Archive for the ‘E-procurement Solutions’ Category

Where is the best place for retailers to spend their effort to improve profitability?

Monday, April 3rd, 2017

 

Todays post is a oldie but goody by Ronald D. Southard, CEO at SafeSourcing

Obviously all retail companies would like to focus on all three areas and there are even sub sections of these top line areas that we could spell out as needing attention. The challenge is where to deploy already taxed resources?

It does not require an accountant to figure this out. If we assume that COGS or cost of goods and services is about 75% of top line revenue that would result in a simple gross margin of 25%. Based on a number of industry reports we are also safe using a shrink number of 3% of top line revenue.

This author is aware that there area a few companies with shrink below 1% and cost of goods below 75% which means there are also companies with gross margin better than 25%. The obvious question is; are these companies that solution providers want to target for profit improvement sales? Probably not.

So let’s look at an example of shrink improvement with data analysis tools and process improvement tools versus cost compression with SaaS e-procurement tools. Let’s assume we have a company that does top line sales of $1B. Using a shrink number of 3% shrink would be $30M annually. If you were able to reduce shrink by a third in one year, profit improvement would be $10M. If this were a supermarket company with a 1% bottom line or $10M, improvement could be as much as 100%.

Now let’s take a look at reduction in cost. If we assume the same company has COGS of 75% or $750M and that we were only going to address 20% of that number or $150 and only reduce those costs by 20% which is slightly above industry averages the net profit improvement would be $30M or 300% improvement in year over year net profit. If we were only able to achieve 10% savings which is well below industry averages, net profit would improve by 150%.

I’ll leave the gross margin example for you to figure out. In the above case it is clear that attacking COGS has an impact on the bottom line of up to 3 to 1 versus addressing shrink with your already taxed resources.

If you are interested in an immediate impact to your bottom line, please contact a SafeSourcing Customer Services associate today.

We look forward to and appreciate your comments.

The Importance of Marketing your Brand

Wednesday, January 18th, 2017

 

Today’s post is by Jericia Stevens, Account Manager at SafeSourcing Inc.

How are you marketing your brand? Is it bringing in the customer base you desire? Are you achieving your desired results?

Your company brand is your mark of distinction; it’s what sets you apart from your competitors. When you establish your brand, it is important to also develop a plan of execution by implementing a brand marketing strategy. Your level of commitment reassures consumers, suppliers, and anyone else that your company does business with that they can trust you.

“Brand management is so important that Reputations Corporation, a Vancouver-based consultancy group, reports that 72 percent of consumers say reputation influences their buying decisions; 80 percent of employees will accept less pay to work with a company with an excellent reputation; while another 89 percent say reputation is a tiebreaker between equal products. Whether you’re trying to influence key decision makers or attract and retain top talent, you’ll want to consider the following tips on managing your company’s brand.” (Fenn, 2010)

If you need help with: buying marketing tools, hiring the right marketing consultants or with any advertising avenues. We can assist you with your sourcing needs and look into the potential savings in the process.

SafeSourcing, Inc. provides innovative eProcurement tools that can increase efficiency and improve profitability for our customers, and provide superior value for all stakeholders. In addition to providing information, tools and services, SafeSourcing proactively supports consumer safety and environmental standards throughout the global supply chain management process. To learn more, visit SafeSourcing.com

Let SafeSourcing 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.

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Ahearn, Cale (2016, September 21). : Read more: Business Ethics Definition | Investopedia http://www.investopedia.com/terms/b/business-ethics.asp#ixzz4Vx9u5zDh Follow us: Investopedia on Facebook

 

Enjoying the Benefits of eProcurement

Wednesday, November 30th, 2016

 

Today’s post is by Dave Wenig, Regional Sales Manager at SafeSourcing.

First, the good news. You’ve successfully completed an eProcurement event and you have a very significant opportunity to realize the savings generated by that effort.

The question many ask at this point is; now what do I do?

