Archive for the ‘Business Sourcing’ Category

How do you choose a new supplier?

Friday, November 17th, 2017

 

Today’s blog is by Margaret Stewart, Manager of HR and Administration at SafeSourcing Inc.

After several devastating hurricanes, the United States is in the cleanup, recovery, and rebuilding process for those areas hit worst. One notable area was the island of Puerto Rico, which was hit by multiple hurricanes, damaging a multitude of structures throughout and leaving the majority of the island without utilities. Because of this devastation, companies were sought to organize and begin the rebuilding of some of the necessities, like water and power.

One particular company, Whitefish, was contracted to begin the power grid restoration for the island, a contract worth hundreds of millions of dollars. However, whether through oversight or intentional, this company, based in rural Montana, had no experience with projects of this size and, in fact, only had two employees. After that information was made public, the contract was ultimately cancelled and eventually awarded to another, larger company. The aftermath of this award of business, however, was a lengthy delay in the rebuilding process at a time when fast response could literally save lives.

While choosing a new supplier of your own may not have such an impact on millions of people as the situation in Puerto Rico, choosing the wrong one can still have a large and negative impact on your organization as a whole. This could mean additional time spent processing orders, paying a higher price until agreements are made or reviewed, or even legal fees involved if a contractual dispute occurs.

This is why it is highly important to not only research any potential suppliers ahead of time, but also to vet those suppliers. At SafeSourcing, we go to great lengths to ensure all the right suppliers are included for projects that you may consider running, and exclude those that do not meet the high standard we expect.

For more information on how SafeSourcing can help with your sourcing needs, or on our Risk Free trial program, please contact a SafeSourcing Customer Service representative. We have an entire team ready to assist you today.

We look forward to and appreciate your comments.

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Reduce Capital Expenditures

Wednesday, November 15th, 2017

 

Today’s post is by Dave Wenig, Vice President of Sales and Services at SafeSourcing.

Many of our clients find great success in significantly reducing their indirect spend. The typical expense categories that are sourced are always winners and are often the first categories that come to mind when selecting which categories will be sourced using eProcurement tools. As nearly all of our clients know from first-hand experience, these categories have earned this reputation for good reason. The average savings for Supply categories, for example is in excess of 21%. This is relatively well known and is only the start of what is truly possible with eProcurement.

What is less known, and too often overlooked, is that this same eProcurement methodology can very easily be applied to your capital expenditures. At a time when many of our clients are preparing for the coming year, I wanted to point out that you should not forget to leverage eProcurement for your capital expenditures.

At this point, you may well have a very clearly defined sourcing plan in the form of next year’s budget. My suggestion is simple – remember to review that identified spend with your eProcurement provider. You’ll be glad you did.

I would encourage you to also keep an open mind as you decide which of these capital expenses you would identify for eProcurement. You might be surprised to know that our clients have had success in areas where most clients don’t even consider. In one example, we were able to successfully take just one panel van out to market as an RFQ. Inside of days, the client saved many times more than could ever be saved negotiating with dealers using traditional methods. In another example, we achieved 30% savings on two towable generators.

Many of our clients, whether retailers or otherwise, will be working on construction such as opening new stores and remodeling old stores in the coming year. I propose all of that related spend should be sourced using eProcurement. If it is not competitively sourced, you will overpay. Before you build that new carwash, you should know that we do that too. Recently, we achieved over 10% savings on the building and over 34% savings on the installation portions alone for a client.

In this short post, I’ve listed only a few examples out of many, many more and I have not even mentioned your cost of goods or cost of sales. I hope, however, that my main premise was clear. If you have budgeted for capital expenses, you should consider eProcurement to reduce the cost of those expenses. You’ll likely find that you’re able to accomplish much more in the next year based on the savings generated by eProcurement.

For more information, please contact SafeSourcing.  

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Milk Does a Body Good

Tuesday, October 31st, 2017

 

Today’s post is by Gayl Southard, Administrative Consultant, SafeSourcing.

