Archive for June, 2022

Are you aware of CertiPur-US® Certification?

Thursday, June 30th, 2022

 

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

Flexible polyurethane foam is widely used as a cushioning material in the production of many specialty items that we all use every day. The question is what type of standard are adhered to when they are manufactured and does it support emerging circular economies.

According to the CertiPUR-US® website “the CertiPUR-US® program was developed to provide the comfort and confidence of knowing the flexible polyurethane foam meets standards for content, emissions and durability and are analyzed by independent, accredited laboratories. Today, foam producers from all countries may participate in the program, as long as they meet our rigorous certification guidelines.

CertiPUR-US approved foams are:

  1. Low emissions (VOCs) for indoor air quality
  2. Made without ozone depleters
  3. Made without PBDEs
  4. Made without mercury, lead, and heavy metals
  5. Made without formaldehyde
  6. Made without prohibited phthalates

If you’d like to learn more about how SafeSourcing can assist in properly helping to ensure your current suppliers or new ones from our SafeSourceIt™ Global Supplier Database are using certifications like CertiPur-US®, please contact a SafeSourcing customer services associate.

 

 

Organic Certification

Wednesday, June 29th, 2022

 

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

Are the organic foods you are buying certified? Do they need to be?

As many more small farms continue to evolve with specialized offerings that make it to our grocers’ shelves, it is more important than ever that your buyers make sure to check for the proper certifications as they expand their sourced locally initiatives.

An Organic Certification is given by National Organic Program (NOP) which is a USDA accredited agent. Each of these certifying agents is authorized to issue an Organic Certificate to operations that comply with the USDA organic regulations. The NOP is a regulatory program housed within the USDA Agricultural Marketing Service. They are responsible for developing national standards for organically produced agricultural products. The standards assure consumers that products with the USDA organic seal meet consistent, uniform standards.

If you’d like to learn more about how SafeSourcing can assist in properly helping to ensure your suppliers are adhering to all organic or safe food standards, please contact a SafeSourcing customer services associate.

Leadership in Energy and Environmental Design (LEED)

Tuesday, June 28th, 2022

 

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

The recent pandemic and resulting supply chain impact has caused so many new retail format modifications, are you sure that your contractors are following LEED certification standards and principles.

The Leadership in Energy and Environmental Design (LEED) green building rating system is the nationally accepted benchmark for design, construction, and operation of high performance green buildings. LEED is an ecology-oriented building certification program run under the auspices of the U.S. green building Council (USGBC). LEED concentrates its efforts on improving performance across five key areas of environmental and human health: energy efficiency, indoor environmental quality, materials selection, sustainable site development, and water savings.

LEED has special rating systems that apply to all kinds of structures, including schools, retail and healthcare facilities. Rating systems are available for new construction and major renovations as well as existing buildings. The program is designed to inform and guide all kinds of professionals who work with structures to create or convert spaces to environmental sustainability, including architects, real estate professionals, facility managers, engineers, interior designers, landscape architects, construction managers, private sector executives and government officials.

On its Web site, the USGBC says that LEED defines “a nationally accepted benchmark for the design, construction and operation of high-performance Green Buildings” and “provides building owners and operators with the tools they need to have an immediate and measurable impact on their buildings’ performance.” According to the American Institute of Architects, the 69 LEED points that make up the program’s specific design points and considerations can be reviewed in a two-hour meeting, during which time the design team and the owner can decide what level of LEED compliance is desirable for their building project.

State and local governments around the United States are adopting LEED for public buildings of all kinds, and LEED initiatives at the US Departments of Agriculture, Defense, Energy and State drive activity at the federal level. In addition, various types of LEED projects are currently underway in over forty other countries, including Canada, Brazil, India, and Mexico.

If you’d like to learn more about how SafeSourcing can assist in properly helping to insure your contractors are adhering to all LEED standards,  please contact a SafeSourcing customer services associate.

Source: https://www.techtarget.com/searchdatacenter/definition/LEED-Leadership-in-Energy-and-Environmental-Design

 

The Interest Rates Will Increase Until Morale Improves

Friday, June 17th, 2022

 

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

Lock in your mortgage rates everyone because the gravy train has officially ended. The Fed has announced the biggest increase in interest rates since 1994 in an all-out effort to reduce inflation. So now, we can all expect to see the usual activity during times of increased interest rates. Fewer auto loans, lower mortgage limits, higher credit card rates, and among the consumer commodities hits come more difficult aspects such as lower hiring rates as spending slows down.

This long-term strategy is sound economic theory, but not one without its struggles. Since business growth will be reduced because of reduced consumer spending, the focus now shifts from revenue growth to spend reduction to weather the storm. Long term contracts at a competitive rate are now far more valuable than jumping from short term contract to short term contract seeking out world-beating prices. Fortunately, the Fed only seems interested in increasing the rates as little as possible to mitigate the subsequent unemployment as it recognizes the worse of two evils. Unfortunately, that does mean incremental rate increases for the foreseeable future. So, lock in your contracts yesterday, everyone, it is going to be a bumpy ride.

