Archive for the ‘B2b Supply Chain’ Category

How does it taste so good?

Monday, May 22nd, 2017

 

Today’s post is by Steven Belvin, Sr. Account Manager at SafeSourcing.

We all enjoy a soda from time to time, but does anyone ever think about how it was manufactured and botted to later be sold? Fun fact about the origins of soda is that it is believed to have been created in the 1700s. www.madehow.com explains that here: “In the late 1700s Europeans and Americans began drinking the sparkling mineral water for its reputed therapeutic benefits. The first imitation mineral water in the U.S. was patented in 1809. It was called “soda water” and consisted of water and sodium bicarbonate mixed with acid to add effervescence.” Obvious these delicious drinks have been around for some time now. But that still does not answer the “how does it get on the shelf?” question. Well it is actually broken down into 5 simple steps as seen below:

  1. Clarifying the water – Filter the water until it reaches the desired pH level by adding ferric sulphate or aluminum sulphate into the water causing the floc to expand so it can then be filtered out.
  2. Filtering, sterilizing, and dechlorinating the water.
  3. Mixing the ingredients – the dissolved sugars and flavor concentrates are pumped and conveyed into batch tanks, where then the water and syrup are carefully combined until the desired flavor has be achieved.
  4. Carbonating the beverage – once the liquid is at a controlled temperature the carbonation is added. The amount of carbon dioxide used is dependent upon the type of soft drink.
  5. Filling and Packaging – Finally the drink is distributed into its correct bottle or can and is then sealed and sits in the warehouse until it is ready to be distributed to multiple locations across the world.

As you can see there is so much more that goes into making those delicious drinks than Coke™ or Pepsi™ may want you to see. Another aspect of this would be how does it get sold to the store? This is where a company like SafeSourcing may come into play. We work with multiple companies to help them find the right soda company for them. So why not give us a call yourself and see what we can save you on your soda, plastic goods, labeling and much much more.

For more information on how SafeSourcing can assist your team with this process 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.

 

Ref:……………………..

Avizienis, Audra. “Soft Drink.” How Products Are Made. N.p., n.d. Web. 16 May 2017.

 

 

 

 

 

 

 

You just got a great price on an inventory of goods; now how do you protect it?

Friday, May 5th, 2017

 

Today’s post is from our SafeSourcing Inc. archives

One of the many ways that SafeSourcing helps its customers is to find ways to allow them to reduce their Cost-Of-Goods by sourcing smarter through the use of tools and services that give them total insight into what they are purchasing and from whom.  As is often the case, customers are able to find a vendor they feel comfortable with (many times the incumbent) at prices that help their bottom line.  The issues lie once the contract is signed, the new pricing is in place and the product begins to get scheduled for delivery.

Today we are going to take a look at some of the potential supply chain holes and what you can do to ensure that the great deals you have completed are not offset by process, theft and damage problems that can be monitored and controlled.

Vendor issues – One of the common misconceptions about Loss Prevention professionals is that they primarily deal with activity that is fraud or theft when in reality it is often honest mistakes, but mistakes nonetheless, that contribute much of the loss when product comes from a vendor.  One of the best ways to combat this is to engage a Loss Prevention software company to analyze the data of what is being delivered (which includes quality control) against the invoice in an automated system that allows for real-time analysis.  Ensuring that the product quantity, style, and quality is what you paid for is the first step to plugging your supply chain holes.

Transport issues – Transportation is becoming one of the most alarming areas of loss of your product, especially in bigger cities where organized crime is routinely stealing entire trailers full of merchandise.  RFID and GPS pallet monitoring are two of the ways that companies are using to monitor their shipments from the time they leave the vendor until they arrive at their warehouses.  Speak with your transportation company about new ways to monitor shipments and controls your loss in theft and damages and if you are approaching a contract, now may be the time to begin seeing what other companies are offering by running an Request For Information.

Internal Issues– If you can get your shipments to your offices or warehouses without much damage or loss then you have only won half the battle, especially if the product you received will need to go from a warehouse or distribution center to another location.  CCTV systems are regularly employed in warehouses to monitor the flow of goods coming and going but require an employee or service to assist in the effective monitoring.  Many times the practices you enforce for the workers in your facilities can be an effective tool as well such limiting the access an employee has to their purses or bags until they are in a secured area. Monitoring what happens to the product you purchase once you receive can be just as important as making sure it gets to you safely.

