Archive for the ‘B2b Supply Chain’ Category

Shrinkflation?

Wednesday, June 15th, 2022

 

Today’s post is by Ronald D. Southard, CEO at SafeSourcing Inc.

In a recent post titled “How are you dealing with your overstock issues” Where I discussed using eprocuremnt tools to help reduce retail shrink. Then today I opened the paper and there it was Shrinkflation. Which is the Reduction in the size or weight of retail products, especially items of packaged food, with no corresponding reduction in the retail price. This improves financial results for the company with the expense born by the consumer who end up getting less for more.

In economics, shrinkflation is the practice of reducing the size or quantity of a product while the price of the product remains the same or slightly increases. In some cases, the term may indicate lowering the quality of a product or its ingredients while the price remains the same.

When I was studying Psychology in college out professor brought up the term Just Noticeable Difference or (JND). He asked us if anyone though that candy bars were getting smaller year over year. We all know the answer to that question, particularly if you ever trick or treated or now take your kids trick or treating. Those darn candy bars keep shrinking. So just what is a Just Noticeable Difference

According to Helensinblog on WordPress, Just Noticeable Difference, also known as the difference threshold, is the minimum level of stimulation that a person can detect 50-percent of the time.

For our senses, there is a measure called an absolute threshold. The absolute threshold shows that we can hardly see the difference in stimulus and are able to perceive its ability, and the difference threshold is that we cannot notice the difference, better known as the” Just-noticeable difference” (JND). For example, if you hold a bag of 100 pounds of oranges, plus a pound will not be noticed. But if you hold 5 pounds, then you add a pound, you will notice.

SafeSourcing is an eprocurement company that operates across multiple industries. As such we have specific experience in helping our customers source their products through a variety of tools. One of those is our SafeSourceIt™ Templates Library. Here we house thousands of specifications that have evolved over the years as products have changed. Having the proper specification is key to sourcing the correct products at both the manufacturing and the retail level. Take care of your customers the way they deserve to be. Don’t sell them less for more, they are already hurting enough.

To learn more, please contact a SafeSourcing customer services associate.

References: shrinkflation meaning – Search (bing.com)

Just-noticeable difference (JND) – Consumer Behaviour (wordpress.com)

Do the Right Thing!

Tuesday, March 8th, 2022

 

Today’s post is from Ronald D Southard, CEO at SafeSourcing Inc.

I normally try to write about three hundred words in my posts to provide sufficient detail regarding the subject covered. Today I will not because I have a simple question and a simple answer for you.

What should consumers in the United States that support Ukraine in their defense of their homeland against Russia’s Invasion do to companies that do not honor your personal desires, or those of the every other country on the planet?

EXAMPLE:

Shell Continues to Buy Russian Oil After Vowing to Stop Russia Investments

BY SCOTT MCDONALD ON 3/5/22 AT 8:47 PM EST

Answer: BOYCOTT all SHELL stations and stores in the United States.

 If you would like more information regarding SafeSourcing, please click the link.

131 Words! Enough Said! Do the right thing.

Trains, Planes and Trucks oh my!

Thursday, January 6th, 2022

 

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

This information still has some legs today in 2022 that may offer some guidance.

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

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

The price of shipping your freight by rail is relatively inexpensive and the volume of freight being shipped this way is projected to grow by half to $27.5B by 2040 according to an article in an dated issue of the Wall Street Journal titled Boom Times on the Tracks: Rail Capacity, Spending Soar. It’s even more true today in 2022.

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

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

If you like to learn more about how to optimize your shipping needs in 2022, we are assisting many companies with their shipping challenges.  To learn more, please contact a Safesourcing customer services account manager.

We look forward to and appreciate your comments.

 

Holiday Thoughts! Will There be Shortages this Christmas?  

Tuesday, September 21st, 2021

 

Today’s post is by Troy Lowe; Vice President of Development at SafeSourcing Inc.

