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All the policies in the world don’t necessarily make us safer.

Friday, January 27th, 2012

I read two articles today. Most people would not connect them. I do. The first was on the front page of USA TODAY titled Scientists engineer bioterror fears by David Vergano. The subtitle was New mad-made bird flu strain raises prospect of deadly pandemic. The second article was in the business section of THE ARIZONA REPUBLIC and titled Obama plan would protect goods headed to the U.S by John Heilprin.

I’m not sure I need to tell you how these articles are tied together, but an army is only as good as its supply chain and a population is pretty much the same from a product availability and safety persepctive. If you’d like proof, Think North Korea vs. the U.S.So where does the work need to be done. 

This picture is just product safety oriented without adding in any of the other concerns realted to the articles

Big job. Lots to be done

We look forward to and appreciate your comments

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

Going Postal!

Thursday, January 26th, 2012

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

Back in December, the U.S. Postal Service announced that it wanted to cut $3 billion in costs in 2012 so that they could avoid bankruptcy.  Delays in mail, eliminating Next day mail, eliminating Saturday delivery are all things that were under consideration for upcoming changes.  As the organization struggles to maintain operations in the wake of an electronic world that has eliminated the need for so much mail, the question for businesses becomes how are they going to begin migrating as well to avoid the rising postage costs?

Today we will be looking at a few ways companies are already doing this, in some cases saving as much as $250 to $500k a year in postage costs.

Customer statements  – Customer statements can encompass many things, be it invoices, monthly statements, performance reports, etc. but in the end what it really means is that there is at least one piece of paper that is getting inserted into an envelope and being mailed to an address or P.O. box.  In just this one activity there is the cost of printing and paper, the envelope, the postage, the processing time (whether machine or human), the delay of having that item be received and on top of all of that there is the element of an imperfect world where, due to address changes, handling mistakes or customer error, the item may never make into the hands of who it was intended to at all.  With all these things in mind, and because of the savings for handling this electronically it is easy to see why it is a big focus many businesses are starting to have.

Catalogs – There will be an element of customers that for a while will always want paper catalogs, however with the cost of generating those catalogs going up and the generations of people that will continue to demand them decreasing, the need to continue producing paper catalogs will be one that many companies closely examine in the next 5-10 years.  Add to all of that the fact that updating on online catalog can take mere seconds and updating a printed catalog is impossible after it is printed and the need to assess the ROI on continuing to print large catalogs.  In fact it’s been almost 20 years since one of the most famous catalogs (Sears RoebucK in 1993) stopped printing due to rising costs.

Employee communications – Newsletters, paystubs, tax forms, medical forms, human resource packages are all examples of traditional items that companies spend millions of dollars on every year to send their employees.  With the advent of company HR portals that now allow an employee to login through the internet and access all of these items with very low cost to the company it is a third area where companies are placing their focus in reducing printing, processing and especially postage costs..

Watching the timeline of events for the USPS since declaring itself debt-free in 2005 has been a hard and painful thing to watch.  As costs have increased and usage decreased it is a critical time for businesses to evaluate the items that are being produced and mailed and whether taking those items into the digital age is the right move from an operations and costs standpoint.

For more information on finding suppliers and products to help you make this move, please contact a SafeSourcing Customer Service Representative.  

We look forward to your comments.

Posted in B2b Supply Chain, E-procurement, E-supply Chain

Capitalism provides the opportunity to consider alternative solutions.

Tuesday, January 24th, 2012

Today’s post is by Danielle Begley, Account Manager at SafeSourcing.

Last week in protest of  the SOPA and the PIPA bills against internet piracy from the House and the Senate, close to 10,000 websites blacked out either all or part of their content and allowed users to sign their petition against the Stop Online Piracy Act and the Protect Intellectual Property Acts.

The world’s largest Internet companies boasted their presence in support of the petition as Google blacked out their logo, Craigslist blacked out part of their website, and Wikipedia went so far as to black out all content on their site.  In addition to the blackout, thousands of companies, including social media titan Facebook, expressed their support of the petition through various media outlets.

Millions of users signed the petition, made calls and sent emails to lawmakers which inevitably resulted with the bills losing support within Congress, thus proving the strength and power these internet giants have over their users, the media and even Congress. 

The strength of these giants made me think of the power incumbent suppliers boast when faced with running auctions where their business is in question.  Incumbents use all tactics possible in order to bring strategic sourcing companies down and much like Congress, the customer can at times give in to the protest. 

