Archive for July, 2022

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Many Oil Company downstream customers are making a fortune.

Friday, July 29th, 2022

 

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

So, what happens when the price of oil goes back down, and the price of gas and diesel drop? What if you were not too careful about monitoring your current cost of goods and expense categories. I have no doubt all of your wholesale suppliers have told you that they have supply chain issues. It does not matter whether they really do or not, that is the excuse for raising your prices. So now you have to raise prices to your customer, and they are already hurting. I doubt there is a wholesaler with whom you do business that has not added to their uplift fees over the last two years. You know that percentage they add that covers the cost of their operations that are focused on you. I might have been 8% and is now 10% or even higher. It is easy to absorb when you are making money hand over fist on fuel sales.

Here is the thing, when the fuel benefit goes away and I will, your supplier costs will not drop, you will then have to resource every category you have like store supplies, cleaning services, lawncare and snow removal and all for resale products in order to claw back anything in the name of reduction of cost of goods costs and resulting gross margin improvement or expense items and net profit.

There are great companies out there that are doing both. It is not their fault that they are benefiting from fuel sales, but they still have a business to run, and they are doing it. Here are some things they have sourced this year at much lower costs than you might think possible.

  1. Lawncare
  2. Firewood
  3. Cleaning Services
  4. Bottled Water
  5. Waste Removal
  6. Construction Materials
  7. Rental Equipment
  8. Ice Programs
  9. Coffee
  10. Beer Caves
  11. Doors and Windows
  12. Facia
  13. Lighting
  14. Floor Tiles
  15. Ceiling Tile
  16. Many Proteins related Commodities

It is great when you are making a lot of money and can take your eyes off managing all of your profit centers, but the above examples are making smart companies improve margins and expense and they will continue to win, when things return to normal.

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. Our SafeSourceIt™ Global Supplier Database has over 500,000 suppliers that can reduce your costs today. You are probably paying too much for about everything. To learn more, please contact a SafeSourcing customer services associate.

 

 

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Brand/Current name or equal specification

Thursday, July 28th, 2022

 

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

Do manufacturers deliberately make it difficult for you to source comparable products?

They really try to. It is like our comes in a seventeen-ounce bottle and fits better on your shelving than their twenty-ounce bottle. How many examples can you come up with? The fact is if you do not understand how to use Brand name or equal in your sourcing, Current, or equal and have the right responses for vendor participants, you will always pay more for your products. Please read on to understand the subtle difference in a Brand/Current Name or equal specification.

Brand name or equal specification is a specification that uses one or more manufacturer’s brand names or catalog numbers to describe the standards of quality, performance and other characteristics needed to meet the requirements of a solicitation and provide for the submission of equivalent products.  In addition, a brand name or equal specification could often obtain a competitive edge by basing a bid on an equal product which is less expensive than the brand-named product specified.

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. Our SafeSourceIt™ Global Supplier Database has over 500,000 suppliers that make Brand/Current or equal sourcing easy to accomplish. You are probably paying too much for about everything. To learn more, please contact a SafeSourcing customer services associate.

 

 

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Managing Change While Managing Costs

Wednesday, July 27th, 2022

 

 

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

For our customers, we are primarily focused on delivering cost savings. Generally, in eProcurement, we aim to provide an apples-to-apples comparison so that our customers can make an award decision relatively easily based on the results of an online RFx Event. We do that very well and average over 24% savings. Sometimes, however, our customer is looking to reduce their category costs while also making changes to what it is that they are purchasing.

The good news is that the goals of reducing costs and making a change are not mutually exclusive. While every situation will be different, here is how one customer of ours recently accomplished both goals. The customer, a retailer, knew that they would be phasing out certain plastic products that use regularly. They have a significant annual spend in this category currently. Their goal was to discontinue the use of plastic and switch to alternative products that are more environmentally friendly including biodegradable and reusable options. Because they had carefully planned this change, we were able to develop a plan to work together to manage the change effectively while still taking full advantage of eProcurement tools to reduce costs along the way. Below is a quick summary of how we did this.

  1. Reduce the cost of the current plastic products using a live Request for Quote (RFQ)so they are not overpaying for the remainder of their orders. This generated a substantial savings.
  2. Develop a Request for Proposal (RFP)to attain a better understanding of the specifications, capabilities, and pricing for the alternative products.
  3. Review the RFP results and establish the specifications for the alternative products that would ultimately replace the plastic products.
  4. Host an RFQ to compress the pricing for the alternative products
  5. Test samples for the alternatives, make a decision, and coordinate the roll out of the new products to coincide with the timeline of phasing out the plastic products.

