SafeSourcing Blog

Today’s post is from Michael Figueroa an Account Manager at SafeSourcing

Most human beings are averse to ideas that go against conventional wisdom. Yet, usually the most successful innovations come from ideas that of course, go against conventional wisdom. Alexander Graham Bell was told nobody would want to use and idiotic device like the telephone by the companies he pitched his ideas to. Arnold Schwarzenegger was told he was too big and had too thick an accent to get anywhere in the movie business. Andreas Pavel’s ideas for a portable music player were rejected 5 years before the Walkman when he was told nobody wanted to walk around in public with headphones on. We have a natural tendency to reject those ideas that exist outside of the status quo.

A 2011 study entitled “The Bias Against Creativity: Why People Desire But Reject Creative Ideas” suggested that even those who have creative thinking as a goal are much more biased against creativity than they realize. The reason for this the study goes on to explain, is that all human beings have an innate bias toward ideas that represent uncertainty. At its core, a creative proposal is an idea that breaks the rules; social, procedural, or otherwise. So how else is your organization going to ever be able to fully capture productive creativity (innovation) without incorporating mechanisms that force innovations to go through a vetting process? Innovation might be your ideal, but without a plan, is it ever going to be your reality?

Many businesses claim to foster an “environment of innovation”. But this environment is only going to be as much of a fertile ground for new ideas as its leadership’s own blind spots. Don’t think you have any blind spots? Well, that’s why they’re called blind spots    And without a mechanism or a process that forces leadership to engage uncomfortable ideas, the BUSINESSES innovations will forever be limited by the leadership’s PERSONAL patterns of thinking.

It’s been said that significant change within a business can only be accomplished by business guerilla tactics, by being willing to throw some informational grenades behind the enemy lines of workplace apathy before the culture will engage the forces of change it needs to face. These disruptions can be good for business if handled correctly, but expect some resistance. Without mechanisms in place to capture and squeeze the value out of new ideas, you can almost always expect them to go nowhere.

Some companies balk at the idea of using eNegotiation tools to meet their procurement needs. It’s different, it’s new, and it takes a little bit of study to understand. Forget that it’s also proven. But that’s why we love to engage new clients and suppliers, because we have the methods and track records in place to show why this unconventional idea also has above conventional results.

If you’d like help with your sourcing needs, please contact a Safesourcing customer services account manager.

We look forward to and appreciate your comments

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

According to Wikipedia, in general usage, complexity tends to be used to characterize something with many parts in intricate arrangement.

Definitions are often tied to the concept of a set of parts or elements which have relationships among them differentiated from relationships with other elements outside the relational regime.

So how does one define a complex e-negotiation event? On the surface it may be an event with a large number of line items within a particular product set such as MRO or Fleet Maintenance in the distribution space or raw materials used to manufacture components that require special handling, shipping and standards adherence. The amounts of the total spend for an event really has nothing to do with the complexity of the event. The complexity is determined by the data points requiring management in order to drive the best possible value to the buyer and the supplier.

This author would suggest that any event including multiple market baskets, thousands  of  SKU’s all with different specifications, order quantities, delivery locations, multiple suppliers not bidding on each line item, a split award of business and the size of the spend and optimization scenarios qualifies as a complex event. Adding to the complexity may be the overall strategy required when sourcing the right mix of suppliers to compress pricing properly and drive early and consistent bid activity. This can be further complicated by trying to determine the correct decile based sourcing strategies for the event and including product affinities where they make sense. And that sometimes means they may not make sense. Think of the old examples of baby diapers and beer sales going up on Saturdays and being purchased by men. Do you know why? It’s an old example of big data. Think sports?

The above example would qualify as organized complexity where there is a non-random, or correlated, interaction between most of the parts. In order to support  complex events, your e-procurement solution provider needs to have an understanding of the specific market place, practices and processes in place that allow them to drive these activities in order to bring complex events to market  in the shortest period of time. Generally this should occur within less than three to five weeks from event notification to event completion.