  1.  Review the results in detail: Following a successful eProcurement Request for Quote (RFQ) event, you should take the time to fully review the results of the RFQ. Of course, you’ll want to take a close look at the pricing entered during the process, but there is much more involved. You will also review any notes that the participating suppliers entered to accompany their quotes. Perhaps you’re also interested in understanding how and when suppliers entered their quotes. What was the activity level and what can you learn from the bid activity? As a result of any SafeSourceIt™ RFQ, you’ll have all of this information and more at your fingertips.
  2. Lean on your partner: Often, even after reviewing the results, the best path might still be unclear. For example, perhaps you now have several potential suppliers who could meet your needs and are offering their products at roughly the same price. How do you choose between them? One way to make this decision easier is to confer with your eProcurement partner. While they may not be in the position to make the award decision for you, they might have insight as to what other factors you might take into consideration. Is this a category for which samples are commonly tested? What recommendations does your partner have relative to that sampling process? Did any vendor go above and beyond and offer up additional benefits such as more favorable payment terms or a rebate program? Your partner has experience reviewing the results of an RFQ. Ask their advice.
  3. Keep negotiating: The RFQ is not the end of the negotiations, it’s just another step. At the conclusion of an RFQ, you may deem a supplier to be the best overall value, even if that supplier is not the lowest cost provider. Internal pressures to reduce costs might make awarding to the supplier with the higher cost difficult. In this stage of your review, it may be appropriate to negotiate for further cost alignment with this supplier to achieve a final agreement that is beneficial to both buyer and seller.
  4. Make your decision: Stay with incumbent or try something new? Change is difficult. You may have had a long relationship with your incumbent supplier which had been perceived as a good working relationship. Over time, that supplier may have taken on duties that are outside of the scope of your agreements. Ultimately, as you review the results of your RFQ, this choice will be yours to make. You’ll consider the value of the long term relationship and the value of the known entity against the potential represented by an eager new supplier. Weighing heavily on that decision will be the potential savings. If the new supplier’s cost is 5, 10, or 15% lower than the cost of your incumbent, you’ll have to consider the monetary value you would associate with being able to maintain your current source of supply.

Dave Wenig is a North American Director of Sales at SafeSourcing. Dave or any member of the experienced team at SafeSourcing would be happy to discuss how SafeSourcing can help you attain and quickly realize savings. For more information, please contact SafeSourcing.

We look forward to your comments.

 

To Procure or Not to Procure

Thursday, September 22nd, 2016

 

Today’s blog is by Margaret Stewart, Executive Assistant at SafeSourcing.

Have you ever considered implementing procurement solutions  into your business? Find out the pros and cons before you decide.

The smartest way to make a big decision about your business or organization is to do the research and know the ins and outs of what you are getting into beforehand. Often times, big decisions on how you spend your money come with other side effects, both good and bad.

The idea of whether or not to implement procurement into your business’ processes has been a common theme for much debate and numerous articles. Many of these debates and articles say much of the same thing as they are important aspects to consider. This blog will highlight some of the stronger points on both sides of the debate so you can know better make a decision for your business.

Cost – Typically with procurement efforts, a business or organization will reduce their costs of the services and supplies they are already getting, often significantly, without sacrificing any amount of quality. However, the best way to realize those savings is to use an e-procurement provider, which does cost the business some amount of money, but those are typically small compared to the savings achieved.

Technology – Modern procurement efforts are most efficiently realized through the use of technology, like reverse online auctions. This technology can make things both easier and harder in different ways. More suppliers can participate from any location, diversifying options and enlarging competitive bidding. However, preparing businesses to use electronic systems can be time consuming and always runs the risk of human error.

Service – This is one area that often requires finesse. Negotiations, technical assistance, reporting, training, and management of accounts all fall under customer services and ineffective teams can jeopardize relationships with suppliers, possibly affecting any savings found during the procurement efforts. On the other hand, an experienced customer service team can help strengthen relationships with suppliers and even see increased savings.