The most important part of this process was the planning. SafeSourcing and the customer coordinated the process and took the steps above in accordance with that plan. In contrast, when we see customers attempt to manage change through the eProcurement process without a plan, we tend to see results that are less impressive. They will likely have savings, and they will likely make a change, but they will not strike the ideal balance between the two.

If you’re interested in learning more about our contract management tool or any of our full suite of Procure to Pay tools,  please contact SafeSourcing

 

 

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Order/Demand Capture

Tuesday, July 26th, 2022

 

 

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

 What type of systems do your vendors and suppliers have in place in order to manage your specific contract utilization and demand once you have awarded them your business. Many large manufacturers may have the capability but what about regional and local suppliers, particularly in the mid markets. Maybe you should ask so you are not caught short. Read on to understand the questions to ask.

The order/demand capture systems obtain information about a specific customer order as it happens. The software aggregates and evaluates customer orders and calculates how much of what product should be made in the future.  There, the information received by these systems would be critical in order to improve the forecasting accuracy, fill rates, and customer satisfaction. If the amount of lost demand is significant, a company would become continuously out of stock of highly requested items, as purchases will never be forecasted to true demand.

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. Our SafeSourceIt™ Global Supplier Database  requires our suppliers to adhere to multiple certifications and are vetted for the tools they use to support your buying habits. To learn more, please contact a SafeSourcing customer services associate.

 

 

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How do you control Maverick Buying?

Monday, July 25th, 2022

 

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

That is a two-sided question, isn’t it? When a product or service is under contract, and someone is then assigned the issuing of P.O.’s or ordering from a contract, they are not the buyer? And what if other parts of your company do not come to that person when they run out of something? Let us say it is as simple as copy paper. How do you are Work from Home associates restock when they run out? This is a pretty simple issue to address, however, most do not, and all of your negotiations buy an actual buyer, not user are wasted.

Maverick buying refers to any company or employee purchase that does not meet a company’s purchasing policy. This includes using off-contract methods of procurement and non-authorized purchases. Also called Rogue Purchasing, Maverick buying, for example, is when employees buy office articles at the local store around the corner instead of from the supplier with whom the company has negotiated a framework agreement and, therefore, specific discounts. Maverick buying makes the agreement with the supplier more expensive because the volume of the framework agreement is decreased or the goods are purchased at too high a price.

SafeSourcing is an eprocurement company that operates across multiple industries. We endeavor to act as an additional source of industry information on our website with our SafeSourcing white papers, daily blogs, SafeSourcing Wiki. We also monitor daily Industry Updates and Alerts as well as audit and offer vetted procedures to ensure contract compliance and utilization. To learn more, please contact a SafeSourcing customer services associate.

 

 

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Travel Industry Forecast

Friday, July 22nd, 2022

 

Today’s post is by Patrick Quinn Sourcing Specialist at SafeSourcing Inc.

Despite the bleak economic forecasts blared in your face week after week, the world must keep turning. Though many industries might be seeing slowdowns, others are weathering the storm, and even seeing record growth.

Naturally, the travel industry has nowhere to go but up from its effective suspension in 2020 and travel related businesses have been making strides back to expected activity. According to polls, by the end of 2022, nearly two-thirds of Americans will have taken a trip for leisure, and 38% of those trips will be an international trip. The future looks even stronger, as half of Americans intend to take an international trip by the end of 2023 as well. In fact, a quality vacation is a priority over even new vehicles and home improvement projects!

SafeSourcing is an eProcurement offering a full suite of procurement tools. We strive to provide up to date information across multiple industries, and offer the tools to assist your business such as our SafeSourcing Wiki, and SafeSourceIt Global Suppliers Database. To learn more, please contact a SafeSourcing Customer Service Representative.

 

 

 

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Prime Day Sale

Thursday, July 21st, 2022

 

 

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

Amazon has been the powerhouse company for many different fields for the ten years and more with reaches into e-commerce, technology, digital streaming, artificial intelligence, and more. Recently Amazon launched its annual Prime day, where a significant amount of goods, services, and subscriptions are offered at small to large, discounted rates, but only for a short amount of time. It has been estimated that the most recent Prime Day brought in over $10b in e-commerce sales in just a short amount of time.

