Archive for the ‘E-procurement Solutions’ Category

Ecosystems Abound​

Monday, June 7th, 2021

 

Todays post is from our Archives by Dave Wenig and a good read!

In technology, the term ecosystem Is used to describe a set of platforms, software, solutions, etc. that all work well together to derive more benefit for the users. Often the additional benefit is found through very well designed integration points or through efficiencies. In procurement, these ecosystems exist and create these same types of benefits for the users.

The typical Procure-to-Pay model can be used as an example of how an organization can put their procurement tools and practices at the center of their ecosystem. Some eProcurement providers, SafeSourcing included, offer integrated Procure-to-Pay solutions with a focus on procurement. As more and more organizations look to cost reductions as a key part of their strategic goals, this becomes increasingly more valuable.

Of course, many organizations have implemented or considered eProcurement in their sourcing, but from an ecosystem standpoint, many have not yet progressed to capture the additional value available. For example, an organization that utilizes eProcurement, but does not have their contract management tools within that same ecosystem often has a diminished return relative to the success of the contract management tool. When that tool falls outside of the eProcurement ecosystem, users may not receive timely notifications of key contract dates and financial losses related to renewals might be experienced.

Similarly, organizations whose eProcurement ecosystem also includes cataloging and purchase order capabilities will find that they have a higher attainment rate of the initial savings created by procurement as well as tighter adherence to approved purchases throughout the life of the agreement.

These are just two examples of how to benefit from having procurement at the center of your ecosystem. These are certainly not the only two examples. To learn how you can get more from your eProcurement tools, contact a SafeSourcing representative.

For more information, please contact SafeSourcing.

We look forward to your comments.

What is a Third Party Logistics Provider or 3PL and how do retailers use them?

Tuesday, April 13th, 2021

 

If you are having difficulty with your current distribution model, compress your spend using eProcurement tools and then source a reputable 3PL.

According to Wikipedia a third-party logistics provider (abbreviated 3PL) is a firm that provides outsourced or “third party” logistics services to companies for part, or sometimes all of their supply chain management functions. Third party logistics providers typically specialize in integrated operation, warehousing and transportation services that can be scaled and customized to customer’s needs based on market conditions and the demands and delivery service requirements for their products and materials.

As such, there are a number of types of 3PL’s within retail that may in fact service a single retailer as well as smaller buying groups of small retailers. All might fall under this umbrella including wholesalers such as SUPERVALU, collective buyers such as TOPCO or even a retailer collaborative that may in fact just coordinate aggregated purchases and in fact pick other 3PL’s to provide warehousing, picking and packing and distribution. Each of these providers may in fact provide some or all of the same services. The later or collaborative of multiple retailers might even be looked at as a non asset based 3PL.

In all categories of third party logistics providers however it is still the end user or retailer regardless of size that determines what products they buy and accept delivery of in their stores. As such, it should be no more difficult for smaller retailers to run e-negotiation events? There will need to be discussions as to costs that are purely associated with the warehousing, slotting, picking and distribution of products by a 3PL once an e-negotiation event has been planned, but these items should be easy to break out for bid or add to the final pricing prior to award of business as a flat fee. This is a practice that all 3PL’s should be familiar with already. Retailers should anticipate that their existing 3PL depending on services offered would rather not have you conduct these types of events as it negatively impacts their volumes with manufacturers and other providers and as such their company’s margins.

Understanding your options and the flexibility that 3PL’s can provide may actually make it easier for all retailers to use e-negotiation tools to impact their bottom line.

We look forward to and appreciate your comments.

The Nine Deadly E-Procurement Objections!

Tuesday, April 6th, 2021

 

 

Todays post is by Ron Southard CEO at SafeSourcing

This is a repost from a couple of years back because I just came out f a discovery session with a roomful of buyers and heard at least 5 of these. Fortunately the company CFO who was in attendance asked the following “If this is so, why does Ron have so many examples of products and services we buy every day at lower costs than we pay”. 

The following are the objections we hear all of the time after we have presented to a prospect that has not been exposed to e-procurement tools in the past.

1. We already get the best cost.
2. We’ve done business with this supplier for years.
3. We don’t have product specifications.
4. We don’t have time for this.
5. Switching costs will be too high.
6. We can’t insure the same quality.
7. We need to adhere to certain standards.
8. We are aware of all of the sources of supply in this area.
9. Our business is different!