Chances are your parents and grandparents grew up with one type of milk- -cow’s milk. Today there are many types of milk to choose from.  The question is what type of milk are you looking for?  Are you trying to cut fat?   Are you lactose intolerant?  Are you concerned with the sugar content?  Milk can be a tricky question.  The following are different types of milk offerings:

  1. Cashew Milk. Cashew milk is very similar to almond milk. It is approximately 40 calories per cup and 3.5 grams of fat. It is often fortified with vitamins D, B12, and A. The drawback is that is low in protein.
  2. Coconut Milk. Coconut milk has become a healthy fat and protein in recent years. It has a unique flavor and is typically low in calories. It is higher in fat than other types of milk, and can be higher in sugar, unless it is unsweetened. It often comes without protein.
  3. Goat’s Milk. Goat’s milk was one of the first alternatives to cow’s milk. It is high in protein, but is also high in saturated fat. It is similar to whole milk. It is packed with a lot of nutrients, including magnesium, potassium, and vitamins A and C. It also comes fortified with vitamin D.
  4. Hemp Milk. Hemp milk is made from hemp seeds. It is a rare milk and high in omega-fatty acids. It provides more iron than cow’s milk. It is low in protein. It is best to look for unsweetened hemp milk fortified with vitamins A and D.
  5. Almond Milk. Almond milk has become very popular. It is a lactose-free alternative that has more vitamin E than cow’s milk. It is found in a variety of flavors and is low in calories (30 calories per cup if unsweetened). It is low in protein compared to cow’s or goat’s milk.
  6. Cow’s Milk. Cow’s milk is very high in protein and provides calcium, vitamin D and phosphorus. It is high in protein, keeping you feeling full for extended periods of time. The drawbacks depend on the type of milk selected- skim milk contains no fat, while whole milk is full of saturated fat (eight grams of fat per cup).
  7. Soy Milk. Soy milk is the original alternative to cow’s milk. It is popular with people that are lactose intolerant. It is low in fat, high in protein, and often fortified with vitamins A, B, and B12. Look for varieties that haven’t been heavily sweetened.
  8. Flax Milk. Like flax seeds, flax milk is high in fiber and omega-3 fatty acids. It is typically low in fat and calories. It can also be high in protein. Avoid the flavored varieties as they are heavily sweetened which also ups the sugar content.

SafeSourcing regularly sources milk for a variety of companies. For more information on SafeSourcing and how we can help you with your sourcing needs, or on our Risk Free trial program, please contact a SafeSourcing Customer Service representative. We have an entire team ready to assist you today.

Emily Lockhart, Active Beat, 3/15/2017

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Where does your money go?

Wednesday, October 25th, 2017

 

Today’s blog is by Margaret Stewart, Manager of HR and Administration at SafeSourcing.

Any business has to tackle the financing issues, whether it’s payroll, marketing, or overhead. While some expenses, like payroll or overhead, cannot be easily reduced, other expenses of a business can be reduced without losing anything in return. This is when a procurement partner can help.

Procurement partners can work with a company and finance teams to determine which areas represent the largest expenses within a company and which areas could see the most savings. The goal is to take an category that is already purchased and will continue to be purchased, and source a better value for the business.

Choosing the right procurement partner can make a big impact on the success of your sourcing projects. Having a dedicated and reliable team who are always willing to put in the extra work can be the difference between uncertainty and peace of mind. A company like SafeSourcing has the experience, dedication, and skills to help in any sourcing project your company may seek. In addition, SafeSourcing offers tools that can make the process run more smoothly  making things easier for your team.

For more information on how SafeSourcing can help with your sourcing needs, or on our Risk Free trial program, please contact a SafeSourcing Customer Service representative. We have an entire team ready to assist you today.

 

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Dollars and Sense

Friday, October 20th, 2017

 

Today’s post is by Dave Wenig, Vice President of Sales and Services at SafeSourcing.

Many (most) of the topics featured on this blog focus on eProcurement and the savings generated by the use of it. Today’s blog certainly follows that theme, but with a bit of a twist. As you might have gathered from the title, I’ll dig more into when and why it makes sense to use eProcurement to achieve your savings objectives and other goals.

Timing 

When you have been doing business with a vendor for an extended period of time, typically at about three years, it is time to assess the market conditions. One of the best ways to do so is through eProcurement. Over time, vendors will very naturally work to improve their margins. eProcurement works by keeping those margins within reason based on competitive levels.

