SafeSourcing Blog

click here to return to www.safesourcing.com

Archive for the ‘B2b Supply Chain’ Category

« Older Entries
Newer Entries »

We’ve all heard about the wild blue yonder. But what is Blue Ocean Strategy?

Thursday, September 15th, 2011

4PL’s or fourth generation logistics providers are the newest (although not that new) of logistics providers and typically they are a consulting firm that brings together the resources of other providers such as 2PL’s and 3PL’s to drive world class logistics performance. This might include global or local companies that are focused on air transportation; ground transportation as well as ocean bound freight. The goal of these organizations is to piece together solutions rather than to develop or own them. Without assets, 4PL’s can change quickly as performance and demand dictates.

With a good 4PL in place companies typically are not bound by their traditional marketing areas and can create new demand in areas they may have never conducted business in before. This is referred to as Blue Ocean Strategy.

According to Wikipedia, Blue Ocean Strategy is a business strategy book first published in 2005 and written by W. Chan Kim and Renée Mauborgne of The Blue Ocean Strategy Institute at INSEAD. The book illustrates what the authors believe is the high growth and profits an organization can generate by creating new demand in an uncontested market space, or a “Blue Ocean”.

How are you managing your logistics requirements?

We look forward to and appreciate your comments.

Posted in B2b Supply Chain, Supply Chain Procurement

A repost to think about, Are you wining your supply chain battle?

Friday, August 19th, 2011

It could be said that much of today’s thought relative to supply chain management is rooted in the history of human expansion. In fact there are many examples of how expansion which many times happened or was planned in conjunction with the conquest of others was either successful or failed based on the ability to keep supplies flowing to the expansionists or armies associated with them. If you are a growing retailer with your own expansion plans some careful thought as to your supply chain and the necessary contingencies may be your most important activity

According to Wikipedia in military science, maintaining one’s supply lines while disrupting those of the enemy is a crucial—some would say the most crucial—element of military strategy, since an armed force without resources and transportation is defenseless.

Obviously this takes us back to our opening question; are you winning the supply chain battle? What would you do today if one or more of your current suppliers were to go out of business or enter bankruptcy (a real possibility)? Have you made plans as to how your company would replace the goods or services provided by these suppliers?

A recent example that may come to mind happened during the recent H1N1 (swine flu) outbreak first detected in the United States during April of 2009? Drug store chains during that time of panic became the first stop for much of the population in search surgical masks or other anti bacterial supplies. Many retailers ran out of stock and many suppliers were unable to meet the increased demand. Most retailers were not sure where else to turn for additional supply based on the increased demand. The trickle down effect of this could have gone on an on well beyond the impact of surgical masks or anti bacterial product shortages.

The obvious follow on question is which back orders would suppliers fill first and where would your consumers go to get them. The answer is probably not at your stores. The obvious reason is because hospitals, governments and large retail companies like Wal-Mart buy more of these products than you do.

Is winning the supply chain battle important? You bet it is! Do you have the right tools in place?  This author believes the answer is absolutely not.

Ask your solution providers how they would help you in a situation like this.

We appreciate and look forward to your comments.

Posted in B2b Supply Chain

Still having supply chain issues?

Friday, July 15th, 2011

It has been 125 days since the devastating earthquake and tsunami hit Japan, yet many companies are still struggling to cope with the fallout of their supply chain. Hopefully, our readers are not in this situation. However, if your company is still struggling with a supply chain issue or if you would like to be prepared for a future disaster, please read on.

Yesterday, I spoke with a vendor that had to sit out of a $2.9M opportunity due to such an issue. What’s worse; they told me that they have taken steps to source their products in North America, but that they are still six to eight months away from considering new business. No matter who you are, you simply cannot afford to walk away from sales opportunities of this (or any) size.

So, how could they have mitigated their exposure to this risk?

There are a variety of resources and processes that could (and should) have been in place long before any disaster struck.

1.Only purchase using an RFx service. Hosting an RFI, RFP, or an RFQ would have identified additional sources of supply with contacts in the event that a vendor change is required.

2.Implement a contract management service. In the example I have used, they have had this same source of supply for years. Using contract management, this company would have been prompted to source this product several times during this timeframe based on the appropriate schedule and contract terms.

3.Consult with your strategic sourcing partner. Whether you want to be prepared for the future or work through a current supply chain issue, call on your partner for advice. Their job is to help you succeed.

For more information on SafeSourcing and supply chain interruption preparedness, please contact a Customer Service representative.

We look forward to and appreciate your comments.

Posted in B2b Supply Chain, Supply Chain Procurement

What is “The International Green Construction Code”?

Tuesday, July 12th, 2011

Leadership in Energy and Environmental Design or LEED seems to get most of the press, and is a program of the U.S. Green Building Council or USGBC. However there are multiple ways to drive construction projects in a green direction.

