Archive for the ‘B2b Supply Chain’ Category

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.

 

Are you doing business with your suppliers “A” Players?

Tuesday, October 6th, 2015

 

Today’s post is our SafeSourcing. archives!

You can classify all employees in an organization into three categories: A, B, and C players. Should an organization strive for 90% of employees being ‘A’ players? No, a healthy distribution of A and B players is what an organization should strive for.

C Players– All employees generally start as C players due to their training and inability to bring a benefit to the company right off the bat. Genuine A and B players will not be C players long. They will eventually bring value to the company and move to an A or B player. The employees that remain C players will eventually be weeded out of the company.

B Players– B players can perform the tasks given to them well, but show no initiative to perform beyond average. B players show more loyalty to a company. In many cases B players are former A players, but do not want the responsibility anymore for whatever reason (age, personal, family, etc.). B players will complete the task given to them and with their loyalty will save companies money in hiring and training.

A Players– Everyone wants a company full of A players. A players are responsible and work to bring great benefit to the company. Sure they are experienced, motivated, and bring great benefits to your company, but how long will they stay satisfied? With the knowledge, motivation, and experience A players have it can be challenging for organizations to sustain their employment. A players find greater opportunities and their loyalty is far less than B players.

What players is your company searching for? You cannot run a company with only one type of player a successful organization will have a healthy balance of A and B players. Understanding who your A and B players are is an important key step.

We all work with the three different players from our suppliers and  we know it can be challenging to receive the results or information you have requested from a B or C player. If a company you are working with has not established  who their A, B, and C players are, then you could end up working with any of them for contract negotiations. At SafeSourcing we have an extensive SafeSourceIt™ Supplier database and  existing relationships with  the suppliers that will deliver the results you request. SafeSourcing finds the suppliers A players in order to bring value to your company from the outside.

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 and appreciate your comments.

Global Food Risks

Thursday, October 1st, 2015

 

Today’s post is by Michael Figueroa, Project Manager at SafeSourcing

This year alone California farmers are predicted to lose $3 billion due to persistent drought[1]. Avian Flu has cost nearly $3.3 billion nationwide in the US[2], while the resultant egg shortage continues to wreak havoc with the market by doubling egg prices[3]. Yields in North Korea are feared to come in as low as 50% below normal due to drought, which could pose huge humanitarian needs and market risks[4]. The average amount of arable land needed to support an American standard of living is approximately 10 acres per capita[5], though as of 2012 there were only between 0.49-0.6 acres of arable land on earth per capita[6]. The UN has stated that food production must double by 2050 in order to meet demand[7] due to rising population as well as rising global affluence. As the world population continues to increase the number of hungry mouths on the globe, it becomes ever more vital to have a strategy for dealing with disruption in food production markets.

Unfortunately, one of the greatest challenges to this problem is understanding what all of the potential risks are. As unpredictable weather patterns emerge, we are warned to expect the unexpected by the scientific community due to global warming, and political disruptions are equally unpredictable. Though there are recommended steps for discovering the unknown variables, and managing what is known.

Identify the risks: Does your organization have a risk mitigation department? One that focuses on proactive measures to ensure continued production in a crisis, not just financial hedging?


[1] “Drought May Cost California’s Farmers Almost $3 … – NPR.” 2015. 18 Aug. 2015 <http://www.npr.org/sections/thesalt/2015/06/03/411802252/drought-may-cost-californias-farmers-almost-3-billion-in-2015>

[2] “Bird Flu Cost the US $3.3 Billion and Worse Could Be Coming.” 2015. 18 Aug. 2015 <http://phenomena.nationalgeographic.com/2015/07/15/bird-flu-2/>

[3] “Egg prices in the US nearly double after outbreak of avian flu.” 2015. 18 Aug. 2015 <http://www.theguardian.com/us-news/2015/jul/16/egg-prices-in-the-us-nearly-double-after-outbreak-of-avian-flu>

[4] “North Korea fears famine as drought halves food production …” 2015. 18 Aug. 2015 <http://www.theguardian.com/world/2015/jun/19/north-korea-fears-famine-as-drought-halves-food-production-says-un>

[5] “The State of World Population 2011 – UNFPA.” 2011. 19 Aug. 2015 <http://foweb.unfpa.org/SWP2011/reports/EN-SWOP2011-FINAL.pdf>

[6] “Arable land (hectares) | Data | Table – The World Bank.” 2010. 19 Aug. 2015 <http://data.worldbank.org/indicator/AG.LND.ARBL.HA>

[7] “Food Production Must Double by 2050 to Meet Demand …” 2014. 18 Aug. 2015 <http://www.un.org/press/en/2009/gaef3242.doc.htm>

 

Coordinated risk management: Form alliances with national and international producers and brokers establishing protocols for responding to shortages that protect the most vulnerable populations from food shortages.

