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Trains, Planes and Trucks oh my!

Tuesday, April 9th, 2013

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

Oh well I tried, my title is almost like the title of the movie of a similar title, but in our case automobiles don’t provide much help. The question however is a good one and unfortunately many companies are not exploring what may be the least expensive alternative today. And that would be (Your guess was wrong) TRAINS. Surprised?

Companies that are looking to optimize their shipping lanes or even their entire logistics structure face significant hurdles.  Selecting the correct business partner  or partners is a huge challenge,   as vetting them includes so many different items that can include items like Track & Trace capability, shipment visibility, driver turnover, certifications, fuel surcharges and much much more. But don’t forget to take a hard look at Trains.

The price of shipping your freight by rail is relatively inexpensive and the volume of freight being shipped this way is projected to grow by half to $27.5B by 2040 according to an article in the March 27th issue of the Wall Street Journal titled Boom Times on the Tracks: Rail Capacity, Spending Soar.

This may be a surprise to many as most procurement professional tend to think of rail as old school. Well, while you may have been looking the other way, technology has been upgraded, infrastructure has been upgraded and total tonnage has increased across a broad number of categories.

Who are the major players in this space?  The names may be familiar. Union Pacific, BNSF, CSX, Norfolk Southern and Kansas City Southern to name a few.

If you like to learn more about how to optimize your shipping needs, please contact a Safesourcing customer services account manager.

We look forward to and appreciate your comments.

 

Posted in B2b Supply Chain, Supply Chain Procurement

Measuring Your Vendor Key Performance Indicators!

Monday, April 8th, 2013

Today’s post is by Mark Davis; Sr. Vice President and COO at SafeSourcing Inc.

Very few of the suppliers you do business with are hired to perform a service that is nothing more than a convenience with no ROI or process improvement attached to them.  Unfortunately many of those suppliers do not provide their customers with an accurate way of measuring just how good of a job they are doing for them.  By not providing that picture they are actually setting themselves up to have to compete with other vendors for business they already have down the road.

In today’s blog we will be looking at some of the Key Performance Indicators (KPIs) you should be asking your vendors to supply with on at least a quarterly basis if not a monthly or weekly basis should the need demand it.

Issue resolution – Every company and their suppliers eventually run into issues in the course of doing business.   Delivery issues, quality issues, supply issues, service issues are all areas that come up how your suppliers support you during these times is a good indicator of how much they value your business.  Most procurement departments have their own supplier scorecards for this KPI but asking your suppliers to provide them for you as well is a nice way to see if their tracking of your issues matches your methods.

Delivery Performance – Delivery performance is one of the most important KPIs that can be tracked.   Having or not having the products you need is even more important than the cost of that item because if you don’t have the services and products you need to provide your customers what they need, you lose those customers and getting them back may never be an option.  Measuring the length of time from order to delivery all throughout the year will tell you a lot about the suppliers you do business with as does tracking instances were RUSH orders were required and how those suppliers were able to accommodate your special needs.

Process savings – Process savings can be tricky because often they are associated with “soft expenses,” that is expenses that you would have had pay but your suppliers, through some benefit of their service, were able to accomplish for you.  Process savings are important to many suppliers and you should hold them accountable for reporting how they are doing for you on a regular basis especially if their cost improvements are not quite as obvious.  Time saved for your employees due to activities they handle for you, software tools that make your employees more efficient, or consolidated efforts that create central points of communication are things that provide savings to your company and should be prepared by your suppliers and vendors.

Cost Improvements – Many suppliers do a great job of partnering with companies to make sure they are purchasing the products and services they need.  Reducing cost due to analysis of the business is part of of what many suppliers offer.  They will review your business today and make sure you aren’t purchasing items or services that are more than what you need, recommending alternatives that instantly create cost savings.  Improvements, in material, logistics, processes and product sources are all important pieces of this process and should be reported by your suppliers on a frequent basis so that you have a centrally visible point to monitor their effectiveness for your company.