Cost Avoidance 

The day you receive that notification of an unwanted price increase is the day you should prepare to take that category to market. Often, our clients receive two benefits in this case. One, their pricing is reduced as compared to the new increase from their incumbent. Often, this pricing is even better than the old price. Two, often, new vendors will offer more favorable terms such as fixed pricing or other terms to help avoid costly increases in the future.

Quality or Supply Chain 

Another common reason for leveraging eProcurement is quality issues or issues or interruptions in your supply chain. These type of issues typically warrant a fresh look at alternate sources of supply. eProcurement will satisfy this need and take the additional step of providing compressed pricing from well vetted alternatives to your current source of supply.

There are many times when eProcurement makes good practical sense as well as financial sense. If you find that any of these examples ring true, reach out to us here at SafeSourcing and we’ll help you understand your options.

Sometimes, savings dollars just makes sense. We look forward to your comments.

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Nested if/then Statements for Everyday Use

Thursday, October 19th, 2017

 

Today’s post is by Mike Figueroa, Assistant Director of Customer Services at SafeSourcing

Most problems don’t have solutions as simple as yes or no, such as “if A, then ‘yes’. If B, then ‘no’”. Solutions are more often evaluated through multiple sets of dependencies, such as “if A+B is greater than C, then find the average of X-Z”. Of course these statements aren’t intuitive, so if we don’t understand how to use them formally in logic equations or computer code, we are much less likely to get them right in real life situations. So here’s a crash course in Excel “IF” statements:

The basic description of the “IF” function is “If something is True, then do something, otherwise do something else”. To see it in action, start with typing “=IF” in an Excel cell of your choice. You’ll see Excel suggest the full formula as “=IF(logical_test, [value_if_true], [value_if_false])”. Each of those statements within the parentheses is a variable that does something specific, and they have to be separated by a comma so that Excel knows when you are entering a new variable. Here is how each variable behaves within the function:

  • “logical_test”: This means there must be an active function. Let’s go with an example of “A1>B1”.
  • “value_if_true”: Whatever value you include in this variable, will populate the cell you’re programing the formula for, if the “logical_test” variable is true. Such as if A1 = 2, and B1 = 1.
  • “value_if_false”: Whatever value is in the false variable, will be populated if “logical_test” is untrue. Such as if A1 = 1 and B1 = 2.

So if we insert some example variables into the formula like so: “IF(2>1, “Yes”, “No”)

This function would insert a “Yes” into the cell being programmed, and is one of the more simple ways to use the function. However, you can swap any of the aforementioned variables for other formulas as well. This is called “nesting”.

For example, you could write a formula like this: “=IF(K5<K6,”YES”,IF((COUNT(H7:H10>2)),”HIGH”,”LOW”))

Let’s describe what this function is doing in sentence form, with a context of evaluating vendor proposals: If Vendor 1’s cost is lower than Vendor 2’s cost, enter “YES” into the cell, if Vendor 1 is not lower than Vendor 2, then if the number of DC’s the new vendor carries is greater than 2, enter “HIGH” into the cell, otherwise enter “LOW” into the cell. This tells me either to select Vendor 1, or to evaluate several other dependencies to make a final decision.

This level of specificity is not normal in everyday speech, but is absolutely critical in procurement. If you have a vendor proposing an agreement, a full evaluation of the value proposition can’t be based on just one variable. Practicing this and other logic functions in Excel and other tools is an excellent way to hone your ability to evaluate complex procurement problems.

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.

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Overcoming Procurement Mistakes

Wednesday, October 18th, 2017

 

Today’s post is by Robert Rice, Account Manager at SafeSourcing.

Yes, mistakes happen and are part of any purchasing process; but with right tools from the right company, those mistakes can be diminished greatly. Here are 10 of the most common mistakes made in the world of purchasing.

Mistake 1: Not understanding the philosophy, needs and motivations of the procurement organization. Price is important, but other factors count too. For example, in this tough economy, procurement may be pushed hard to implement and obtain immediate cost discounts or cash-flow improvement. This may give you an opportunity to lock in business with better payment terms immediately, while a competitor may require lengthy qualifications.

