Archive for the ‘Business Sourcing’ Category

What are you doing about your Contract Management Needs?

Friday, February 26th, 2021

 

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

If you want to insure against contract leakage that can be as much as 5% per year and also protect the savings from your hard fought eNegotiations, it may be time to take a look at your contract management needs.

Most contract management systems have relatively short ROI periods. In fact a company might even be lucky enough as they go through their data collection process to find a single contract that when analyzed might pay for the entire system.

There are all sorts of benefits associated with using contract management software. Probably the most important and least recognized of which is finally having all spend data in one location enabling more effective negotiations. If you have ever run an e-procurement event and tried to assemble a simple specification or incumbent supplier data you already understand the time involved. Administrative costs alone can be reduced by 25-30%.  That’s a huge number in today’s world of insufficient staff.

If you want to get started, here are some basics that a system should be able to provide.

1. Create contracts
2. Maintain contracts
3. Control contracts
4. Track user access to contracts
5. Track and monitor the status of contract Meta data
a. Award date
b. Contract begin date
c. Contract end date
d. Begin delivery date
e. Escalator language
f. Notification clauses
g. Termination Clauses
6. Automatically alert buyers and management of required actions
7. Custom Reporting
8. Supplier Scorecards

If you want to get started tomorrow, please contact a SafeSourcing customer services account manager and ask about SafeContract™.

We look forward to and appreciate you comments

The Benefits of Contract Management

Thursday, February 25th, 2021

 

 

Today’s post is our SafeSourcing Archives

Buyers rely on contracts with suppliers to keep their business going. Shippers, vendors, outsourced services and independent contractors all require a high level of contract management system to maintain efficient relationships for their organization. Understanding the impact of poor contract administration on their organization can justify the investment in comprehensive contract management services.  However, one of the biggest pitfalls of not having a contract management system in place is the risk of a contract expiring without the buyer realizing it and thus the buyer being in the control of the supplier to either keep goods and services coming or deliveries just stop since the contract came to the end of the term date.

A contract is drawn up to create the guidelines for a business relationship. When you abide by the terms of the contract, you reap the benefits that it has to offer. But poor contract administration can cause you to violate terms of your contract, which can lead to penalties, fines and a potential lawsuit. Each move made with a contracted entity should be dictated by good contract management to avoid the high cost of the contract penalty clause.

An efficient contracted relationship includes a reporting system that informs both parties of activity performed under the contract. Without this reporting, the two sides have no way of monitoring the benefits of the agreement and developing any changes to make when the agreement comes up for renewal. Effective reporting also keeps track of quantities that helps each side monitor their usage and determine when contract limits may have been met.  Poor contract administration can cause each side of an agreement to lose track of the contract term. Companies can get caught up in the daily routine of doing business and lose sight of contract renewal dates. With a relaxed or no contract management system in place, companies could be operating under expired contracts and not realize it.

Fortune 1000 companies generate an average of 40,000 to 80,000 contracts; less than 80% of retailers have a Contract Management system in place.

  • Today’s Retail Environment
    •  Fragmented Contract Management Procedures
    •  Labor Intensive
    •  Lack of common systems infrastructure
    •  Poor contract visibility/analysis/compliance
  • Regulatory compliance
    •  Contracts dictate supplier-customer relationship
    •  Pricing, Terms
    •  Service levels, Quality
  •  Forcing companies to strengthen contract policies
    •  Document procedures
    •  Track and control financial exposure
    •  Mitigate risk
  •  Sarbanes-Oxley
    •  Every Transaction
      •  Approved/Stored/Reported

How to avoid accidentally extending an expired contract is the key to ensuring that an expired contract isn’t kept on foot is to engage in good contract management. Know your contract and monitor contract performance. Be aware of deadlines and notice period and communicate and document any changes.

If you are planning to explore the benefits of contract management, feel free to contact SafeSourcing.   If you would like more information on how SafeSourcing can help you with a contract management system, please contact a SafeSourcing Customer Service representative.  We have an entire team ready to assist you today.

We look forward to your comments.

 

 

Retailers; is your sourcing transparent enough?

Sunday, February 21st, 2021

 

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

If you are not sourcing at least 30% of your cost of goods and services using e-procurement tools, you are lagging your industry leaders as well as being significantly behind other industries. As such; you are not getting the best costs and not driving the best margins for your company.