There are rumors that there is going to be supply shortages this coming Christmas.  Because of this, you may expect to pay more for items that you can find.  A recent survey showed that about 82% of retail executives that were surveyed stated that that they were somewhat to very concerned about the shortages.  There are a lot of things impacting the supplies including understaffed factories, record high plastic prices and now there’s a shortage of shipping containers.  Experts say that the Covid-19 pandemic caused a reduction in the number of shipping vessels operating and that has led to fewer empty containers being picked up.  Because of this there are a lot of empty containers stuck at ports for long periods of time.  Also, there is a lot of congestion in key ports within the US which is contributing to lengthening the turnaround time for the containers.  Because of these issues, the time it takes to ship cargo from Asia to the US has almost doubled during the pandemic.  Below is a list of some of the items that may be in less selection and with higher prices.

  • Toys
  • Wrapping Paper
  • Gift Boxes
  • Gift Bags
  • Gaming Consoles
  • Televisions
  • Automobiles
  • Home Appliances
  • Clothes
  • Sneakers
  • Furniture
  • Christmas Trees
  • Meat
  • Candy Canes
  • Paper/Books
  • Actually Everything

Interested in learning how SafeSourcing can help your company run more efficiently?   If you would like more information on how SafeSourcing can help your procurement efforts, or on our Risk Free trial program, please contact a SafeSourcing Customer Service RepresentativeWe have an entire team ready to assist you today.

 

 

Effective Supplier Data Management Improves Procurement Process

Tuesday, July 6th, 2021

 

This may be old, eight (10) years in fact. Its still no less true today then it was then.

The following excerpt is from the above titled article.

There is more to an effective e-procurement program than cost reduction.

While buyers frequently record cost reductions in the range of 30% to 40% when utilizing an e-procurement or reverse auction process, the issues of quality and performance cannot be overlooked.

The foundation for successful e-procurement is the supplier database
that has been developed and is maintained by the e-procurement service provider. Significant time and capital investment goes into the development of an effective supplier database. It provides the buyer with a recognizable advantage in terms of classification of supplier capabilities, historical performance and the quality of the products provided.

The scope, accuracy and functionality of the supplier database are critical components for buyers when using e-procurement. These elements allow buyers to identify the best sources of supply quickly and cost-effectively, oftentimes uncovering alternative sources that were previously not even considered. This is one of the major advantages of including the services of an online reverse auction service provider like SafeSourcing in the procurement process.

Supplier data management is an excellent example of pairing technology advancements with intellectual property to produce an effective, economical support tool that benefits both suppliers and buyers – better pricing, better quality and better sources of supply.

Click here in order to view the entire article.

We look forward to and appreciate your comments.

Avoiding the fallacy of the single cause.

Friday, May 21st, 2021

 

 

Today’s post is from our  SafeSourcing Archives

Procurement projects will of course come in all shapes, sizes, and levels of complexity. Rarely is any single facet of a project determined by only “top-down” variables. Any one part is more likely influenced by a three dimensional layout of different variables, all of which can determine the outcome of the greater whole. But how can all of these intricacies be accounted for, without complicating the project so greatly that it becomes unmanageable? Here are three tips for managing complexity:

  1.  Honestly identify complexity: Don’t close your eye’s to the reality of the project and pretend that it’s simpler than it really is. Admitting that  your value chain is non-linear is not conceding defeat, it’s setting you up for identifying your criteria for success (Be similarly honest with identifying your constraints/bottlenecks).
  2. Consolidate complexity early (accelerated vs delayed differentiation): In supply chains that start with homogenous parts, differentiation should come late in the chain, but the opposite is true for outputs that begin with high complexity. If you consolidate complexity by identifying requirements, scope, and expectations of variables that lead to the single end product, it will keep you from having to break out the constituent parts.
  3. Leverage the entire value proposition: Build into your project the ability to negotiate details based on the full value of the project. For example, make it clear that if a vendor wants to find loopholes that diminish the value of their original quote, that you will be awarding the vendor with the best overall value proposition, not the one who presents a polished picture and adds all manner of hidden fees.

For more information on how SafeSourcing can assist your team with your procurement projects 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.

The Geographical Significance of Vendor Selection

Tuesday, May 4th, 2021

 

Today’s post is the SafeSourcing  BLOG Archives.