Often the real reason for these objections is a lack of understanding as to the services being provided which actually extend the productivity of financial and procurement knowledge workers. An underlying reason is that these same knowledge workers believe they are already doing a good to great job. They believe they understand the detail of the category, the supplier community and the leverage point for driving quality results.

So what does it mean to your procurement knowledge workers when based on the above the very first e-procurement event you run returns dramatic savings from your incumbent as well as several other suppliers you were not aware of? Does it mean your team is not doing their job? Does it reflect poorly on them as individuals and or a team?

This author does not believe so, what it simply means is that they are not aware of how much more they can accomplish, how much further they can extend their reach and how much more time they will have to evaluate data instead of collecting and assembling it based on the use of modern strategic sourcing tools that extend their knowledge base.

If you would like to learn more about how your team can accomplish more in a shorter period of time, please contact SafeSourcing.

We look forward to and appreciate your comments.

Why should retailers be concerned with evergreen contracts?

Friday, April 2nd, 2021

 

Todays post is a rework by Ron Southard, CEO at SafeSourcing Inc.

This author has been asked on numerous occasions why I am so concerned with evergreen contracts. First, let’s discuss what an evergreen contract is. A simple definition is that it is a contract or an agreement between two parties (you and your supplier) that is automatically renewed or rolled over after each completion period which is typically a year, until canceled by the either party.

This does not sound so bad at first glance, particularly if the current terms of the contract such as price, performance, quality, service or service level are all being met and are to your advantage when they automatically renew. However this is not normally the case, particularly with contracts that are driven by commodity markets such as oil, chemicals, resins, pulp, steel and many others. In addition you can bet if the advantage is in your favor in the initial contract that your current supplier will notify you in writing within the specified period which is usually 60 days that they are going to let the contract expire or want to renegotiate.

In large parts of the retail trade, there are very few sophisticated contract management solutions deployed, the cost to the industry annually runs in the billions of dollars. This is because the original contract normally has language that includes price increases above the current contract when it auto renews and the auto renewal is normally for a year if the supplier is not notified in writing prior to the anniversary date. Once renewed you are stuck. This happens because most buyers or executives think they will remember in time to notify your supplier when in fact this almost never is the case. As most retail companies have thousands of contracts in the place the amount of data requiring review is unmanageable.

The worst case I ever reviewed was a contract written nine years earlier that had renewed every year. The customer was actually paying the uplifted prices and substantially more than a much smaller company was paying for the same type of service at significantly lower volumes. This did not even include newer technology benefits.

Contract management solutions that offer alert subsystems based on contracts Meta data are the best solution to this problem and typically provide near immediate ROI based solely on the cost avoidance associated with evergreen contracts.

SafeSourcing offers an easy to use solution called SafeContract™ to help our customers with this problem. Ask your solution provider how they can help you. Or contact SafeSourcing.

 

What Procurement KPI’s are on your dashboard?

Friday, March 26th, 2021

 

Todays post is by Ron Southard CEO at SafeSourcing Inc.

At a minimum the following data fields; start date, event date, award date, letter of intent date, contract date, initial delivery date, total low company quotes, total all low quotes, award of business quotes are the basis for e-procurement KPI’s that will help to measure how your procurement department is performing and progressing over time and where opportunity for additional savings exist.

Wit the above data you can measure the following daily by department and associate assigned to that project. You should be able to actually click on any of the KPI’s to drill down for further analysis and causal data.

1. Opportunity lost cost results
2. Timeline analysis of a project launch to event, letter of intent and contract
3. Low quote company versus all low quotes or missed savings
4. Average days to complete event
5. Average days to complete award
6. Average days to complete LOI
7. Analysis of supplier count and line item count versus where savings were maximized.
8. Number of events occurring above and below average.
9. Average or mean performance by KPI
10. Deviation or the best and worst events by KPI

If you had these KPI’s on your desktop of mobile dashboard, how much easier would it be for you to manage your business? If you don’t have this data please contact a SafeSourcing?Customer Services Account Manager to find out just how easy it is to retrieve.

We look forward to and appreciate your comments.

How important are your product specifications!