Identify the weaknesses in your supply chains: An example would be diversification of farm location can mitigate drought risk confined by geographical location.

Move to non-biofuel energy production: Using energy sources such as nuclear, solar, and wind allow farming capacity to be used for food instead of bio-fuels, which some studies have shown to be a net-energy loss product[8].

Early warning: Have mechanisms in place for capturing information regarding shortages and market disruptions.

Supplier resilience standards: If you are a purchaser, adopt requirements of your suppliers for managing risk that incentivizes food production resilience.

In the face of dealing with all of the food commodity disruptions in the market, and increasing pressure to shave already thin margins, it’s easy to lose sight of the fact that a major disruption doesn’t just mean loss of revenue, but can also mean loss of life within the markets of the most vulnerable consumers. For example, US food aid to foreign countries comes from US commodity surplus, but aid has decreased by 64% in the last decade due to reduced surplus[9]. This and many other examples are why it’s so extremely important for those of us working in the food procurement and production industries to build resilience into their long term strategies.

For additional insight on this topic I highly recommend the report by the UK-US Taskforce on Extreme Weather and Global Food System Resilience[10].

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.


[8] “Economic Cost of Biodiesel and Corn Ethanol per Net BTU …” 19 Aug. 2015 <http://www.ag.auburn.edu/biopolicy/documents/Economic%20Cost%20of%20Biodiesel%20and%20Corn%20Ethanol%20per%20Net%20BTU%20of%20Energy%20Produced.pdf>

[9] “Food Aid Reform: Food For Peace By the Numbers … – usaid.” 2013. 19 Aug. 2015 <https://www.usaid.gov/foodaidreform/ffp-by-the-numbers>

[10] “Extreme weather and resilience of the global food system.” 2015. 18 Aug. 2015 <http://www.foodsecurity.ac.uk/assets/pdfs/extreme-weather-resilience-of-global-food-system.pdf>

 

 

 

Understanding Disaster Recovery!

Tuesday, June 9th, 2015

 

Today’s post is from our SafeSourcing Archive.

No one ever likes to acknowledge the fact that sometimes unforeseen bad things happen in life.  Disaster strikes and we are left to try and pick up the pieces and recover.  In the corporate world disaster can take many forms and the companies that move forward the quickest after disaster strikes are the ones who find the greatest success.

Today’s blog is going to touch on a few of these areas and what you might be thinking about as you plan your strategies for handling disaster.

IT Disaster Recovery  – In today’s world where data is “king” disaster of the IT variety can be devastating to a company.  Having continuous availability to your company’s system and data is critically important and protection can come in three types of control measures.  Preventative measures are those strategies that focus on preventing events (Natural or man-made) from occurring in the first place. Corrective measures focus on the plan of attack once a disaster has struck.  Designating departments, contacts and individuals as part of the process is extremely important.  Detective plans have a primary focus on the detection and discovery of a potential disaster.  Many software solution companies can help provide this protection.

Building Disaster Recovery – Another area that can be affected by a disaster or emergency are your physical buildings.  When faced with an emergency many companies have not fully thought out how they will respond.   There are so many consulting companies who help companies plan for emergencies every day most of them focus on a similar process.  Develop your response plan, deploy the plan throughout the organization with support coming from the “C” level.  This deployment involves training of your staff and regular reviews and maintenance of the plan as your infrastructure changes.

Disaster Recovery Transportation Services – While not every company depends heavily on their shipping lanes, those that do understand how critical the availability of those is to their business and nothing affects them like natural disasters.  Develop a network of secondary and contingent shipping lanes that can step and take over within a moment’s notice.  As is the case with many contingent services, you will pay a premium rate, however it pales in comparison of the potential lost revenue a disaster can create.

Disaster Recovery Supply Chain – Going hand-in-hand with your shipping lane emergency planning is planning for alternate emergency suppliers.  When the earthquake hit Japan in 2011 many companies had no idea the affects the disaster would have on their business.  Manufacturers in Japan were shut down and items like Magnetic Tapes and Electronics suddenly became unavailable and US companies were left scrambling to find alternative sources.   Determining contingent supply sources plays a huge role in ensuring mission critical items stay available.  Many times online bidding events can help define these secondary and tertiary sources of suppliers.