Reverse auctions since their inception more than a 16 years ago haven driven healthy competition amongst supplier companies. As such the results of a reverse auction can provide a great benchmark for both the buyer and the supplier. For the buyer the results can be used as a tool to evaluate how to best source other products and services. Additionally suppliers that are not the low quote or winning bid now have the opportunity to evaluate why that is and what they need to do in order to improve or to be more competitive in the market place. This of course is all happening without the need to collect, collate, compare or negotiate during the process. In other words it is happening transparently to the normal sourcing process. I watched a reverse auction today where 4 suppliers placed 180 quotes for a dozen line items in under 30 minutes. No buyer can do that. Additionally reverse auctions provide the opportunity for suppliers that are outside of your business area or knowledge base to bid for your business.

Possibly the single largest area of benefit to reverse auctions outside of price compression  for  procurement professionals  is that it offers  a significant opportunity for process improvement since most solution providers offer a standard process for hosting reverse auctions. Everything is done in one place using standard processes in building the event to the final analysis of the bids collected. Information availability is immediate for evaluation and is archived for easy access in the future. This reduces the overall procurement life cycle, eliminates or reduces the opportunity for human error, and provides a standard way to conduct and award business.

Please contact a SafeSourcing Project Manager in order to learn more.

We look forward to and appreciate your comments.

COVID Keepers

Friday, February 19th, 2021

 

Today’s post is written by Ivy Ray, Senior Procurement Specialist at SafeSourcing Inc.

We are all looking forward to the day when we can resume our normal activities, post COVID style. We will be able to congregate with one another soon, but it will be a new normal. There are some improvements and innovations that were born out of this tragedy that should remain. This has been true throughout the decades.

During the Great Depression, the electric washing machine was in its infancy and many people could not afford to own one, so a couple of entrepreneurs got together and invested in buying a few of them to rent out; thus, the birth of the laundromat. Shelf stable food products such as Spam and macaroni and cheese in a box were created out of necessity, during the Great Depression and WWII. People needed products that were inexpensive, could be prepared quickly.

Due to our current situation, nearly every industry has had to rethink how they are operating and how to stay relevant.  Brick-and-mortar retailers have developed a stronger online presence. Restaurants which were traditionally known to only provide dine-in services have had to find a better way to serve their community by offering take-out service and partnering with delivery services such as Uber Eats and DoorDash. Some restaurants also had to upgrade their POS system to accommodate tracking orders and deliveries.

Technology, in general, has become more valuable because to do business, you need to have a way to connect to your market and to your employees via remote methods. Buy online and pickup in store, also known as BOPIS, was available in some areas but has gained popularity during the COVID crisis. Grocery stores are offering curb-side pick-up and delivery services. Behind the scenes, there are several layers of technology required to maintain this type of operation. Not to mention added security to protect the buyer from fraud and theft.

In the education arena, from K-12 to college, students are learning remotely, and educators are learning to navigate delivery of their curriculum in a virtual world. Unfortunately, snow days are collateral damage.  As a result, when we go back, there is no going back to business as usual. The supply chain has been reimagined and there are some things worth keeping. Make new friends but keep the old!

For more information on how SafeSourcing can assist you in exploring your procurement

solutions for your business efforts, or on our Risk-Free trial program, please contact a SafeSourcing Customer Service RepresentativeWe have an entire team ready to assist you today.

 

 

Are You Considering Installing Electric Vehicles or EV Charging Solutions?

Thursday, February 18th, 2021

 

 

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

With the vaccines now available and people starting to look forward to the pandemic slowing down, we can expect that there will be more people traveling in the next few months.  With this increase in traveling of course we will probably come to see higher gas prices.  We have already seen the average price per gallon raise approximately 13 cents in the past month.  With the price of gas rising, we can also expect that sales of Electric Vehicles will continue rise over the next few years.  It is estimated that by 2025 that 25 percent of vehicle sales will be electric.  The Department of Energy (DOE) defines electric vehicles as vehicles that use electricity as their primary source of power or to improve the efficiency of conventional vehicle designs.

With all of these electric vehicles, owners will be looking for convenient places to charge them besides at home.  Because of this increased demand, national retailers are partnering with companies to install charging stations throughout the United States.  Installing these charging stations gives retailers the opportunity to attract customers to their stores to use the stations, as well as increased store sales from the customers spending more time shopping while they wait for their vehicles to charge.  Below is a list of some of the retailers that currently offer EV charging:

  • Kroger
  • Walmart
  • Kohl’s
  • Target
  • Safeway
  • Ikea
  • Walgreens
  • Meijer
  • Whole Foods

If you need help finding EV Charging solutions for your company, feel free to contact SafeSourcing.   We can gather all the necessary information for you and help you decide which company meets your needs.  If you would like more information on how SafeSourcing can help you, can help you,  please contact a SafeSourcing Customer Service representative.  We have an entire team ready to assist you today.