Mistake 2: Not developing a written specification for vendors to bid on. The specification needs to state your goals, a detailed description of what you’re purchasing, the terms you require, a maximum quote, and when you need responses back.

Mistake 3: Assuming the procurement department knows your value plan. If the department is considering two widgets, and one is $400 and the other is $800, then the $400 tool wins, right? If the widgets are measured on cycles before replacement, the $800 tool is the clear winner. If the procurement staff doesn’t understand this, the $400 tool wins.

Mistake 4: Buying based on price alone can have a reverse effect on your net gain. The cheapest product or service isn’t always the best choice. You may end up having to replace a piece of cheaper equipment or have more maintenance costs if you would have spent a little bit more money and received better quality. Or the initial cost is very low, but after the purchase you find out additional fees that start to add up. Evaluating all costs is the best way to ensure you are getting the best deal.

Mistake 5: Thinking reverse-auction award decisions are based only on price. In most reverse auctions, price is not the only factor clients consider. If the client doesn’t publish that the “lowest bidder wins,” then, in most cases, factors other than price are used in the award decision. Vendors that only sell on price are bound to lose.

Mistake 6: Not acting quickly to pass on commodity-driven cost increases. If a vendor is selling a product that has a cost structure that is significantly impacted by the cost of commodities, then you need to act quickly on pursuing price in the rising market. Procurement professionals will be more receptive to your passing on the commodity increase while the markets are still high – especially if they can pass it onto their customers. Once the markets fall, price increases will be resisted.

Mistake 7: Not capturing price by using your ability to help manage your client’s risk through material hedging, managing inventory, etc. For example, say the vendor sells stretch wrap. The client is concerned about future price increases due to unstable stretch wrap prices. You can get a premium price if you can help alleviate the risk by providing a fixed price that relies on your ability to hedge your stretch wrap purchases.

Mistake 8: Taking a misguided view of strategic partnerships. Your partnership is not an entitlement to getting the best price. The greatest benefit to the vendor is a stronger position to keep the business by locking in clients over time. You have worked hard to be named as a strategic partner, but now is not the time to rest. That partnership provides you an opening to create strong relationships with the executive staff and their purchasing department. Creating those relationships will pay big benefits when your competition tries to unseat you.

Mistake 9: Not getting involved in the client’s new projects. By helping them understand a procurement approach that saves them time and money, you can create a win-win relationship.

Mistake 10: Don’t skimp on research. You should know the basics, price range, your requirements, and the names of vendors that can provide the product or service and how long the purchasing process usually takes. You can’t afford to waste time contacting vendors that cater to small businesses if you are a big company.

You need to ask yourself, “Do I have the time and or manpower to do this?” Everyone one of these mistakes can be avoided if you develop a partnership with SafeSourcing. We have the e-Procurement tools and knowledgeable staff at your disposal ready to save you time and money.

Robert, or any member of the experienced team at SafeSourcing would be happy to discuss how SafeSourcing can help you with your eProcurement planning. For more information, please contact SafeSourcing.

We look forward to your comments.

 

 

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Grease Traps

Tuesday, October 17th, 2017

 

Today’s post is by Gayl Southard, Administrative Consultant, at SafeSourcing.

I worked at a cooking school for seven years, several as the Assistant Director. The school was located in an outdoor mall with a busy restaurant located right beside it.   One night while a cooking class was in progress, the grease trap backed up and the floor was soon covered in water and muck.  What was interesting, the students continued to prep and cook acting like nothing was going on.  We ended up closing the kitchen and giving out rainy day vouchers.

What is a grease trap (also known as a grease interceptor, grease recovery device and grease converter)? It is a plumbing device designed to intercept most greases and solids before entering a waterwaste disposal system.  Wastewater contains small amounts of oils which enter into treatment facilities and septic tanks that form a floating scum layer.  A scum layer is slowly broken down and digested by microorganisms in the anaerobic digestion process.  Large amounts of oil from food preparation in restaurants can overwhelm a treatment facility or septic tank, causing the release of untreated sewage into the environment.  High-viscosity fats and cooking grease, such as lard, turn into solids when cooled.  When these solids combine with other disposed solids, the drain pipes block.