While perusing the vast Amazon site, exploring the deals that might be of the greatest use and value, I found that some items were discounted significantly (50-75% off normal prices!) but with price expiration of only 15 minutes. This instinctively triggered the urge to buy now before time expired, but reason kicked in and found that I, and likely many others, was acting exactly as planned by this sale for Prime day. The hope is that buyers will opt to buy now so the sale price is not lost, but this leads to zero time to think about the practicality of the purchase.

This use of psychological tactics in sales in nothing new. We often see the gimmick in our mail, with bold print and deadlines and exclusives to reassure the buyer that their product is the best value for buyers’ money. Another time your see this kind of marketing is during Black Friday Sales after Thanksgiving. Retailers use the holidays as a prime time to push their products using the same one day only sale to get people to buy before the sale ends, pushing the demand higher.

This kind of demand is seen in other industries as well. When the buyer gets to be the one setting the timer on sales, the sellers then complete for their business. This is something that benefits both buyer and seller and finding the right platform is easier than one might think. A procurement partner, like SafeSourcing, can be the expert guiding your company through finding the right suppliers and the right goods for your company’s needs, and having them put in the effort and earn your business while filling all the needs of everyone.

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

http://safesourcing.com/ContactUs/tabid/60/language/en-US/Default.aspx

 

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Business to Business Associates are finding it hard to connect via phone calls!?

Tuesday, July 19th, 2022

 

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

Recently I was listening to some news on the television and heard a report that said Gen Z and Millennial office workers want to ban phone calls because they are too aggressive and confrontational.  After doing some research I found that there was a study done and that instead of phone calls 75 percent of office workers surveyed say they would prefer to use email or social media to communicate.  The one statistic from the survey that concerned me the most was that over 75 percent of the people admitted to frequently ignoring incoming phone calls if they did not recognize who was calling because they were afraid that it could be a confrontational conversation.  This I could understand when it comes to your personal phone but not your office phone.  So according to these statistics you may have about a 25 percent chance of getting ahold of someone when making calls to businesses whose employees are primarily under the age of forty.  I will admit some things can be taken care of by text or email, but this is usually only simple questions that do not have a lot of follow up questions.  In my opinion to be successful you need to be able to communicate to potential customers and business partners by phone and in person to ensure that everyone is on the same page.  Oh, and by the way the study also stated about ten percent of the people surveyed admitted that they will go out of their way to avoid face to face contact.

Interested in learning how SafeSourcing can help your company save money during these challenging times?  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.

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Food Industry Report

Thursday, July 14th, 2022

 

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

How does your company keep abreast of the ever-changing industry landscape in our food industry? What are commodities doing, what are current supply issues and other trending information.

The Food Industry Report is a weekly report on food industry events relevant to producers. The Food Industry Report is written by The Food Institute, which is a nonprofit organization founded in 1928, The American Institute of Food Distribution’s (The Food Institute) purpose is providing information to better equip the food production industry and it’s practices. Below are three articles of interest from this week.

  1. Amazon’s Grubhub+ Offering Signals New Approach to Loyalty
  2. High Food Prices Could Persist for Three More Years
  3. Locavorism’ Trend Gaining Steam Despite Misconceptions

SafeSourcing is an eprocurement company that operates across multiple industries. We endeavor to act as an additional source of industry information on our website with our SafeSourcing white papers, daily blogs, SafeSourcing Wiki. We also monitor daily Industry Updates and Alerts To learn more, please contact a SafeSourcing customer services associate.

Sources: The Food Institute

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Low-Cost Country Sourcing

Wednesday, July 13th, 2022

 

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

Is there still such a thing as low-cost country sourcing? Let us hope the last couple of years is not the best example of how this is supposed to work. If so, you will have to not rely so heavily on sole source opportunities.

Low-Cost Country sourcing (LCCS) is a procurement strategy in which a company uses foreign companies with lower wages to produce resources for manufacturing. By finding companies countries with lower labor and production costs that operate on leaner budgets than domestic operations, a company may be able to acquire materials and reduce operational expenses. Low-cost country sourcing is a part of a company’s global sourcing strategy. It is also called outsourcing or international procurement organization (IPO).

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. Our SafeSourceIt™ Global Supplier Database of over 457,000 suppliers is your source for all EU, Pacific Rim and Americas supplier information. To learn more or have SafeSourcing assist you in your low-cost sourcing, please contact a SafeSourcing customer services associate.

Source: http://www.businessdictionary.com/definition/low-cost-country-sourcing-LCCS.html#ixzz2BIrG7ujm

 

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