For more information about how we can help you develop KPIs to request from your vendors, 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.

Posted in B2b Supply Chain

The Geographical Significance of Vendor Selection

Monday, March 25th, 2013

Today’s post is by Mark Davis; Sr. Vice President and COO at SafeSourcing

Many National companies are faced with the dilemma of trying to control the sourcing of products and services across their company in a way that consolidates what they purchase and helps them control who they are working with.   Many times our customers will tell us that they are only interested in speaking with companies who can handle their entire company; only National providers will be considered.  The SafeSourcing recommendation frequently will be to expand that vision in order to create an opportunity for greater overall value, and possibly better savings.

Today we will be looking at the advantages of each of the three geographical levels that companies can employ when setting up their projects and why a good mix of all three can create greater opportunities for success for your company.

National suppliers – There are some obvious advantages for selecting National providers to be involved with sourcing projects.  As you grow they will have the infrastructure in place to support you and your business.  In many cases they have a support system and reporting system that can assist you with tracking what you are spending and where those products and services are being delivered to.  National suppliers have the size to be able to reduce the overall costs of the items you purchase but they also have the overhead and internal expenses that it takes to maintain a National company.   National companies tend to have larger market share and recognition so their aggressiveness in competing for your business may not always be in line with that of the regional and local suppliers who are looking for any way to get some of your business.

Regional suppliers – Regional suppliers tend to cover 20 to 40% of the country and focus on a specific area such as the Northeast, Southeast, West Coast, etc.  The advantages of the regional supplier are that they are large enough to be aggressive in price and to offer great value-add services but they are focused enough to know the area they are servicing.  Regional suppliers have typically mastered the logistics of their shipping lanes and many times know the culture and the people in the area better than a National supplier does.  While having multiple suppliers loses some of the advantages of having a National program, the services and prices may indicate a 2 or 3 supplier award makes the most sense for the company.

Local suppliers – Local suppliers who handle either a city or an entire state, are typically brought into a procurement event for one of two reasons.   They either are an incumbent of one the locations currently or they are being reviewed for a rural area that is not supported well by a national or regional supplier.  Local suppliers have the flexibility to be aggressive in pricing (especially for services) and they can usually support rural areas better than larger companies.  Having local companies involved gives incumbents a chance to fight for the business they have previously had and possibly win new business and it provides great options for locations that need special attention.   Local suppliers will also ensure that the regional and national suppliers are staying competitive in the service levels, terms and pricing they are offering you across the company.

The mix of suppliers you invite to your sourcing projects are every bit as important as the history and specifications you supply those suppliers and developing a strategy of the right mix will be important to how successful your projects end up.  While you may intend on finding one National provider, the value offered may demand you consider a 2-3 company award at the end and having options at the local level for special situations and emergencies is something every company should have a contingency plan for.

For more information about how we can assist you with developing these supplier selection strategies, 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

Posted in B2b Supply Chain, Retail Supply Chain

Supplier selection! This may be the most important decision you make.

Wednesday, January 23rd, 2013

We sometimes want to blurt out a response that is number oriented because ours is the largest and most diverse retail supplier database. However we end up holding back in order to better understand the question that is really being asked. The discussion normally evolves along the line of quality and what data we have available in the database in order to make high quality supplier selections. Although reduction in cost may in fact be the ultimate goal, it in fact may not be the end point after the necessary due diligence required to pick the right supplier or suppliers.

Developing a plan that addresses the often conflicting objectives during your decision-making process and identifying the optimal list of suppliers requires significant amount of data in order to mitigate long term risk. Measuring your supply chain partners on cost only may cause you to miss many of the non-financial aspects that are so important such as:

1. Customer references 2. Product quality 3. Flexibility 4. Terms 5. Funds 6. Distribution 7. Responsiveness 8. Safety Focus 9. Eco Focus 10. Collaboration practices 11. Aggregated category opportunities 12. Experience

The risk of a new supplier performing poorly can negate any savings gained from direct product cost reductions. Driving sustainability in supplier improvement is one key to minimizing these potential risks within your company’s supplier base. Contact us at SafeSourcing if you like to explore expanding your view of the supplier universe

How your e-procurement partner addresses these questions is also key.