Grease traps have been in use since Victorian days. Nathaniel Whiting obtained the first grease trap patent in the late 1800’s.  “These reduce the amount of fats, oils and greases (FOGS) that enter sewers.  They are boxes within the drain that flow between the sinks in a kitchen into the sewer system.  They only have kitchen wastewater flowing through them, and do not serve any other drainage system, such as toilets.”1   They can be made in many different materials, such as plastic, stainless steel, concrete and cast iron.  They can be located above or below ground, inside a kitchen, or outside a building.

SafeSourcing regularly sources Grease Traps for a variety of businesses. For more information on SafeSourcing and how we can help you with your sourcing needs, or on our Risk Free trial program, please contact a SafeSourcing Customer Service representative. We have an entire team ready to assist you today.

Sources

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1 https://en.m.wikipedia.org/wki/Grease.trap#Uses

 

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Source-to-Pay vs. Procure-to-Pay. What’s the difference?

Wednesday, October 11th, 2017

 

Today’s post is by Dave Wenig; Vice President of Sales and Services at SafeSourcing.

You may have heard of the terms Procure-to-Pay and Source-to-Pay. While both terms can be used to describe solutions that aim to improve the procurement process, they each have different meanings. The objective here is to provide some clarity around what we mean when we refer to Source-to-Pay.

Most will agree that a Procure-to-Pay solution is one that enables a cross-functional workflow to streamline and improve the process from the act of purchasing to accounts payable. Source-to-Pay takes this a step further, expanding the scope to include the process of actually sourcing the products or services to be purchased.

The objective of a Source-to-Pay strategy is to be inclusive of all activities related to procurement from sourcing using RFx capabilities through financial reconciliation with your organization’s systems of record. Implementing a Source-to-Pay solution that incorporates each step of your organization’s procurement process maximizes the value of your strategy.

The end result of a Source-to-Pay solution is a more tightly controlled procurement process that drives greater reductions in spend than you might achieve using Procure-to-Pay solutions alone. Plus, you will enjoy a more efficient supply chain.

At SafeSourcing, we advocate implementing a Source-to-Pay strategy and applaud organizations that have incorporated these solutions. For more information on how we can help you with your procurement needs or to discuss how you can improve your own strategic sourcing strategy, please contact a SafeSourcing representative. 

We look forward to your comments.

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Say Yes To New Business! Participate in Request for Quotes!

Tuesday, October 3rd, 2017

 

Today’s post is written by Heather Powell, Director of Customer Services & Project Manager at SafeSourcing Inc.

Do you ignore the invitations to participate in Request for Quotes? Do you overlook the “Please click HERE too for your acceptance to participate in the Request for Quote (RFQ)”?

As a business owner, how do you make any money if you do not do business? Why would you turn down an opportunity to earn new business? If it costs you nothing monetarily but a total of an hour’s worth of time, why not participate?

  •  Through the SafeSourcing process, the RFQs are paid for by the client/host, which means you are not paying to participate or paying to earn new business.
  • Specifications and Terms and Conditions are provided to give you very clear details of the expectations of the items or services required within the RFQ.
  • Accepting to participate in a SafeSourcing RFQ is a very simple process that allows you time to ask specific questions about the items or services and a scheduled training of the system tool to enter pricing. The training itself is very detailed and is done in a very short period of time. We at SafeSourcing understand your time is money.
  • Our RFQs are blind. Just as in a traditional RFP or RFQ, the electronic view of our system is customized to show you your price and your price only, and if you have the lowest quote will be indicated by a specific color. Also different from traditional methods of price collection, is the opportunity to lower your pricing if you do not have the lowest quote. Traditionally, you submit your best and final, walk away and then never know if you had dropped your pricing just another dollar or two that you would have had the advantage of having the lowest quote.

Again, time is money, so 90% of the RFQ Events that SafeSourcing runs for our clients are 20 minutes with 2 minute extensions. Rarely are the RFQs longer. Many of the clients are on a tight timeline themselves and do not have hours to dedicate a person to watch the live event.

The author hopes with this blog that it will open the eyes to businesses wanting new business to participate in future RFQs. Should you have questions regarding our system tool and process or are interested in how SafeSourcing can run a RFQ or RFP for your business 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.

 

 

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