Thursday, March 25th, 2021

 

Todays post is from Ron Southard, CEO at SafeSourcing Inc.

Here is an all to often typical conversation with procurement solution providers. Be careful to make sure this does not happen to you.

Customer to and e-procurement provider: I need to order some bulk shipping boxes or containers.

Uninformed e-procurement provider: No problem we have specifications on a variety of these products, I’ll get something for you to review my friend.

Customer: No problem we just need to see a sample.

Uninformed e-procurement provider: Consider it done, you are so important to us.

A week later the customer follows up to ask when the sample will be here.

Uninformed e-procurement provider: They said they are waiting for a flatbed to deliver it.

Customer: Why do they need a flatbed!

Uninformed e-procurement provider: To deliver it.

Customer: Send me a copy of the specification:

Uninformed e-procurement provider: Sure can do my friend. I’ll  actually send you a picture.

SafeSourcing Moral: It’s important that you understand what you are asking for, it’s even more important that your e-procurement provider understands what you are asking for.

If you don’t want your specifications screwed up, please contact a SafeSourcing Customer Services Account Manager. Be careful out there.

We look forward to and appreciate your comments.

The success of E-procurement solutions requires officer level sponsorship and support!

Wednesday, March 24th, 2021

 

This is more true today than it ever has been, yet does not!

Todays post is a rerun by Ron Southard, CEO at SafeSourcing Inc.

The role of e- procurement solutions continues to become more strategic each year. Driving cost out of goods and services is one of the most important above the line initiatives any company can undertake. But make sure you don’t forget the expense or indirect spend area.

In order to successfully implement an enterprise wide e-procurement initiative, executive management must provide sponsorship and visibly promote these projects within their organizations. Executive sponsorship is required by the Chief Executive Officer, Chief Financial Officer, Chief Procurement Officer or Chief Logistics Officer. The potential impact to earnings regardless of Industry is so significant with a properly deployed e-procurement program that officer level executives require visibility based on the potential impact to stockholders and stakeholders alike. In fact Sarbanes-Oxley section 404 requires the following of companies:

1. Demonstrate reasonable & consistent governance & compliance monitoring.
2. Assure proper use of tools that have been placed into practice.
3. Employ proper reporting & management oversight.

Implementing e-procurement solutions has the potential to offer significant earnings changes.

Once executive management has sponsored these initiatives, some form of accountability must be implemented to ensure maximum participation in order fully realize organization wide savings opportunities. Scorecards may be a good way to begin. Scorecards report on KPI’s that indicate a teams or a company’s effectiveness. Examples might be awarded savings vs. low quote savings by team and by individual. This could lead to understanding lost savings opportunities or relationship management issues that provide risk.

A company’s successful transition to e-procurement requires a transition from a cumbersome paper RFX processes to one that focuses on using the speed and efficiency of an electronic forum.  Successful change management professionals focused on sustainability realize that this shift must be a combination of the use of not only the latest software advances, but also reengineering of internal processes in order to drive sustainable results.

If you’d like to learn more about how SafeSourcing can help you improve your financial results, please contact a SafeSourcing customer services representative.

We look forward to and appreciate your comments

How should companies determine value? Part III of III.

Tuesday, March 16th, 2021

 

Yesterday I asked you to check back today for Part III of this post to learn why our customers and associates are passionate about SafeSourcing

Today’s post is by Ron Southard founder and CEO of SafeSourcing.

I originally published this  three part series seven years ago. In todays environment it is as important as ever. Please Enjoy

We launched our company SafeSourcing over  12 years ago. Our goal during that time was to bring passion and commitment to the procure to pay process. I was in a meeting with a customer a few weeks back and asked if they would be adding additional staff to support the work we do together. The answer was not directly to the procurement team, but because of the work we do together; other departments will be able to benefit by maintaining headcount that might not have otherwise. This may not be job creation, but it certainly is job preservation. The customer I was speaking to has also added a number of associates both temporary and full time to support the work we do together over the last several years and we have added several associates to support this customer alone. So, we have created jobs for our customer, preserved jobs for our customer, created jobs for our company and saved our customer millions of dollars at the same time. I can’t think of a better value equation and if that’s not meaningful work I’m not sure what is.