Last year, this author tried to define the relative complexity of the retail environment and its potential impact on the use of e-procurement tools. Specifically we identified the following areas of interlocking complexity.

1. Supply Chain complexity.
2. Rate of change in the global supply chain.
3. Long term inherited supplier relationships.
4. Lack of Accurate data.
5. Dysfunctional ERP systems
6. Lack of retail procurement staff.
7. Lack of time.
8. Multiple sources of supply.
9. Limited view of new sources of supply.
10. Confusion as to who’s the customer and who’s the supplier
11. Sales People
12. Third Party Providers
13. Collaboration complexity.
14. Lack of an integrated view of the category spend
15. Not understanding the relationships or affinities of your products and services.

Being comfortable that your solution provider understands your market place and has a well defined process for hosting Complex e-negotiation events insures that they are not difficult to host and drive a well summarized and optimized result set.

If you’d like to learn more about sourcing complex categories, please contact a SafeSourcing customer services account manager.

We appreciate and look forward to your comments.

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Today’s post if  by Heather Powell a  Project Manager  at SafeSourcing, Inc.

Are you looking for ways to bid a construction job but don’t know how to easily trim costs.  Do you have a favored supplier of your construction materials, but see their pricing is getting higher year after year and you think that you have limited options?

There are couple ways to get your costs down:

First would be to run a request for proposal (RFP) in order to qualify new potential suppliers and their capabilities to support your needs. You will also be able to verify specific pricing relative to materials or to be used during the job.

• Your RFP should be specific to the project you are working on. As an example, if you are sourcing a new roofing project or replacement roofing, then you could invite local suppliers from the area where the job is to be completed as well as the big national suppliers. Supply all with the same exact detail relative to framing/studs, the type of membrane materials, the insulation type, flashing, piping, ladders, lightning protection etc.
• From the completed RFP you will be able to choose a primary supplier and possibly a secondary supplier to work with based on their submission of information and pricing within your RFP.

Secondarily you might also run a request for quote or Reverse Auction in order to compress pricing based on all of the specifics submitted through the RFP from the general contractors or run a more specific RFQ targeting the higher pricing from the RFP, which could items such as labor or material costs.

• As an example, using the roofing scenario, you might choose to run an RFQ on membrane materials only from the manufactures to be used by the general contractor.

By running these e-procurement events you will be able to choose the best qualified supplier with the best pricing as well as present that supplier with your best priced manufacturer of the membrane materials.  The combination of these two types of events will provide you significant savings on two specific fronts within the same category, and resultantly lower your overall construction costs.

The roofing example is just one of many areas within the construction category in which SafeSourcing can reduce costs and aid increasing profitability.

If you would like to learn more, please contact a SafeSourcing customer services representative.

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According to Supply and Demand Chain Executive, Honoring the supply chain’s best and brightest, Supply & Demand Chain Executive’s “Pros to Know” include professionals proactively working to improve their business’s functions in a number of categories—including manufacturing and production output; procurement; logistics; risk mitigation strategies; sourcing; financial operations; packaging and distribution; transportation; and much more.

Now in its 13th year, the Supply & Demand Chain Executive “Pros to Know” awards recognize both ends of the supply chain. This includes honoring the “providers,” which includes individuals from software firms, service providers, consultancies or academia who helped their supply chain clients or the supply chain community prepare to meet industry challenges. This also includes honoring the “practitioners,” e.g., those supply chain executives who demonstrated leadership by managing risk in the supply chain; provided competitive advantage; and delivered value to the bottom line.

SafeSourcing winners include the following.

1. Ronald D. Southard, Chief Executive Officer
2. Mark  A. Davis, Sr. Vice President and COO
3. Deborah H. Wilcox, Vice President of Marketing and Professional Services
4. Ryan J. Melowic,  Assistant Vice President  Procurement Center Of Expertise

We are very proud of our team’s award winners for 2013 and endeavor every day to provide the type of service our customers deserve that results in such awards.

To speak with one of our pros please contact a SafeSourcing customer services account manager.