For more information about how SafeSourcing can assist with connecting you with companies who can help with emergency and disaster planning, please contact a SafeSourcing Customer Service Representative.

We look forward to your comments.

Is it part of a good strategy to allow suppliers to pre bid in a reverse auction?

Friday, May 15th, 2015

 

Todays post is from Ronald D. Southard, CEO at  SafeSourcing

In the many industries, preliminary price quotes are normally used as part of a Request for Information (RFI) or Request for Proposal (RFP) process. The actual reverse auction event is normally the Request for Quote phase or RFQ and historically has been used for final price compression. However there are large events that may change this strategy.

In large retail events with hundreds of products such as a prescription drugs, retailers may allow early quoting just due to the magnitude of the information requiring entry by suppliers. There are however many other categories that might also benefit from this strategy. Transportation Lanes, Office Supplies (entire catalog), Safety Products, MRO and Waste Management come immediately to mind. This process can take place several weeks prior to the live reverse auction but in many cases today may actually happen within 48 hours of the actual compression event.

At times, this may also be a good practice when there are a large number of new suppliers participating in order to familiarize them with the use of the tool set beyond their normal training session. For a new supplier auction day can actually be a stressful.

There are many who don’t believe that there is a strategy to participating in a revere auction. Seasoned suppliers would argue that point. In fact, suppliers that use the SafeSourceIt™ eRFX system have a variety of ways to enter pricing including uploading spreadsheets and then downloading them immediately that contain low quote indicators. Suppliers can then focus on individual items, groups of items (lots and market baskets) and decile based category sets. In these large events, this allows suppliers to split the data entry amongst multiple analysts and enter pricing strategically.

Ultimately it’s the responsibility of the e-procurement providers to train all suppliers on the use of the tool set and its flexibility so that they can determine how they might strategically stage their input. That is of course if the solution provider has data entry flexibility as part of their toolset.

If you’d like to learn more about the SafeSourceIt™ family of creative sourcing tools, please contact a SafeSourcing Customer Services associate.

We look forward to your comments.

Are you getting ready to source bottled water?

Thursday, May 14th, 2015

 

Today’s post is from our SafeSourcing Archives.

Did you know there is a new technology that can produce clean drinking water out of humidity in the air? A new company, Quest Water, has successfully built and put in place the first system of this type in the South African country of Angola.

The system is called WEPS, Water Extraction and Purification Systems, and claims to be a pure source of water without exploiting current freshwater resources. It has a capacity to produce from 500 to 20,000 liters of water a day and does it without the use of chemicals or harmful by products. It uses solar-powered energy utilizing an array of photovoltaic solar panels along with purification and disinfection technologies.

Now I’m not suggesting that we will soon be seeing another type of bottled water on our grocery store shelves sitting beside spring water and purified tap water anytime soon, but I’m not ruling out the idea for some time in the future either. 

As you probably know, bottled water is big business. The International Bottled Water Association (IBWA), in conjunction with Beverage Marketing Corporation (BMC), released 2011 bottled water statistics showing total US bottled water consumption increased to 9.1 billion gallons, up from 8.75 billion gallons in 2010. The figure represents a 3.2% increase over 2010 which calculates to an average of 29.2 gallons of bottled water consumed for every person in America.

How do you maximize your profits from all of this bottled water success? Join other SafeSourcing customers who recently saved 20% on their name brand bottled water purchases. To find out more  please contact a SafeSourcing Project Manager. 

We look forward to and appreciate your comments

Communicating openly with suppliers is a key to high quality e-procurement events.

Thursday, April 2nd, 2015

 

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

We’ve all known for a while that our seat partners look over our shoulders to see who we are and what we do. I told him I was reading an Aberdeen business brief and who and what they do. I went on to explain that our company was focused on the use of  e-procurement tools for or customers. He introduced himself as a private business owner with his two brothers and that he had experience biding in reverse auctions with these tools.

We discussed SafeSourcing’s offerings and ultimately came around to what made e-procurement events successful for his company in the past as a prospective supplier and what would encourage them to participate again even if they did not happen to be awarded the business in a particular event. His take was that this was initially an educational process for their company and ultimately would become a way to do old things in a new way. He also suggested the following

1. Openly communicate with prospective suppliers
2. Make sure they understand everything and comfortable
3. Make sure they have no open questions.

With that as an understanding I offer the following list of sample questions one might consider when inviting a supplier as a new participant.