Procurement in general may not be the profession of choice for many, however it is a place that associates can be passionate about if the trickle down is explained and reinforced properly. In today’s world, who would not be passionate about helping to create or retain jobs, improve product and food safety and support a better environmental footprint?

There may even be more than a few folks running for public office at the highest level today that could be significantly more successful with their approach if they could prove that their desire is to do the same, albeit in a much larger footprint. It’s easy to be passionate yourself; it’s much more difficult to ignite that same passion in others. When you do, then you have real value.

If you would like to work with a team that is passionate about procurement to help your team find their passion, please contact a SafeSourcing customer services representative or ask us for an executive reference. You won’t be sorry that you did.

 

How should companies determine todays true value? Part II of III.

Monday, March 15th, 2021

 

I heard  a young worker say the other day that new hires did meaningless work and needed to be prepared for that when the started a new job.

Today’s post is by Ron Southard founder and CEO of SafeSourcing.

I originally published this  three part series seven years ago. In todays environment it is as important as ever. Please Enjoy

This totally freaked me out as a business owner who constantly strives to point out the value of what we do, as well as the value we create relative to job growth internally and externally. Certainly one can measure value in terms of customer savings, Return on investment, capital etc. One can also create value through quality improvement of both services and products sourced beyond what is being sourced today. Value can be measured in process improvement internally and externally that might add to a company’s profit or help in retaining jobs. There is a measureable trickle down effect of doing meaningful work; it is something you can be passionate about if you truly are trying to be a better corporate and global citizen. Are there scorecards that measure this? Unfortunately, probably not all of it in one place, but having conversations with your employees/associates relative to their understanding of what your company’s mission is and why it is important is more than just a reason for another meeting that they probably don’t want to attend in the first place.

Personally, I believe that people want to be perceived as valuable by anyone and everyone that they meet whether in their personal life or their professional life. As leaders, we should be in the job of creating excitement about what we do. We may in fact have associates that started out wanting to be a doctor, lawyer, professional athlete or some other profession as many of us did. Today at our company, they work in procurement. Left to their own devices they may feel as though they have not or can not accomplish the success they dreamed about in their youth. Whose job is it to stop that thinking in its tracks and promote an environment of excitement and passion? The answer is that leadership starts at the top. If our leaders are not passionate and regularly reinforcing the work of their company, how do you expect your associates to be passionate. After all, who wants to just go to work and do meaningless stuff?

Check back for Part III of this post on Tuesday March 16th  to learn why our customers and associates are passionate about SafeSourcing.

In the meantime if you would like to work with a team that is passionate about procurement to help your team find their passion, please contact a SafeSourcing customer services representative or ask us for an executive reference. You won’t be sorry that you did.

We look forward to and appreciate your comments.

How should companies determine todays true value? Part I of III.

Friday, March 12th, 2021

 

For those of you that are not informed I am referring to Jack Welch the former CEO of G.E.

Today’s post is by Ron Southard founder and CEO of SafeSourcing.

I originally published this  three part series seven years ago. In todays environment it is as important as ever. Please Enjoy

The first question one might ask of you is; are you talking about ethics or mathematics? This is certainly a fair question even when we apply it to business. The mathematics are certainly what the CFO or finance department are looking for  in a pure value equation of I am buying this product or service from you for the following amount with a return on my investment over this period of time. That’s simple math. Most can understand it. The ethical side of the company which is or should be within the domain of the CEO’s office and where strategy should be developed also adds in the esoteric or ethical value. Most of the time this is defined in the company’s Corporate Social Responsibility initiatives or CSR in terms of value to the community or communities your company serves, value to the environment or value to safety in a variety of areas. Some companies try to measure both areas and report them in the form of Triple Bottom Line results or TPL. This area is a little more difficult to understand as the audience that understands the particular area of measurement or expertise can be much smaller.

For the purposes of this two part post, we will focus on the 2nd area of determining ones value within the framework of your job where if we are not careful, the perception of a few can become the reality of many.

I heard a young worker say the other day that new hires did meaningless work and needed to be prepared for that when they started a new job.

Check back for Part II tomorrow to learn why this totally freaked me out.

In the meantime, if you would like to work with a team that is passionate about procurement and the entire procure to pay process to help your team find their passion, please contact a SafeSourcing customer services representative or ask us for an executive reference.

We look forward to and appreciate your comments