While this author believes the benefits of the internet would be severely jeopardized if censorship was enacted, the same holds true for the customer.  While an incumbent supplier may have an existing relationship, capitalism provides the opportunity to consider alternative solutions, which are similarly jeopardized when incumbent suppliers protest the sourcing process.

If you are facing a similar situation with your incumbent supplier, or have any questions on how to handle this problem, please contact a Customer Service Representative for more information.

We look forward to and appreciate your comments.

Posted in B2b Supply Chain, Business Sourcing

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

Friday, November 25th, 2011

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

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

Thursday, November 24th, 2011

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

Your Suppliers Performance – Trick or Treat?

Monday, October 31st, 2011

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

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.

Posted in B2b Supply Chain, Business Sourcing

Just what is a Private Label product and where do you source it?

Wednesday, October 26th, 2011

Probably the best source of information on private label or store brand products is the PLMA or Private Label Manufacturers Association. This is actually a global organization.

According to their website, their show this year in Chicago from the 13th -15th of November will present more than 2,000 exhibit booths, featuring food, snacks and beverages, household and kitchen products, GM, and health and beauty. Exhibitors range from large, well-known store brand makers to small and medium-size companies. More than 35 countries will be represented on the show floor, including ten national pavilions.

If you’re not happy with your current private label offering or have never had one, this show is a must. There are also a number of educational workshops. In fact, PLMA sponsors workshops throughout the world annually. You can find a little more information on these at their website http://plma.com/.

We look forward to and appreciate your comments.

Posted in B2b Supply Chain, Supply Chain Procurement

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

Monday, October 24th, 2011

One of the 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.

Posted in B2b Supply Chain, Sourcing Strategy, Supply Chain Procurement

Here are some additional thoughts on managing overstock and other inventory leftovers

Monday, October 17th, 2011

Friday’s post discussed the use of forward auctions as a way to improve earnings and reduce shrink from overstock. Here are some thoughts as to other methods you might consider in addition to using forward auctions.

Last week, one of our customers mentioned that they were dealing with one of their vendors to purchase back some obsolete inventory.  This is just one of the methods some companies use to move old or excess items they have purchased and today’s blog will be taking a look at a few more.

Vendor Assisted – The example mentioned above is one method of dealing with excess inventory, and is one of the most important methods to consider when negotiating the purchase of new items.  Unfortunately, many companies miss this opportunity until it is too late.  Letting vendors you deal with know they may have an opportunity to buy back you excess inventory up front will many times get more aggressive pricing from them on the new items you are purchasing.

Third party buyback programs – If you are not able to negotiate a deal for your obsolete or discontinued items up front with the vendor, another approach is to contact third party companies who special in purchasing excess inventory at a reduced price and reselling it through their own channels.  Depending on the type of product you are looking to move there will always be companies who will specialize in handling it for you.

Donation Programs – Occasionally the sale of excess or obsolete will either not be possible or will not be not as valued as the tax write-off given when it is donated.  As in the cases above there are many companies who will coordinate the pickup and redistribution to charities that they work with; taking the entire burden of getting rid of the products off of your business and providing you with a tax incentive on top of it.

There are many ways to take care of your excess inventory and as is often the case, the earlier you plan the more options you will have in the directions you can take.  For assistance in finding ways to move your excess, discontinued or obsolete inventory, please contact a SafeSourcing Customer Service Representative.  

We look forward to your comments.

Posted in B2b Supply Chain, Retail Supply Chain, Sourcing Strategy, Strategic Sourcing

Clean out those back rooms and move your overstock items using a forward auction.

Friday, October 14th, 2011

Why is it that we never hear of retailers running forward auctions? There are dozens of sources waiting to buy your overstock which all retailers know will reduce shrink and improve bottom line profitability.

If you go to any internet search engine and type in the term overstock, the data returned is in the millions of pages. Many of these links are locations  for Business to Business (B2B) and Business to Consumer (B2C) companies that will gladly agree to participate in e-negotiation events in the form of a forward auction to purchase your overstock or liquidated products for resale through their on line offerings.

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.

Ask your e-negotiation solution provider how they can help reduce your overstock and shrink with forward auction tools, and who they would invite as buyers. You company stakeholders will applaud your efforts.

We look forward to and appreciate your comments.
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Posted in B2b Supply Chain, E-procurement Solutions, Sourcing Strategy, Strategic Sourcing

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