We look forward to and appreciate your comments.

 

Posted in B2b Supply Chain

Suppliers, what makes you different?

Thursday, January 3rd, 2013

Today’s post is by Mark Davis; Sr. Vice President of Operations and CTO at SafeSourcing.

One of the biggest Supply Chain topics for 2013, as it is every year, is the concern over rising costs and shrinking profits, and unfortunately this is the stigma attached to many eProcurement tools and practices.  We tell our customers and the suppliers who participate in our events it is about more than just price; it is about the overall value that is presented.

Today we will be looking at ways that suppliers can distinguish themselves from their competition in areas other than price.

Labeling and Packaging – Labeling and packaging are one of the big expenses in For Resale items for many retailers especially when it comes to Private Label goods.  Suppliers who are willing to work with their customers to develop packaging that will streamline the receiving and sales process can gain a big advantage over their competitors in a way they can leverage to great value.

Training & Professional Services – One of the easiest ways for suppliers to begin to separate themselves from the pack is in the area of professional services and training.  For the supplier these services can generate a value to their customers that far exceeds the actual cost of the service itself.  In this case it is a win-win situation where the customer gets valuable services while the supplier gets an opportunity to continue to build on the face-to-face relationship in a useful manner.

Guaranteed Service Level Agreement (SLA) Metrics – The bottom line in any Supplier-Customer relationship is not just price or “bells and whistles” it is about how well the supplier delivered what they promised, how they dealt with situations when they didn’t deliver as promised and what they are willing to risk if they fail to achieve on the Service Level they promised.  Getting the best price means nothing if the product or service is of low quality or is late.  The best suppliers OVER service their customers and are willing to stake a portion of their cost on their ability to achieve that level of service every time.  These guarantees may not always translate to your bottom-line in a positive way, but not having them in place and receiving poor quality will definitely impact it in a negative way.

For assistance on helping you work with your suppliers on the extra value they can offer you, please contact a SafeSourcing Customer Service Representative.

We look forward to your comments.

 

Posted in B2b Supply Chain, E-supply Chain, Retail Supply Chain, Supply Chain Procurement

Thanksgiving is really a story of a supply chain found and developed!

Thursday, November 22nd, 2012

One hundred and two pilgrims and crew arrived in Massachusetts after a 3,000 mile trip from England on the Mayflower. It is safe to say that as a result of that distance there was no existing supply chain to leverage, so one had to be developed and quickly. This began with basic hunting and gathering and later included trading with the areas indigenous peoples known as the Wampanoag’s for corn, seed and foraging and planting techniques.

The Thanksgiving holiday we celebrate today really stems from the feast held in the autumn of 1621. Since the pilgrims had only arrived on November 21st of 1620 they had really not been there long enough to develop a fully reliable and renewable supply source. They had however established collaborative relationships with the local Wampanoag people who became regular trading partners and who helped them celebrate the colony’s first successful harvest.

The most detailed description of the “First Thanksgiving” comes from Edward Winslow from A Journal of the Pilgrims at Plymouth, in 1621:”Our harvest  being gotten in, our governor sent four men on fowling, that so we might after a special manner rejoice together after we had gathered the fruit of our labors.

The fowl referred to above certainly could have included a wide range of fowl that was plentiful in the area such as wild turkey, pheasant, goose, duck, and partridge and unfortunately by today’s standards even eagles.

The pilgrims probably didn’t have pies or much of anything sweet at the harvest feast because they did not yet have ovens. They had brought some sugar with them on the Mayflower but by the time of the first Thanksgiving, the supply had probably run out.