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Please enjoy today’s guest post from Michael Figueroa and account manager at SafeSourcing.

If you live in the USA, you are probably accustomed to having an extremely high level of autonomy in how you shape your daily existence with the choices you make. Our entire culture has great emphasis on freedom, and not just in the areas of life, liberty and the pursuit of happiness. Peripherally, we sometimes grandfather this concept into the areas of freedom to choose user experiences, social networks, flavors, styles, displays, and information inputs. Living in the information age has left us more options to choose from than we often know what to do with. There is so much information available in fact, that Google, Microsoft and others, some of the biggest companies in the world, afford their existence off of our need for someone to help us aggregate our information.

There are many opinions about what will come after the information age, though a common theme around most of them is prioritization, organization, and clean-up.  Theories about this “clean-up age” revolve around the recognition that our extreme availability of choices can have high costs for those who haven’t been given the tools to manage it. We have no shortage of problems or information about them, but have not necessarily been taught the logic skills to understand, given the algorithms to sort and identify, or focused on the vision necessary to prioritize.

This overflow of options and lack of direction creates a situation in which we have high opportunity cost. When we only have one choice, we don’t have the opportunity to be disappointed with our choice because there was no better alternative. But sometimes we make decisions and realize after the fact that there was a better alternative. Sometimes the array of options is so huge and complex it is overwhelming, and the decision making process itself is costly, especially when decisions are made out of exasperation instead of deliberation. The more opportunities we have, the greater potential we have to achieve satisfaction, and conversely, the most potential to feel unsatisfied with the choices we make after the fact.

Some of the major considerations we make at SafeSourcing when analyzing purchasing data are;

• What are the client’s objectives

• What are the common denominators

• What is the baseline

This allows us to provide information in a format that is relevant to the project, establish commonalities for side by side comparison, and understand where that takes us in comparison to our starting point. The result is changing information from being paralyzing, to information that is actionable. We take the costly array of choices you have from being dangerously unknown, to understandable for what sourcing choices can be Safe.

To learn more about sourcing safer products and services please contact a SafeSourcing customer services account manager.

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This post is from Ronald D. Southard CEO at SafeSourcing.

I have posted a number of times over the last five years on the supposed benefits of Offshoring, Nearshoring and now Reshoring or Backshoring. I’ve even taken a look at the environmental impact of offshore tonnage being shipped via ocean bound freight and the resulting impact to our collective carbon footprint from that freight and the diesel they use. Interestingly, it is greater than the damage from all of the emissions of all the cars in the U.S. combined. I have even discussed the creative use of containers that were no longer being used at one point because of the cost to reship them. In fact some of them have become creative housing projects while others were just melted down.

I like detail, and I’m not sure if we looked at all related costs of offshoring in the first place would have made as much sense if in retrospect we had all of the information available to us today (Big  Data; UH!).

So now  companies are pursuing reshoring or backshoring because the cost of producing products  in places like the Asia Pacific region are going up substantially as the emerging middle classes in those areas are demanding better wages, benefits and work conditions.

I was reading a survey  in the USA TODAY MONEY section attributed to  Schneider Associates that indicated that the statement “Made in USA” being the most influential attribute when buying a new product had increase from 48% to 62% during the period of 2008 to 2012. That’s a 29% increase in 4 years. And, it indicates that almost 2/3 of the respondents agree. That is a big number as companies try to increase their wallet share from their top decile customers. Quite frankly, we do not have companies ask us very often any more if we can bring in suppliers from off shore to participate in eRFX events for products and raw materials. This can only mean that these companies are in fact reading their tea leaves (customer data) and doing as their customers ask. The answer is BUY AMERICAN! And that should include Mexico and Canada which after all are part of America and benefit with the U.S.  from our NAFTA arrangement.

If you’d like to learn more about how SafeSourcing can help you find sources of supply in North America that you may not be aware of, please contact a SafeSourcing customer services representative or visit our SafeSourceIt™ Supplier data base query tool.

We look forward to and appreciate your comments.

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