The supply chain can be a place full of pitfalls for your purchased goods if you are not monitoring it properly but you have many good options and tools to help you do that. When you build your T&C’s, list the policies and tool requirements that you want your vendors to adhere to in order to mitigate after the negotiation leakage.  For assistance in finding companies and products to help do this, please contact a SafeSourcing Customer Service Representative.  

We look forward to your comments.

Part II of II. Are reverse auctions a good tool to use in the retail distribution cost plus arena?

Friday, March 3rd, 2017

 

Todays post is by Ron Southard, CEO at SafeSourcing

Yesterdays post reviewed why and how this author felt that reverse auctions were potentially good for both the distributor and the retailer alike. So just what is cost plus?

According to Wikipedia  Cost-plus pricing is a pricing method used by companies. It is used primarily because it is easy to calculate and requires little information. There are several varieties, but the common thread in all of them is that one first calculates the cost of the product, and then includes an additional amount to represent profit. It is a way for companies to calculate how much profit they will make. Cost-plus pricing is often used on government contracts, and has been criticized as promoting wasteful expenditures.

Once unit level cost has been established for the distribution of products it’s easy to turn that into a percentage and add it to the price of a product coming up with a distributed unit price or category price. The most important part of this pricing exercise for the distributor is to get the distribution costs correct. This can include price of storage, freight, length of travel, driver cost and any number of other costs. This is an area where a distributor can lose a lot of money if they are not very careful.

So, are revere auctions a tool that can help distribution companies?  The answer is a clear yes both above and below the gross margin line. If you like to know more please contact me at ronsouthard@safesourcing.com.

We look forward to and appreciate your comments.

Part I of II. Are reverse auctions a good tool to use in the retail distribution cost plus arena?

Thursday, March 2nd, 2017

 

Todays post is by Ron Southard, CEO at SafeSourcing

A lot of distributors have told this author that reverse auctions don’t apply to them because they use the cost plus model and as such they just add their price or profit margin on top of the contract price with their source to drive their distributed price.

The fallacy in this thinking is that it may make buyers and category managers lazy in their approach to driving margin within the categories that they manage. This results in a higher price to the retailers they distribute to and ultimately to the consumer or their customers customer. A worst case scenario is that the consumer stops shopping at their customer’s store which reduces overall volume and further increases prices by not meeting volume incentives. It’s a slipper slope.

Off course this argument is relatively easy to overcome when we get around to discussing capital goods and expense related products and services area. These areas have an impact on the distributor’s net profit. And I’m sure that many of you will agree that just because one says they are a cost plus provider does not necessarily mean it’s true in the most pure sense of the definition.

Check back tomorrow and we’ll review what the real definition of cost plus is in part II.

We look forward to and appreciate your comments.

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

Friday, November 25th, 2016

 

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

Happy Thanksgiving Weekend from SafeSourcing

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.

Your Suppliers Performance – Trick or Treat?

Thursday, October 13th, 2016

 

Today’s post is from our SafeSourcing Archives

Last week we took a look at the life of your purchased products once you have the contract signed and begin to place orders and how you can protect that inventory along the supply chain.  Today we take a look at the job your suppliers are doing while the contract is being executed.  What is the quality of their goods; timeliness of the shipments; pricing being billed versus the contract?   Are you getting “tricked” or “treated” by your suppliers?

Many retailers have looked at the process of developing supplier scorecards that measure how well their vendors are doing in the relationship with them.  If designed and executed well, these scorecards can be invaluable in later stages of negotiating new contracts or in evaluating new vendors against a standard you are used to receiving.  Let’s look at a few of the metrics to consider when creating a good supplier scorecard.

Invoice audits – Many companies work so hard to get a great deal, great prices; finish with a contract that works well for the company only to move forward without well-defined processes for auditing the new invoices to ensure the new pricing is being affected by the vendor.  One of the most important pieces of creating a good evaluation program for your vendors will be to determine how often and which invoices you are going to audit and then stick to that audit schedule.   The bigger your company the more important this will be.

Quality Control – Scoring the suppliers on quality comes in a few different forms.  The first thing to measure is the quality of the product itself: Are you getting the product you contracted and does it meet the specifications that were agreed upon?  Another area is in the packaging of the product when it arrives.  Many times it is how the product was packaged to ship that is the problem and frequently responsible for big losses.  How the items measure up to their warranty will also be another critical area to measure for quality.