To help secure your next contract, please contact a SafeSourcing Customer Service Representative.

 

 

 

Shrinkflation?

Wednesday, June 15th, 2022

 

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

In a recent post titled “How are you dealing with your overstock issues” Where I discussed using eprocuremnt tools to help reduce retail shrink. Then today I opened the paper and there it was Shrinkflation. Which is the Reduction in the size or weight of retail products, especially items of packaged food, with no corresponding reduction in the retail price. This improves financial results for the company with the expense born by the consumer who end up getting less for more.

In economics, shrinkflation is the practice of reducing the size or quantity of a product while the price of the product remains the same or slightly increases. In some cases, the term may indicate lowering the quality of a product or its ingredients while the price remains the same.

When I was studying Psychology in college out professor brought up the term Just Noticeable Difference or (JND). He asked us if anyone though that candy bars were getting smaller year over year. We all know the answer to that question, particularly if you ever trick or treated or now take your kids trick or treating. Those darn candy bars keep shrinking. So just what is a Just Noticeable Difference

According to Helensinblog on WordPress, Just Noticeable Difference, also known as the difference threshold, is the minimum level of stimulation that a person can detect 50-percent of the time.

For our senses, there is a measure called an absolute threshold. The absolute threshold shows that we can hardly see the difference in stimulus and are able to perceive its ability, and the difference threshold is that we cannot notice the difference, better known as the” Just-noticeable difference” (JND). For example, if you hold a bag of 100 pounds of oranges, plus a pound will not be noticed. But if you hold 5 pounds, then you add a pound, you will notice.

SafeSourcing is an eprocurement company that operates across multiple industries. As such we have specific experience in helping our customers source their products through a variety of tools. One of those is our SafeSourceIt™ Templates Library. Here we house thousands of specifications that have evolved over the years as products have changed. Having the proper specification is key to sourcing the correct products at both the manufacturing and the retail level. Take care of your customers the way they deserve to be. Don’t sell them less for more, they are already hurting enough.

To learn more, please contact a SafeSourcing customer services associate.

References: shrinkflation meaning – Search (bing.com)

Just-noticeable difference (JND) – Consumer Behaviour (wordpress.com)

Does your company have a Buying Committee?

Thursday, June 9th, 2022

 

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

SafeSourcing has found that many companies achieve improved results by having additional eyes available to review complex categories before final contract award. Often, SafeSourcing is asked to be a part of these committees as we are generally very deeply involved in the data and meta data. Additionally, many companies only source service type categories annually while SafeSourcing may host these categories dozens of times in a single year and be more aware of nuances that can improve final negotiation.

A buying committee is an organization’s committee that analyzes and selects new products, deals, and offers special promotions. The buying committee has been implemented in many industrial organizations, hospitals, and government. The salesperson must provide information to all the members of the buying committee and should target the real sales efforts.

SafeSourcing is an eprocurement company that operates across multiple industries. As such we have specific experience in almost any commodity, service or capital related spend. To learn more, please contact a SafeSourcing customer services associate.

Importers Self-Assessment Program (ISA)

Thursday, June 9th, 2022

 

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

ISA is a voluntary approach to trade compliance that originated from the passage of the Customs Modernization Act (Customs Mod Act) in 1993 as it ushered in an era of new partnership concepts between the importing community and the United States Customs Service (Customs and Border Protection – CBP). The program provides the opportunity for importers who have made a commitment of resources to assume responsibility for monitoring their own compliance in exchange for benefits. The ISA program offers benefits that can be tailored to industry needs and requires that importers demonstrate readiness to assume responsibilities for managing and monitoring their own compliance through self-assessment.

Purpose:

The ISA program is built on the knowledge, trust, and willingness to maintain an ongoing Customs and Border Protection (CBP)/importer relationship that is mutually beneficial to both parties. CBP’s goal is to partner with importers who can demonstrate their readiness to assume the responsibility to manage and monitor their compliance through self-assessment. Importers who are accepted into the ISA program receive tangible benefits, while allowing CBP to re-direct valuable resources to focus on high-risk and unknown importers.

Background:

The passage of the Customs Modernization Act (Customs Mod Act) in 1993 ushered in an era of new partnership concepts between the importing community and the United States Customs Service (Customs and Border Protection – CBP). Under the Mod Act, CBP and the importer share the responsibility for compliance with trade laws and regulations. The importer is responsible for using reasonable care when declaring the value, classification, rate of duty applicable to entered merchandise, and CBP is responsible for informing the importer of its rights and responsibilities under the law.

Program Overview:

The ISA program is a voluntary approach to trade compliance. It is built on knowledge, trust, and a willingness to maintain an ongoing CBP/importer relationship. The ISA program offers meaningful benefits that can be tailored to industry needs and requires that importers demonstrate readiness to assume responsibilities for managing and monitoring their own compliance through self-assessment.