 

 

 

 

 

Shell Posts Losses

Friday, February 12th, 2021

 

Today’s blog is by Gayl Southard, Administrative Leader for SafeSourcing Inc.

Royal Dutch Shell PLC reported fourth-quarter losses as the company reals from the pandemic fallout.  International oil companies are reporting the worst performance in decades.  Energy companies cut spending, cut jobs, and wrote down values of their assets.  “Shell on Thursday reported a fourth-quarter loss on a net current-cost-of supplies basis—a figure similar in the income that U.S. oil companies report—of $4.5 billion down from a profit of $871 million in the year-earlier.”1

Shell reported a loss of $19.9 billion for a year, compared to a profit of $15.3 billion in 2019.  Other oil companies such as Exxon Mobile, Chevron, and BP also reported losses.  Profits were hit by the fall of oil and gas prices and weak refining margins.

Chief Executive Ben van Beurden said he is optimistic that the second half of the year will improve.  Oil demand is 5% to 7% below levels in 2019, but should return to those levels in 2022, as the aviation sector recovers.  “Shell said it would raise its first-quarter dividends by 4%, in line with the commitment made to shareholders last year of annual increases, after cutting it in April for the first time since World War II by two-thirds.”2 . Shell would like to cut their debt to $65 billion from $75.4 billion by the end of the fourth quarter.  That would be down from $79 billion from the previous year.

For more information on how SafeSourcing can help your procurement efforts, or on our Risk

Free trial program, please contact a SafeSourcing Customer Service Representative.  We have an entire team ready to assist you.

References………………………

1, 2 Sarah McFarlane, WSJ, 2/5/2020

 

Teamwork in a Moment of Crisis or Emergency

Thursday, February 11th, 2021

 

 

Today’s post is an older repost but still relevant from our archives at SafeSourcing Inc.

While these guidelines were created for management roles, it is important to note that in a team environment that these suggestions apply to ALL members of the team:

Many of us in businesses are ill-prepared to handle the traumatic events- death of immediate family members, natural disasters, accidents, etc., and yet these events can and do occur in our workplaces. They are events, for which preparation helps.

Let all employees know that you are concerned and doing all you can to help them. You represent the organization to your employees, and your caring presence can mean a great deal in helping them feel supported. You don’t have to say anything profound; just be there, do your best to manage, and let your employees know you are concerned about them. Be visible to your team, and take time to ask them how they are doing.

Let people know, in whatever way is natural for you, that you are feeling fear, grief, shock, anger, or whatever your natural reaction to the situation may be. This shows your employees you care about them. Since you also can function rationally in spite of your strong feelings, they know that they can do likewise.

Share information with your employees as soon as you have it available. Don’t be afraid to say, “I don’t know.” Particularly in the first few hours after a tragedy, information will be scarce and much in demand. If you can be an advocate in obtaining it, you will show your employees you care and help lessen anxiety.

Encourage employees to talk about their painful experiences. This is hard to do, but eases healing as people express their painful thoughts and feelings in a safe environment, and come to realize that their reactions are normal and shared by others. Your team may prefer to discuss the situation among them. Don’t be afraid to participate, and to set a positive example by discussing your own feelings openly. Your example says more than your words.

Build on the strengths of the group. Encourage employees to take care of one another through such simple measures as listening to those in distress, offering practical help, visiting the hospitalized, or going with an employee on the first visit to a feared site. The more you have done to build a cohesive work group, and to foster self-confidence in your employees, the better your staff can help one another in a crisis.

Build on your work group’s prior planning. If you have talked together about how you, as a group, would handle a hypothetical crisis, it will help prepare all employees, mentally and practically, to deal with a real one. Knowing employees’ strengths and experience, having an established plan for communication in emergencies, and procedures can help you “hit the ground running” when a crisis actually strikes.

Be aware of the healing value of work. Getting back to the daily routine can be a comforting experience, and most people can work productively while still dealing with grief and trauma. However, the process of getting a staff back to work is one which must be approached with great care and sensitivity. In particular, if anyone has died or been seriously injured, the process must be handled in a way that shows appropriate respect for them.

blog

 

 

 

 

 

 

 

While we, the team at SafeSourcing, are no stranger to moments of emergency or crisis, we pull together as one team and one family ensuring that our customers and suppliers are taken care throughout our crisis. We take pride in offering the best customer service in the industry and will do whatever it takes to ensure that it remains our top priority and invisible to the outside world.