In addition to LEED, in 2009, the International Code Council  or ICC launched the development of a new International Green Construction Code (IgCC) initiative, subtitled “Safe and Sustainable: By the Book,” committed to developing a model code focused on new and existing commercial buildings addressing green building design and performance.

In the future SafeSourcing will be vetting SafeSourceIt™ suppliers against both of these initiatives in order to provide the broadest support of Construction Company’s support of our customers CSR initiatives.

We look forward to and appreciate your comments.

Posted in B2b Supply Chain, E-supply Chain, Green eProcurement Practices, Retail Supply Chain, Supply Chain Procurement

This is a repost from three years ago titled “Thinking Green”.

Monday, July 11th, 2011

Let’s start with an old truism. “You can’t improve what you don’t measure”. This applies to green and safety standard compliance. Importantly, companies also can’t expect their trading partners to know what they are not told. In a 2008 white paper (that you can find on our website) titled “Safety in the Supply Chain, an Irony” I listed nine steps to safer and a more eco-friendly procurement. Although simple, these simple steps go a long way towards accomplishing the most important step in any endeavor. If you don’t write it down, it won’t happen. As a guideline I offer the following:

Nine steps to safer and more eco-friendly procurement

1. Be pro-active in driving not for resale and for resale product safety within your company, and also supporting eco-standards in the procurement process.
2. Pay it forward with all of your trading partners by sharing what you are doing, and asking what they do to support yours or similar initiatives of their own.
3. Educate your employees and trading partners about common safety standards and guidelines such as the SQF Certificate www.sqfi.com  and the Global Food Safety Initiative www.ciesnet.com.
4. Educate your employees and trading partners about common eco-standards such as Green- Energy National Standard www.green-e.org or EcoLogo www.ecologo.org. 
5. Point associates and trading partners to free educational websites such as www.safesourcing.com to use their free SafeSourcing Wiki or the Sourcebook professional social network for procurement professionals.
6. Only use trading partners that follow your lead.
7. Train your team to understand and use all available tools that insure supply chain safety such the free daily safety in sourcing blog at www.safesourcing.com  or the low cost SafeSourceIt™ Supplier Database and Reverse Auction Tools.
8. Write it down and then impose a system of measures and controls to monitor performance against clearly defined goals.
9. Start at the top and engage all levels of your company.

We look forward to your input on this weeks posts.

Posted in B2b Supply Chain, Green eProcurement Practices, Supply Chain Procurement

Buyers; Soybeans are down and the Corn harvest will be up. So What?

Friday, July 1st, 2011

It appears as though the corn crops will be better than expected this year and as a result drive prices down on the supermarket shelves. The reason is because farmers planted more corn than usual based on what the futures market was telling them relative to other crops. Because they planted more and the yield will be higher futures actually went down. This should impact the price we pay for a variety of products impacted by corn.

If you don’t think that corn impacts many products, think again. Corn impacts beer, aspirin, livestock feed, carbonated beverages, Ethyl alcohol, textiles, soaps and hundreds of other products.

If you’re a buyer, you need to be aware of this as the impact in the market typically trails the crop by about 3 to 6 months. So while you are buying products you need to understand that costs should come down before year end and make sure the language in your contracts allows you to take advantage of this. Think de-escalator language on any contract between now and year end.

We look forward to and appreciate your comments.

Posted in B2b Supply Chain, Business Sourcing, Contract Management, Sourcing Strategy, Strategic Sourcing

Buyers; Do you need a great place to research product quality and recall issues?

Wednesday, June 29th, 2011

The U.S. Consumer Product Safety Commission is charged with protecting the public from unreasonable risks of injury or death from thousands of types of consumer products under the agency’s jurisdiction. The CPSC is committed to protecting consumers and families from products that pose a fire, electrical, chemical, or mechanical hazard or can injure children. The CPSC’s work to ensure the safety of consumer products – such as toys, cribs, power tools, cigarette lighters, and household chemicals – contributed significantly to the 30 percent decline in the rate of deaths and injuries associated with consumer products over the past 30 years.

 Recalls and Product Safety News can be found at the CPSC’s website and can be searched using a number of categories, dates and other criteria such as those below.

1. Recall Number
2. Company
3. Product Type
4. Product Description
5. Hazard
6. Country/Administrative Area of Manufacture
7. Recall Date
8. UPC

You don’t always have to buy something in order to get your job done. Sometimes just knowing where to find the information can be the hardest part of your job. Now you have one fewer places to look.

We look forward to and appreciate your comments.

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

Rain, Wheat and Pasta!