SafeSourcing is an eprocurement company that operates across multiple industries. As such we have specific experience in helping our customers in all aspects of sourcing, please contact a SafeSourcing customer services associate.

References: http://www.cbp.gov/linkhandler/cgov/trade/trade_programs/importer_self_assessment/isa_hb.ctt/isa_hb.pdf 

 

How are you dealing with your overstock issues?

Wednesday, June 8th, 2022

 

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

What you do with your overstock can decrease shrink and improve margins.

Many retailers loaded up their back rooms and warehouses with product due to the pandemic and inflation induced supply chain issues. Now the overstock inventory is causing a problem to current financials.

The term overstock refers to products that have been over ordered.  It is the responsibility of the buyer along with the warehouse inventory management team to manage this type of overage. Overstock or excess stock would result in additional operating capital.  Additional operating capital would create a huge impact on profitability due to the need for more storage space, which leads to higher overhead.

Online forward auctions are an ideal way to get the best price for capital equipment, materials, overstock, and services you may want to sell, such as when you need to liquidate excess inventory.

There are two basic types of forward auctions. The first is a liquidation auction where sellers are reducing inventory from overstock or liquidation and buyers are seeking to obtain the lowest price for items, they have an interest in for resale and other purposes. The second type is more of a marketing auction where sellers are trying to sell unique items and buyers wish to obtain unique items. This is typical of an eBay type of offering.

Much of retail shrink happens in the back room or receiving area of retail stores. It just so happens that this is also the location of much of the overstock in the retail community. Much of this product sits there month after month resulting in significant margin hits to quarterly and annual earnings and as such to a company’s stock price. Due to recent supply chain issues, it is now also an issue at Warehouses and Distribution Centers.

SafeSourcing is an eprocurement company that operates across multiple industries. As such we have specific experience in helping our customers reduce shrink through the forward auction process. To learn more, please contact a SafeSourcing customer services associate.

 

 

Horizontal Mergers and Such!

Tuesday, June 7th, 2022

 

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

So now what do you do? You have been acquired or acquired a similar business.

A horizontal merger is a business consolidation that occurs between firms who operate in the same space, often as competitors offering the same good or service. Horizontal mergers are common in industries with fewer firms as competition tends to be higher and the synergies and potential gains in market share are much greater for merging firms in such an industry.

This type of merger occurs frequently because of larger companies attempting to create more efficient economies of scale. The amalgamation of Daimler-Benz and Chrysler is a popular example of a horizontal merger.

Conversely, a vertical merger takes place when firms from different parts of the supply chain consolidate in order to make the production process more efficient or cost effective.

SafeSourcing is an eprocurement company that operates across multiple industries. As such we have specific experience in collaborative sourcing which is often needed during these times. Through the use of our SafeSourceIt™ Template library, SafeSourceIt™ Supplier Database and our SafeSourceIt™  eprocurement platform we can often aid in consolidation that ensures the lowest price available in the market today,

If you are involved in any type of merger, and would like assistance in consolidating your spends, please contact a SafeSourcing customer services associate.

 

 

 

How are you keeping costs and expenses down this year?

Friday, June 3rd, 2022

 

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

The role of all for profit businesses is to make a profit. In a perfect world, you will increase sales, reduce cost of goods, improve gross margin, and reduce expenses. Since we do not have a perfect world ever, you will ask your finance team to make up a bunch of excuses based on a variety of global conidiations such as inflation, recession, war, supply chain issues, goodwill, weather, and anything else that will cause analysist to not devalue your shareholder value after missing your quarterly or annual plan numbers. Tell me I am lying! I am already laughing.

The question I have is what questions have you been asking of your finance and procurement teams during the year? Do you just believe what they are telling you? If so, I might have a bridge that be be resold in Brooklyn if you are interested.

Here is the thing, I agree that we have issues. However, that does not mean that there is not money to be saved and a lot of it. The trick is to understand the markets and commodities well enough to source what you can save money on while also trying to mitigate cost increases where there are factual issues.

There are categories whose prices are down year over year 2021 vs 2022. An example might be mobile phone technology, audio technology and even TV’s. I know all these items are used in retail stores. So, are you taking advantage of these items in your technology budget or just believing that chips are hard to get so technology is not a good category to source? If you are opening new stores or upgrading existing stores, I would suggest you take a serious look. In your cost of goods area there are improvements in some produce subcategories and protein subcategories. Do not just believe your supplier of your procurement team. If your pricing has gone up 8% on commodities, have you just accepted it or have you challenged it and kept increases to a minimum.

At SafeSourcing we stay abreast of all areas of impact in the cost of all categories. We understand global and regional issues as well as where there may be alternatives sources of supply. Here’s a couple of examples.

  • Bottled Water 30.7% below current cost.
  • Print Fulfillment 36.04% below current cost
  • Construction Windows and Doors 13.84% below current cost
  • Refrigeration 22.61% below current cost
  • Many more examples upon request

If you lack specific detailed product and commodity knowledge or only source certain categories less than annually, and would like to understand current market drivers, please contact a SafeSourcing customer services associate.