the vendor had passed along price increases which would have put them 24% over where their competitors quoted in the RFQ.

Those are just a couple of examples, but it is happening in about every purchasing category right now. SafeSourcing will be focusing on a different example in upcoming blog posts and digging deeper into each.

Our customers are tired of these unjustified price increases and false excuses. If you are tired of it too, let us work together to push back against them. We are doing this now for many customers and can for any buyer.

For more information, please contact SafeSourcing.