Their meals also included many different types of meats. Vegetable dishes, one of the staples of today’s Thanksgiving, didn’t really play a large part in the feast. Other items that may have been on the menu certainly included sea food such as clams and lobster, Indian corn, wild fruits and nuts, meats such as venison and seal and certain dry herbs and spices.

The Thanksgiving meal that has today become a national holiday is a symbol of supply chain cooperation and interaction between English colonists and Native Americans.

We look forward to and appreciate your comments.

Happy Thanksgiving.

Posted in B2b Supply Chain, Supply Chain Procurement

The pilgrims also ate a lot of seafood during their Thanksgiving festival.

Thursday, November 22nd, 2012

I was watching television report lat night about the safety of gulf seafood as a result of the BP oil spill from last year. Don’t worry, most of our seafood comes from elsewhere.

Do you ever wonder where the sea and lake food that you eat comes from and whether or not it is safe to eat? Are the seafood buyers at your local grocery or restaurant concerned for you?

Almost three years ago during my first post I promised that The SafeSourcing Blog would call attention to and comment on safety concerns within the global supply chain that may impact your customers, employees, families and other stake holders. I’m sure like me; many of you have been impacted by safety inconsistencies in our supply chain. Personally I have had issues like this impact me, members of my family and my pets.

I recently was watching a little snippet from YouTube attributed to ABC News about the origin and quality or lack there of regarding seafood we consume. As a kid growing up on the east coast near Cape Cod I kind of always assumed that all fish was fresh fish from our Atlantic, Pacific and Gulf waters. Well today, more than 80% of our seafood comes from foreign countries such as Thailand, Indonesia, China and Costa Rica to name a few. Of this, only 1% is tested by the FDA and most of it fails inspection because it includes chemicals, poisons, antibiotics and other additives and is even in some cases farmed in unsanitary conditions. The primary reason for the import to locally fished discrepancy is as you might suspect; price.

This author would hope that all seafood and lake food buyers for our restaurant and grocery chains would ask their suppliers a few of simple questions.
 
1. Where is the seafood you are selling us coming from?
2. Where will the incoming shipments be tested before you deliver it to us?
3. Is it safe for our consumers to eat this fish?

If the answer is not to your liking and documented, don’t buy it. Your consumers will thank you.

We look forward to and appreciate your comments.

Posted in B2b Supply Chain, Sourcing Safe Foods, Supply Chain Procurement

Let’s play supplier poker!

Friday, October 26th, 2012

If this were a real poker game, I’d raise our big supplier data versus your existing supplier data.

Locating, managing and updating supplier information that companies choose to do business with has never been more difficult. How many companies that you used to do business with 4-5 years ago are no longer in business? How many new companies have taken their place? I already know the answer you are going to give me. It’s I don’t know.

We keep hearing about big data. With new regulatory requirements emerging daily, economies failing, the supply chain shrinking in some places and expanding in others,  changing  safety factors and  environmental factors ( think LEEDS), detailed supplier information and traceability are but a few of the issues that require regular maintenance in order to mitigate a company’s risk.

Solution Providers like SafeSourcing that provide supplier databases (SafeSourceIt™) that are part of automating the procurement process, need to step up and make sure that their data support these changes on a regular basis to the greatest extent possible by providing tools that interacts with both regulatory agencies and suppliers to insure consumer safety and environmental impact as more new sources of supply and new products enter the supply chain on a daily basis.

Actions that solution providers can take should include but are not limited to:

1. Monitor daily alert data as to product recalls and safety warnings.
2. Trace warnings back to the original source of supply automatically and maintain history.
3. Require that suppliers meet certain safety certifications in order to participate in their database.
4. Require that suppliers meet required environmental certifications or programs in order to participate in their database
5. Provide a regular purge of suppliers that do not comply with necessary standards.
6. Validate the entire database regularly for companies no longer in business
7. Adhere to a strict RFI process for new suppliers requesting participation in their database.
8. Provide a rating system for suppliers that are offered to companies as new sources of supply.
9. Monitor regulatory agencies such as ISO for new standards and include them as further requirements in supplier databases.
10.Conduct on going category research for evolving sources of supply.
11.Compare your best customers GL to your database for additions deletions.