Although there are many other pros and cons to implementing procurement, the above areas tend to appear in most conversations on the topic. If you decide to integrate procurement into your organization, SafeSourcing can assist you the entire way. Complete with experienced customer services, modern technologies, and a risk free trial offer, SafeSourcing can exceed your needs.

For more information on how SafeSourcing can help you realize the benefits of procurement, or on our Risk Free trial program, please contact a SafeSourcing Customer Service representative. We have an entire team ready to assist you today.

 

Enterprise Software RFPs

Wednesday, June 29th, 2016

 

Todays post is from Ron Southard, CEO at SafeSourcing

We’ve discussed the differences between the RFPs, RFIs, RFQs, and Surveys many time and also touched on why they were different as well as when you would use one.  What we said then was that you typically want to run one of these events when you have an idea about the basic functionality of a product you need but are not sure who can provide it and what else it is they can bring that you didn’t think of.

In many cases, the road to procuring enterprise software will require one of these tools due, in part, to the fact that software can change so quickly, but also because typical decision factors like price play a much smaller role to the features and functionality of the software.

In preparing to make a major software purchase a Request for Information or Proposal can be a great first step.  Here are some things to keep in mind about the solution and the company when preparing for one.

Flexibility – One of the keys in the process of evaluating software solutions and the companies that create them is to gather information about the flexibility of the product.  A focus on how configurable the system is and how well a solution can be fitted with your company’s needs and appearance is an important part to building a good software RFP/RFI.

Reputation – A company’s reputation for delivery used to go a long way in the business world but in the wake of a tougher economy price has begun to gain ground.  In the arena of software, it is still one of the most important factors to evaluate when selecting a software partner.  Building a relationship with companies known for under promising and over delivering on a consistent and referenceable level can be a huge factor in protecting a million dollar investment.

Pricing model – The key here is not in the actual price but how the company prices that is important.  Your company’s needs will dictate the pricing model that benefits your company whether for the enterprise; per seat or per user.  How a software provider prices and what they charge you for are HUGE factors in determining if they are suited for you and your company. The more information you can gather at the RFP/RFI stage as possible is very important.

Support – There is no more important product to verify good support on than software.  As upgrades occur, employees get promoted or leave the company, new employees need training, or issues arise, the level of support a company will commit to is critical to the confidence you can place in them.  On top of this, the more mission critical the functionality the software is to support is for your company, the more important the level of support becomes.  Any software RFP/RFI you create should have a detailed section to determine what level of support you can expect from each vendor.

For more information on SafeSourcing and how we can provide RFIs/RFPs that help you focus on these important factors, please contact a SafeSourcing Customer Service Representative.

We look forward to your comments.

HEY Leadership Teams!

Monday, June 13th, 2016

 

Todays post is from Ron Southard CEO at SafeSourcing Inc.

Let’s also assume that you want to drive the greatest possible savings across the broadest range of categories in the shortest amount of time, like the next budget period; and want a sustainable process moving forward. Are you comfortable with your teams answer?

A number of issues you might consider are whether you have the requisite headcount, specifications, strategy, research skills as well as knowledge of new sources of supply to accomplish these lofty goals yourself.

Once you have settled on the fact that your existing team cannot achieve the above goal, the next question should be; what type of event services can an e-procurement solutions provider offer to help us if we can’t this ourselves?

By now, let’s assume you have come to the conclusion that there is no way possible for your team to do this alone. You now need to find a reputable eProcurement solutions provider. A quality e-procurement solutions provider should be able to ramp up to your task immediately. They should possess skills that are the foundation of their past success. These are very specific skills that enable them to run large volumes of e-procurement events in a full service mode with little guidance from you that have historically driven impressive savings on products and services over a long period of time. They should be able to provide reference to where they have done this in the past and how they were able to augment other company’s staff with little interference of their day to day work. Remember, knowledge transfer; passion, skill and required headcount to carry out these practices on a day by day basis are what drive results.

This process is provided by people behind the scenes with a very specific skill sets. If you really want to drive the greatest possible savings across the broadest range of categories in the shortest amount of time, like your next budget period. And, you already know that you cannot do this by yourself, reach out to a Safesourcing customer services account manager to see how quickly we can be of assistance.