Delivery–Even the best product at the best prices has value only if you can get the product in the timeframe that your company needs it.  Vendors should be measured on their ability to deliver within the window agreed upon in the contract but they should also be measured on how capable they are in delivering unscheduled product in emergency situations.  As in any business, circumstances occur that take you outside of the normal schedules and you need partners who can deliver when you need them most.

Service–This leads us to final scoring point for this blog; services.  Delivering unscheduled product within a window of time you need it is one thing but how your suppliers handle the relationship with you business in times of conflict or when issues arise is equally important.   Scoring this area can be slightly more subjective, however developing a strategy by which you can record these bumps in the road and how your suppliers react to them will be valuable in future negotiations.

For more information on scoring your suppliers or for assistance in reviewing or creating automated scorecards, please contact a SafeSourcing Customer Service Representative.  

We look forward to your comments.

The End of Antibacterial

Thursday, September 15th, 2016

 

Today’s blog is by Margaret Stewart, Executive Assistant at SafeSourcing.

In the past decade or so, the market has seemed to be flooded with antibacterial soaps, sanitizers, detergents, and other cleaning products, but recently the FDA has essentially banned those antibacterial products. Many of us are asking, why would they do such a thing?

In today’s world of keeping things extra clean and preventing the spread of bacteria and other causes of illness, many of us see antibacterial soaps as a step in the right direction to keep our surrounding areas clean and our families healthy. This ban on antibacterial comes as a shock to many people. The problem is, however, that the antibacterial soaps have not been found to be any better than classic soap, and the chemicals used in the “antibacterial” do not even kill bacterial, but rather expose the bacteria to low levels that help the bacteria breed into strong, highly antibacterial-resistant bacteria. To top it off, scientists have found that antibacterial soap chemicals actually do more harm to people, including, according to an article by NPR, a disruption in hormone cycles and muscle weakness.[i]

So is this the true end of “antibacterial”? Not quite. The ban of 19 different antibacterial chemicals in soaps haven’t been banned from hospitals and food service, but rather banned from household use. Many soap companies have already stopped use of the chemicals in question in their over the counter soaps and have begun using other chemicals thought to be antibacterial. In response, the FDA has set a limit of one year to show scientifically proven effectiveness before another ban takes place.

With the soap market changing dramatically, many businesses may find themselves needing new soap products. This opens up a whole new window of opportunity for new business and renegotiating for new products. SafeSourcing can help with both ends of this process through its procurement specialties.

For more information on how SafeSourcing can help you source soap products, or are interested in our Risk Free trial program, please contact a SafeSourcing Customer Service representative. We have an entire team ready to assist you today.

[i] http://www.npr.org/sections/health-shots/2016/09/02/492394717/fda-bans-19-chemicals-used-in-antibacterial-soaps

 

HVAC System Efficiency.

Thursday, June 16th, 2016

 

You do not want trouble with your air conditioner in the summer

Today’s post is by Gayl Southard, Administrative Consultant for SafeSourcing.

In today’s blog, Gayl discusses the economics of air conditioner filters.

Recently one of our air conditioners began making loud noises each time it cycled on and off. It was so loud in fact, that it would wake me up.  In addition to the loud noise, it wasn’t cooling the house.  Living in a hot climate such as Arizona, you do not want trouble with your air conditioner in the summer.  I made a call to my service company on Saturday and explained the problem.  Luckily, I was able to line up a repair person to be at my home on Monday morning.  After some investigation, the repairman said my unit was frozen.  In order to remedy the situation, he had to turn the heat on in the house to melt the ice in the system.  Initially the repair person said he thought I had dirty AC filters, but I knew that the filters were clean and are changed out regularly.  It turned out the air conditioner was working overtime with the heavy-duty, pleated filters I have been using and strained to pull the air to cool the house.  I was advised to use a fiberglass filter that needs to be changed out every 30 days.  Although I change my air conditioner filters on a regular basis, I learned about the damage a dirty filter can have on your system.

  • A dirty filter in your HVAC system will raise energy bills. A dirty filter restricts the air flow into your HVAC system air handler, causing it to work harder to cool or heat your home.
  • A dirty clogged filter can restrict HVAC airflow and potentially cause problems with the system. They also cease to filter allergens and other particulates out of your air.
  • Dirty filters can make your HVAC system fail completely. Repairing a HVAC system can end up costing you a pretty penny.