Ask your solution provider what their process is to grow manage and maintain their supplier database for your benefit.

If you’d like more information on the SafeSourceIt™ Supplier Database of over 427,000 cleansed global sources of supply, please contact a SafeSourcing customer services account manager.

We look forward to and appreciate your comments.

Posted in B2b Supply Chain, Supply Chain Procurement

Are you keeping track of all of the new supplier invitees from your e-RFX initiatives?

Wednesday, October 10th, 2012

So how would you go about keeping track of these suppliers, or finding new ones if you had to?

Do you have to be a student of the database industry to understand what may be available to you without having to do a lot of work? At the end of the day a database is just a list albeit a sophisticated list with lots of tables and joins and other database features that allow for the combination and use of data.

As an example, when looking to build a retail supplier database there is certain information you require in order for the data to be believable. UDDI (Yu-di) is an open industry initiative, sponsored by the Organization for the Advancement of Structured Information Standards (OASIS), enabling businesses to publish service listings and discover each other and define how the services or software applications interact over the Internet. These service listings can take a number of different forms such as business registrations, for UDDI they are in the following formats.

  1. White Pages — address, contact, and known identifiers;
  2. Yellow Pages — industrial categorizations based on standard taxonomies;
  3. Green Pages — technical information about services exposed by the business.

Combining these data which is readily available from a variety of sources provides a great start. From there the challenge to add other attributes that are important to you such as certifications, sic codes, detailed company descriptions, sales figures, products carried, experience, ratings etc.

This author has always believed that reinventing the wheel is a misguided way to accomplish development initiatives and with all of the open source available on the market today and the cost of IT talent as high as it is we have to explore these alternatives to core development if time to market is a critical success factor.

So there you have it, my thinking and process for building our database. The next question is how we keep it fresh an updated. And that my friends are a trade secret.

So, unless you feel you have the time, energy or resources to do something similar, why not reach out to SafeSourcing and let us provide you access to our SafeSourceIt™ Database or find suppliers for you that may be right in your own back yard and you don’t even know about..

We look forward to and appreciate your comments.

Posted in B2b Supply Chain, Supply Chain Procurement

What is a collaborative supply chain?

Friday, September 28th, 2012

The fact is that internal collaboration is not happening in many companies and neither is collaborative aggregation.

We often hear the term collaboration or collaborative partners, collaborative supply chains, collaborative commerce or collaborative networks when we are discussing the supply chain. It rolls of everyone’s tongue like we all know what we are talking about. So this author took a look at Wikipedia hoping to gain some insight and clarity. According to Wikipedia, Collaboration is a recursive process where two or more people or organizations work together toward an intersection of common goals, and, an aggregate is a collection of items that are gathered together to form a total quantity.

Since collaboration only means different groups or organizations working together towards the same goal, that term can apply to just about any business function. However when we combine it with the word aggregate to form the collective e- procurement term Collaborative Aggregation which was coined by this author in 2006; we arrive at something potentially meaningful.

Collective buying organizations and sometimes share groups often combine purchasing volumes of like products to drive better discounts. Large companies often aggregate their purchases among departments and are more often today doing the same thing across different operating group’s or companies within a larger organizations to drive economy of scale in purchasing.

The unfortunate truth is that not much out of the box thinking is going on in this process. We are so involved in the process that we can not see the forest for the trees.

If you’d really like to understand how collaboration and aggregation can be used in your company to drive down costs and improve quality, please contact a SafeSourcing customer services representative.

We look forward to and appreciate your comments.

Posted in B2b Supply Chain

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