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

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

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

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

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

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

For more information about how we can assist you with developing these supplier selection strategies, please contact a SafeSourcing Customer Service Representative.  We have an entire customer services team waiting to assist you today.

We look forward to your comments

Have you ever played liars poker?

Friday, April 9th, 2021

 

Today’s post is from Ron Southard, CEO of SafeSourcing Inc.

I was just re-reading some of my old posts and came across this one. You know what? It’s still true!

So, when SafeSourcing in 2021 says it has 5 suppliers (think 5 Aces)  because it does.

Locating, managing and updating supplier information for companies you may choose to do business with has never been more difficult. How many former suppliers from let’s say 4-5 years ago are no longer in business? How many newer companies have evolved or taken their place? I already know the answer you are going to give me. It’s I don’t know.

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

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

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

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

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

If you’d like more information on the SafeSourceIt™ Supplier Database of nearly 500,000 cleansed global sources of supply, please contact a SafeSourcing customer services account manager.

We look forward to and appreciate your comments.

 

Am I really married to my procurement job?

Wednesday, December 2nd, 2020

 

Today’s post is from our archives at SafeSourcing Inc.

My boss always asks me if this is just a job for me or a career that I am committed to.

It was not until I had successfully walked down the aisle and had the perspective of hindsight that I really understood how the disciplines we practice every day at SafeSourcing on behalf of our customers helped to guide the success we achieved in our wedding.

I can tell you that there is nothing more stressful than planning a wedding, especially when it’s your own, and as I’m sure is the case for most young couples, on a limited budget. There are so many things that need to be done for a wedding that you start to lose sight of the big picture. I will give everyone a new pros tip, visit as many catering companies as you can because the free food defiantly helps with the stress!

I’ll bold and italicize some of the steps we followed that correlated directly to my job (err) career.

During the process I figured out that the best way to organize (Strategy) our efforts was to create a lifesaver General Ledger (detail,detail,detail…) that would let me to track everything that we were buying (strategy) for our wedding. My wife and I listed everything (specifications) that we needed to have and started filling in the blanks (research) from there. Key to my success was this organization, and it helped me trim out high price quotes from the equation and pick the best price along with our best impressions (other services) from every vendor we interviewed (double check the data) Better yet, we came in under budget (results).

OMG, it may be subliminal but maybe I am really married to my procurement job.

At SafeSourcing, we have a process that will get everyone’s quotes all in a view that you can easily compare the prices and additional deliverables for purchase. Our reports are easy to follow and assist companies in making their best decision. The vendors in our SafeSourceIt™ Supplier Database are already prequalified to receive your business. 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.

What is the Government Procurement Agreement or GPA?

Friday, November 20th, 2020

 

 

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

The GPA is a plurilateral agreement within the framework of the WTO, meaning that not all WTO members are parties to the Agreement. At present, the Agreement has 20 parties comprising 48 WTO members. 36 WTO members/observers participate in the GPA Committee as observers. Out of these, 12 members are in the process of acceding to the Agreement.

The fundamental aim of the GPA is to mutually open government procurement markets among its parties. As a result of several rounds of negotiations, the GPA parties have opened procurement activities worth an estimated US$ 1.7 trillion annually to international competition (i.e. to suppliers from GPA parties offering goods, services, or construction services).

The GPA is composed mainly of two parts: the text of the Agreement and parties’ market access schedules of commitments.

There has been some discussion that the current administration would like to pull out of this agreement even though the Is was a founding member.  In an article by Doug Palmer  for Politico and reported on MSN News titled Senators urge Trump not to withdraw from Government Procurement Agreement as there is a belief that it will allow both China and Russia to fill the void created by the US no longer participating.

Please visit SafeSourcing in order to keep up with content the evolution of changes and other educational content that impact procurement professionals and knowledge workers.

References……………………………………………………………………………………

  1. https://www.wto.org/english/tratop_e/gproc_e/gp_gpa_e.htm
  2. https://www.msn.com/en-us/news/politics/senators-urge-trump-not-to-withdraw-from-government-procurement-agreement/ar-BB1bb2zv?ocid=msedgdhp