We look forward to and appreciate your comments.

Why should you use a Procurement Service Provider?

Tuesday, December 22nd, 2015

 

 

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

Can you spend hours of time devoted to researching qualified and certified suppliers? Can you devote time to learning about the product and services your company need to buy? How do you know the product is apples to apples? Are the services providers licensed and bonded? How about obtaining multiple bids for your product?

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From the website Procurement Service Providers:

At most organizations, it is very expensive and difficult to maintain domain expertise in every category of spend. Using a PSP avoids the burdens of procurement infrastructure for non-strategic categories. A Procurement Service Provider can provide a rapid analysis of an organization’s spend and implement changes, negotiate with suppliers, and use proven industry best practices. A good PSP will become an extension of the organization’s existing procurement resources, in a non-obtrusive fashion.

In a recent article titled “Strategic Sourcing in the Mid-Market Benchmark: The Echo Boom in Supply Management”, the Aberdeen Research Group wrote about potential new approaches of Mid-Market company’s sourcing initiatives due to findings showing that they currently have mostly fragmented or limited sourcing efforts. Specifically, to remain competitive, Mid-Market companies should have “Increased reliance on third-party consultants to help define strategic sourcing process and train internal employees on commodity costing models, sourcing automation tactics, and category and supply market assessments.”

Additional research shows:

“…research of enterprises that have outsourced management of specific procurement processes and/or specific categories of spending have been able to achieve material cost reductions that average between 10% and 25%. In some cases, material cost reductions topped 30%.”         Aberdeen Group Research Abstract: You Will Outsource Procurement: Here’s Why and How – October 16, 2002

What SafeSourcing, Inc. states:

SafeSourcing works with finance and procurement department professionals in order to analyze their entire companies spend data to detect opportunities for cost reduction, supply chain awareness and performance improvement, as well as product and service quality improvement. Our ROI is historically greater than 10X and measureable within a company’s current fiscal accounting period.

Want to try us out risk free? 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.

 

Looking for a new Procurement Service Provider? Look no further!

Friday, December 4th, 2015

 

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

SafeSourcing, Inc. is here for you, where we focus on YOU and YOUR needs, and not just sell you a tool, we provide you exceptional service!

10X

 

 

 

 

About us:

Just in time, an innovative alternative has arrived. SafeSourcing is loaded with efficient and comprehensive tools and programs that turn the procurement process into a highly productive endeavor. SafeSourcing® is, literally, a one-stop shopping center.

At SafeSourcing, we focus on safety and security. All our vendors are part of a high quality supplier database with many associated tables that support security and safety in the supply chain. SafeSourcing’s suppliers are also checked for their support of socially responsible initiatives including their eco-friendly practices.

To that end, our SafeSourceIt™ Supplier Database of over 427,000 global suppliers contains over twenty-five unique certification standards that are supported by our best practice initiatives such as GFSI, ISO 22000, Green Seal, ECO-LOGO, Fair Trade, SQF and Certified Humane Raised & Hand-Fed.

The SafeSourcing objective is to help buyers save considerably on costs. History shows that in selected categories, buyers have saved as much as 30-40%. Auction events can literally be set up in minutes, creating a significant efficiency improvement over traditional offerings. Studies have shown that a 5% saving in procurement costs translates into an effective increase in sales growth of 30%.

“As our technology advances, new companies are given the tools to do business in a better, smarter, more streamlined and cost effective way. SafeSourcing is one of those companies and delivering these advances to the procurement community is why we are here.” Ron Southard, CEO, SafeSourcing.

SafeSourcing is committed to proactively supporting safety and environmental standards in the global supply chain. We donate a portion of our net profits to retail education, green and safety initiatives.

Are you interest in learning more about SafeSourcing and how we can help your company? 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.

 

The Politics of Procurement

Monday, October 19th, 2015

 

 

Today’s post is by Alyson Usserman, Project Manager at SafeSourcing.