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 an e-procurement event such as? In fact, do they understand what a reverse or forward auction is?
a. Reserve Price
b. Proxy Volumes
c. Low Quote
d. Proxy quote
e. Funds
f. Terms
g. Notes
h. Extensions
i. Matching quotes
j. Event  rules
k. Product specifications
l. Samples
m. Award of business

At the heart of it, it comes down to something we all know but don’t always practice and as such negatively impacts the sustainability of processes that just make good sense. And that is that the supplier is your customer too and the customer comes first and should be treated the way you would like to be treated.

If you’d like to learn more about SafeSourcing’s  quality approach to supplier management during the eProcurement process and why our satisfaction rating is 99.999% with our vendor participants, please contact a SafeSourcing Project Manager

We look forward to and appreciate your  comments.

Even though your facilities looks safe, there are pests everywhere

Monday, March 16th, 2015

 

Today’s post is by Gayl M. Southard, Administration Consultant at SafeSourcing Inc.

When we built our home in 2003 in the Sonoran Desert, I quickly learned of new bugs/insects that I had never come in contact with.  Because we are on a desert preserve, and our neighborhood was a newly developed area, the scorpion population became disturbed.  The first year living in our new home, I would learn a lot about scorpions.  Out of necessity, I found a reliable pest control specialist.  He likes to be called “Tom the Bug Guy”.  He sprays my home monthly.

Scorpions don’t bite, but they do sting.  The Arizona Bark Scorpion is the most dangerous of the many varieties found in Arizona. The Bark Scorpion is light brown in color, and can range to be 2-3 inches long (stretched out). The sting is not likely to be fatal, or even to have long lasting effects. 

The venom scorpions have is used to capture their prey.  Not all scorpions have venom that is harmful to humans.  The sting can be very painful.  People that have allergic reactions to stings, or have underdeveloped or compromised immune system (the young and every old) may have strong or severe reactions.  Small pets may also have adverse reactions.

Scorpions enter homes in search of water and insects.  Therefore, it is prudent to rid your home of insects (i.e., ants, roaches, etc.) to keep the insect population down.  The perimeter of the home should also be treated.  The Bark Scorpion can be found in many places due to its ability to climb.  It can be found not only under rocks or in rock crevices, but also in trees or high on rock walls.  They can be found inside of people’s homes trapped in sinks or bathtubs, climbing walls, or in a dark closet.  Sealing your home is important as a scorpion can slip through an opening of 1/16”.  Caulk holes and cracks in your walls and baseboards.  Close windows tightly.  Get door seals to prevent scorpion entry.

A cat, or even chickens, can help keep the population down.  I don’t think my HOA will allow chickens! 

Scorpions are preyed upon by large centipedes, tarantulas, lizards, birds (especially owls), and mammal such as bats, shrews, and grasshopper mice.

Is your business in need of pest extermination? If you’d like assistance with your pest control needs, please contact a SafeSourcing Project Manager in order to learn more.

We look forward to and appreciate your comments.

What happens when your supplier forgets that you are the customer?

Wednesday, March 4th, 2015

 

Today’s blog has been written by Ryan Melowic, Senior Director of Procurement Process Improvement at SafeSourcing

Ryan comments that after contract negotiation, sometimes a vendor will forget who the customer is. This can be detrimental if it occurs in the quality of their perishable products.

When it comes to the quality of perishable products sold, it is important to have a quality check in place.  This is important when it pertains to perishable foods that don’t meet minimum standards and agreed upon expiration dates.  Without a quality check in place, there will be an opportunity with spoilage which will result in additional shrink then originally budgeted. 

Two of the most effected categories in retail grocery are produce and dairy.  Fresh produce is a minimum requirement or your customer.  Typically produce is one of the first products you see when you enter a retail grocery store.  It has to look great.  The relationship you have with your vendor is important.  Sometime vendors try to implement a standard reduction for spoilage credits which is the same across all stores regardless of their actual spoilage.  This standard helps some stores and hurts others.  In the world of retail grocery, every penny counts and it is important that all credits are accounted for properly by store location. With dairy, you are only getting 7 days to sell your products due to sell dates; therefore, you set yourself up for spoilage.  Vendors should be held to giving you at least 14 days to sell the product before spoilage. 

It is important to not allow your suppliers dictate to your company’s product expiration dates.  Regardless of the price set during negotiation and contract time, there was an agreement with the supplier that they would supply you quality products.  They need to be held to that agreement.

SafeSourcing does the due diligence to ensure all proper terms and specifications are included in the documents to set minimum standards and expectations.   These documents serve to remind suppliers of the quality and service expectation agreed upon at negotiation and contract time.

For more information on how SafeSourcing can help you with insuring fresh perishable products, please contact a SafeSourcing Customer Service representative.

We look forward to and appreciate your comments!