Tuesday, June 28th, 2011

For weeks, North Dakota and Montana, the nation’s two largest producers of durum wheat have been pounded with heavy rain that will likely mean a drop of up to 47% of durum wheat production. 

Durum wheat, or “macaroni wheat”, is the hardest of all wheat types and that together with its high protein and gluten content make it the perfect wheat to be used in the manufacturing of pasta.

Due to the heavy rains farmers have been unable to get crops planted and even now they are out of time to plant crops in time to avoid the pre-winter frosts and will likely have a little more than half of the durum wheat production as normal, affecting prices of related products all over the world.
Durum wheat was up over 52% in May and the May U.S. pasta prices were the most expensive on record while other durum wheat producers like Canada saw prices jump 47% in May.  With fewer acres of wheat being produced the pasta prices will be affected accordingly.

Companies producing pasta products like Kraft with their Macaroni and Cheese and Campbells with products ranging from noodle-based soups to Spaghettios, have already announced increases in many of their products due to the lack of durum wheat production and subsequent higher durum wheat prices.

In product categories such as this one it is more important than ever to make sure that you are doing everything you can to keep the cost of goods controlled with tighter contracts containing index terminology and keeping the pricing you receive as competitive as possible. 

When the supply of product takes a huge decrease in relation to its demand, the opportunity for competitive pricing events becomes a little more difficult, as vendors will have plenty of places to sell their product. 

This may be a time to get more creative in other ways as far as length of contracts, other services or products you may agree to take on, or other considerations that will allow you to get competitive pricing on a high demand product category.  It is hard to predict what climatic conditions such as all of the spring rain will do  to agricultural products, but smart procurement professionals can learn to leverage other techniques in order to keep their costs for products affected by these conditions under control.

For more information on SafeSourcing and how we can assist your company with sourcing these goods and services, please contact a Customer Service Representative for more information.

We hope you have enjoyed last week’s  Five Part Series and look forward to and appreciate your comments.

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

Is it possible to compress prices in this market? Commodity prices are rising aren’t they?

Tuesday, June 14th, 2011

This is the precise reason why some companies are profitable and others are not. Just because the commodities that are the basis for products we buy are up, is no reason to not try and compress pricing through the use of e-negotiation tools or other more traditional methods. With that said e-negotiation tools will make the process much easier and insure compression in a much shorter period of time.

There is a lot that goes in to the products companies buy and maybe even more in the prices they pay. Two things are certain. There will always be suppliers that want to bid on your business. There will always be suppliers that are willing to invest to get your business. This dynamic is what will allow you to compress prices in an up market.

However, there is work to do on your part in order to make sure you are sourcing the categories or products that make the most sense at any given point in time. Here are two things you can and should do. Check your current contracts. Those that are over two years old with the same supplier will be more likely to drive savings. Check the commodity markets for specific commodities that will impact your pricing. As an example, the price of oil is up so freight will be more expensive. A great place to check commodity data is index mundi. You can check current and historical commodities and product related pricing.

Understanding everything about what you re buying and what drives its prcing and using the proper tools to leverage the supply base can and will result in price savings even in an up market.

We look forward to and appreciate your comments.

Posted in B2b Reverse Auction, B2b Supply Chain, Business Sourcing

If you treat suppliers fairly and openly they will continue to participate in your strategic sourcing events.

Thursday, May 26th, 2011

We regularly conduct surveys as part of our SOP when we have completed an online e-RFX. These surveys are pivotal to ensuring that participants in our customer’s events were treated fairly. What our suppliers have told us makes events successful for them and would encourage them to participate again even if they did not happen to be the low bidder in a particular event is that this is an educational process for their company and ultimately becomes a way to do old things in a new way. To a company our suppliers encourage the following. Openly communicate with all suppliers and make sure they understand everything and are completely comfortable with specifications, terms and conditions, quoting instructions etc. Take the time to be complete even if they have participated in the past. Make sure they have no questions.
 
Here is a sample list of questions that should be considered when inviting or encouraging suppliers as  participants.

1. Does the supplier understand that there is no cost to them to participate?
2. Do they understand they will be trained at know charge?
3. Do they understand event timing and requirements?
4. Does the supplier understand the terms being used and how they apply to a strategic sourcing event such as?
a. Current Price
b. Reserve Price
c. Index Price
d. Mixed price evaluation
e. Low Quote
f. Low quote indicator
g. Last entry indicator
h. Funds
i. Terms
j. Notes
k. Extensions
l. Matching quotes
m. Event  rules
n. Product specifications
o. Samples
p. Award of business

At the heart of it, this is common sense. Treat others as you would like to be treated. Unfortunately many companies don’t always follow this practice and as such, it negatively impacts the sustainability of their strategic sourcing program.

We look forward to and appreciate your comments.

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

« Older Entries
Newer Entries »