As a Project Manager within SafeSourcing, I am often tasked with beginning a sourcing project, as well as ending it. Mixed in with customer communication, there is also supplier communication.  We can learn vast amounts of information from the suppliers that we source products and services from.  We can find out current industry trends, as well as the forecast for the following year.  The possibilities are endless.

At SafeSourcing we are exposed to hundreds of suppliers on a weekly basis. Some suppliers shine brighter in some areas than others; however, we also run across suppliers who become unresponsive during the process of running an RFI, RFP, or an RFQ.  This is where the politics come into play.  When this happens, you “re-route” your approach.   Many times it becomes a simple solution by being redirected to another sales consultant, or perhaps a new department. Sometimes this approach is not conducive, and another strategy must be applied. At this point, the request becomes an escalated issue within the company. I normally ask whom the original contact’s boss is, “who makes decisions to participate?” More often than not, the company will want to know your credentials.  As a Project Manager who is intimately familiar with any project I take to market, I can accurately and confidently answer any questions or concerns.

At the end of the day, the politics in procurement is managing the supplier interactions from a sales individual all the way to the CEO.

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.

 

 

 

Evaluating eProcurement Solutions – Part 5 of 5: Service

Thursday, September 10th, 2015

 

Today’s post is our SafeSourcing Archive!

Strategic sourcing companies each have their own unique offering whether that is based on a price model, category focus, supplier database or some other defining trait, but the overall goal is to help their customers source products and services easier, smarter and with an end result that creates more value than the customer could achieve on its own. Over the past four days we will be looking at some of features and characteristics you should be looking at when evaluating a new or existing sourcing partner. Today we will close out the series by focusing on the one trait that should be examined closer than any of the other five; Service.

Having great data, tools, reporting, or technology will only be as good as the team helping you to run new projects and your partner should be as strong, if not stronger in their customer service offering than anything else they do. Today we will look at a few of the specific areas you should be looking at when evaluating your current or a new strategic sourcing partner.

Experienced – Sourcing experience across dozens of category is not something that every strategic sourcing has. There is a reason why some sourcing partners focus on travel, energy, and logistics only for their customers. Experience in sourcing events from both a consumer, sourcing partner, and supplier side is a big key to understanding the perspective of all the parties involved. This experience helps with the management of the suppliers as well as that of the customer to keep the projects moving and details and communication delivered. Well rounded strategic sourcing companies will have had sourcing experience in IT related products and services, software, warehouse materials and equipment, construction related goods and services, temporary services, For Resell goods, transportation and logistics, commodity goods, and normal indirect spend items to name a few.
Supplier management – The most difficult task in running a sourcing project, outside of collecting the data necessary to run the event, is managing the suppliers during the process. Management begins as soon as suppliers are contacted to participate in the event. Your strategic sourcing partner should be able to assist you with fielding all questions from suppliers, speaking to suppliers on your behalf to get them engaged in the process, handling objections they may have about the process, and training them on how to follow the process and tools with live support. Once a sourcing project begins, your strategic sourcing partner should manage the process and all communications so that your team can be allowed to focus on the important things they will do later. Support should continue through the entire process all the way until the project completes and suppliers have submitted everything requested.

Post event support – In some cases once the sourcing event is completed, handling and communication of the suppliers selected for award goes back to the customer. In many other cases, the sourcing event (RFI, RFP, RFQ) is just the beginning of the evaluation process. Many times samples will need to coordinated, presentations scheduled with the selection committee, scorecards and evaluation materials developed and distributed to the internal decision makers as well as agendas to the suppliers. These are all ways that good strategic sourcing partners stay involved and take the load of the sourcing process off of the customer. Many times the suppliers are used to the customer service member they have been dealing with and having that same person take them all the way through the process is a big advantage to the process going smoothly.

Many things should be looked at when evaluating a strategic sourcing partner and depending on the structure of your department, some characteristics will be more important than others but all should be considered at some point. For more information on how SafeSourcing can assist your team with sourcing 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.