The air in your home is up to five times more polluted than the outside air and in businesses it can be even worse. Impurities in the air such as pet dander, mold, bacteria, dust and dirt, and pollen build up in your air conditioner and ventilation system which can cause allergies, asthma triggers, and other respiratory problems.  Thus, it is very important to keep up with changing air conditioner filters regularly.

An AC filter uses special, densely woven, electrostatically charged material to trap pollutants in the air before they pass into your air conditioner or HVAC unit. Over time as the AC air filter gathers more pollutants, it becomes clogged, making it more difficult for the air conditioner to pull air through it.  If you live in an environment where you are doing remodeling, if its allergy season, or if you have pets, you should consider changing the filter more often.

SafeSourcing has a wealth of knowledge on sourcing HVAC units, filters, and maintenance agreements. Please contact a SafeSourcing Customer Service representative or ask about our Risk Free trial program. We have an entire team ready to assist you today.

 

 

 

K-Cups – Convenient? Expensive? Environmentally Friendly?

Monday, March 28th, 2016

 

Today’s post is by Gayl Southard, Administrative Consultant for SafeSourcing.

We asked for a Keurig for Christmas. Although we love the convenience of the coffee brewing machine, we have found out a lot along the way.

Green Mountain Coffee Roaster bought Keurig in 2006 for $160million. The National Coffee Association reported that Keurig Green Mountain is the biggest change in coffee-brewing since Mr. Coffee in the 1970’s.  The method of brewing coffee by injecting hot water into a plastic pod has quickly rivaled drip coffee.  It is a faster and more convenient way to brew coffee.  People in the workplace got used to a Keurig in the office and began buying them for their home.

Keurig’s patent on K-Cups expired in 2012. This has opened doors for many companies to make pods at cheaper prices.  Private-label cups went from 7 percent of the market to 14 percent in the second half of 2015. Credit Suisse reported the sales of private- label cups increased by 203 percent over last year, while Keurig’s Green Mountain cups grew by only 12 percent (keep in mind, they had the monopoly previously).

Keurig’s business model was built on selling the coffee units cheap, but with the intention of recouping their money on the K-Cups. “Keurig is trying to establish a technological one: its new brewer, which goes on sale this fall, has a mechanism that scans each pod for Keurig’s markings and locks out any unapproved capsules.  It’s essentially digital rights management (DRM) –a mainstay in music and video – adapted for coffee.”[1]  Currently, the Keurig literature tells the consumer to buy only Keurig-approved pods.  Many food companies have tried to get a piece of Keurig’s single-cup coffee market.  Starbucks, Nestle, Kraft Foods are a few examples.  Currently these companies are packaging K-Cups for Keurig.

A big reason why K-Cups are preferred is because you know you are drinking fresh coffee. Keurig grinds the beans in a factory, flushes them with nitrogen, and seals them in air-tight capsules.  Oxidation is what makes coffee go stale.  The second appeal to K-Cups is the convenience.  You can’t mess up!  Unlike brewing a whole pot of coffee in a traditional coffee maker, you can brew single cups of coffee, decaf coffee, as well as flavored coffees—pleasing everyone’s taste.   Although pods are convenient, they are much more expensive in the long run than brewing coffee.  The environmental concerns of disposing these plastic cups are significant.

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

1  Josh Dzieza, The Verge, 6/30/14

What is Crystalized Polylactic Acid?

Tuesday, January 19th, 2016

 

 

Today’s post has been written by Ryan Melowic Vice President of Customer Services at SafeSourcing.

Crystalized Poly Acid sounds scary, however, according to Wikipedia “Polylactic acid or polylactide (PLA, Poly) is a biodegradable thermoplastic aliphatic polyester derived from renewable resources, such as corn starch (in the United States and Canada), tapioca roots, chips or starch (mostly in Asia), or sugarcane (in the rest of the world). In 2010, PLA had the second highest consumption volume of any bioplastic of the world.”

Uses

Crystalized Polylactic Acid is used to manufacture the following types of products.

  • T-shirts
  • Coffee cups
  • Packaging
  • Bottles
  • Other everyday items

Advantages

  • Compostable in commercial facilities, meaning that it will break down under certain conditions into harmless natural compounds.
  • Heat-Resistant to 185°F
  • Sturdy feel, stronger than starch plant based products
  • Product is 97% USDA certified bio based product

Unfortunately, the current PLA production process is costly and creates waste. In July of 2015, researchers in Belgium developed a new production technique that is less expensive, greener and makes PLA a more attractive alternative to petroleum-based plastics.

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.