For more information on how SafeSourcing can assist you in exploring your procurement solutions 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.

——————————————————–

Resource: http://www.opm.gov/policy-data-oversight/worklife/reference-materials/traumaticevents.pdf

 

What is CALS?

Tuesday, February 9th, 2021

 

Today’s post is from our archives at SafeSourcing.

CALS (Continuous Acquisition and Life-cycle Support) is based on protocols from the United States Department of Defense for electronically acquiring documentation and connecting associated information.

These protocols have developed a number of standard specifications for the exchange of electronic data with commercial suppliers. These standards are frequently referred to simply as “CALS”.

Effectively adopting CALS procedures requires close coordination among buyers and suppliers, using standard methods (electronic data interchange or EDI), while streamlining business processes (business process engineering), and effective use of business and technical information.

CALS was formerly known as Computer-aided Acquisition and Logistic Support.

Let SafeSourcing better manage your sourcing projects. We enjoy bringing this blog to you every week and hope you find value in it. 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.

 

The Value of Data

Friday, February 5th, 2021

 

I was talking to a customer about data to support sourcing  and found this old post of mine. Its still on target. Enjoy.

Todays post is from our SafeSourcing Archive

Data has a way of sneaking into every aspect of our life. In an article in the Wall Street Journal from 1/14/2012 titled “How Google & Co. Will Rule Your Rep” by Holly Finn, the uses of personal data as it relates to one’s reputation are described. Soon, it seems, data will be carefully analyzed at even the most personal or intangible aspects of life.

With that in mind, it is my belief that as you approach your procurement process, this rings true as ever. Too often in procurement, a purchase decision must be made when there is either no historical data to support the decision or the historical data available is insubstantial.

In these cases, it may seem as though there are no valid options that would help make a purchase decision beyond the data at hand.

In most cases, however, there are more options available. In an example where you do not have adequate historical data to make a sound purchasing decision based on pricing, you may find that it is possible to move forward in your decision with the confidence that you have received the best pricing possible. Ask your strategic sourcing partner to work with you to review your project. In most cases, an RFP can be created and managed in such a way that will provide you with the data that you might not have otherwise. Once completed, a live RFQ can be managed as needed to provide the compressed prices that you seek.

With your new data in hand, you can make your decision with confidence and with the metrics to back it up.

Just think, it used to be enough to want to share an opinion. But now, as we write this, we are hoping that it will be worthy of online comment and reaction so to boost my (quantifiable) reputation.

Please contact a SafeSourcing Customer Services Representative to learn how we can help with your sourcing data needs. You might be very surprised at what we know about you based on what we have learned from others.

We look forward to and appreciate your comments.

If you can improve profitability 73%, Why don’t more companies use Reverse Auctions and other e-Procurement Tools?

Monday, February 1st, 2021

 

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

Todays reverse auctions are web/cloud based  Software as a Service (SaaS) offerings that are part of very sophisticated procure to pay applications that let retailers and other companies find the best suppliers for any resale or not for resale product or service they wish to source.  Using a web based reverse auction tool, retailers, other companies or groups of companies (Group Purchasing Organizations) can invite far more suppliers to take place in reverse auctions than they could possibly find or manage using traditional sourcing methodologies. During the reverse auction event they can review on one page all responses from suppliers, data about suppliers, notes from suppliers, product specifications and other necessary information at an instant. Upon auction conclusion which is typically less than 30 minutes retailers and other companies can review savings scenarios and award business from their desktop.

Now let’s get to the simple financial benefits. Let’s assume a $150M Retail Company with industry average earnings of one percent or $1.5M. Additionally cost of goods for this company is 70 percent or $105M. Let’s also assume this company were to only source ten percent of their for resale or above the gross margin line spend or roughly $11M. With below industry average savings of ten percent, total savings generated would be $1.1M which is a direct impact to net profitability. If all other segments of the P&L perform to plan and all savings are recovered during the same business calendar year net profitability would increase to $2.6M or a 73% improvement.

NO BS Here! If you don’t believe me, I will be glad to personally sit down with your CFO and Finance team and prove it to you!

Wen company’s  can begin almost immediately (SaaS/Cloud offering) with no risk (Cost Neutral Pilots)  and no IT involvement,why don’t more companies use reverse auctions and other e-procurement tools? That’s a great question!

If this author were you, I just could not ignore this type of opportunity. If you’d like to learn more, please contact a SafeSourcing Customer Services Account Manager.

We look forward to and appreciate your comments.