SafeSourcing Blog

Today’s post is by Mark Davis; Vice President of Operations and CTO at SafeSourcing. Mark asks

The RFI/RFP process has been the source of a few SafeSourcing blogs over the past few months and no piece is as important to the process as the plan you develop to move forward with the final stages of the RFx process, as you have companies that barely make the shortlist all of a sudden leap to the front of the pack if done right.

Today’s blog will take a look at some of the aspects that you should be thinking about when preparing for the final presentations.

Who makes the list?  – The main purpose to holding the final stage presentations is to get a final look at the vendor team that you may be getting ready to give your business too.  In almost every case, the RFx process will immediately drop a few vendors out of the mix based on their responses, their initial pricing or a combination of both.  Typically the final presentations will be given by 2 4, sometimes 5 vendors.  To have a larger list makes managing the list difficult, and generally is the stage where you have it narrowed down to companies who can truly handle your account.

What is the focus? – As you are developing the items in the next two points it will be important to develop the content for what you want to know more about.  In many cases RFIs and RFPs are unable to completely do justice for some of the details you need especially if those details revolve around a demonstration.  This is not to rehash the RFI/RFP itself but rather to dig deeper into answers that may have been confusing or not quite as complete as what you wanted.

What’s the Agenda? –  Once you know what you want to focus on and prior to holding your presentations it will be important to create the agenda you wish the vendors to follow.  Not doing so allows the vendors to present whatever they want and may leave you with more follow-up questions than you started with.  Vendors generally appreciate an agenda so that they can focus their energy on the things that are important to you.  This agenda will help be the foundation for the next two points so making it thorough without being so detailed there is no flexibility is the key to a good agenda.

How will you score it? – The final piece you will want to develop before the presentations will be a scorecard that can be distributed to the evaluation team covering every aspect that you want reviewed.  This is a critical step because not everyone will automatically evaluate the presentations in a similar way without guidance.  This can be as detailed as you want to make, however, it should at the very least follow the agenda the vendors have been given so that thoughts and comments on each point can be captured by every member of the team.

Getting ready for final RFI/RFP presentations is an important part of the evaluation process and one that should have as much thought and preparation put into it as the RFx itself.

For more information on helping your company prepare on RFI/RFP or in help preparing for final presentations, please contact a SafeSourcing Customer Service Representative.  

We look forward to your comments.

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From a simplistic perspective an index is a system used to make finding information easier. There are any numbers of indexes or indices available to help procurement knowledge workers insure they are sourcing products at the best possible pricing. The key word here is price as what we will be discussing are specifically price indices.

According to Wikipedia a price index (plural: “price indices” or “price indexes”) is a normalized average (typically a weighted average) of prices for a given class of goods or services in a given region, during a given interval of time. It is a statistic designed to help to compare how these prices, taken as a whole, differ between time periods or geographical locations.

Price indices have several potential uses. For particularly broad indices, the index can be said to measure the economy’s price level or a cost of living. More narrow price indices can help producers with business plans and pricing. Sometimes, they can be useful in helping to guide investment.

Normally an index reflects the current and historical price of a variety of commodities ranging from metals to grain. A common index used in sourcing petroleum products is OPIS or the Oil Price Information Service which you can learn more about by visiting www.opisnet.com.  However in order to drive the best possible fuel pricing there are other dependencies such as whether you are doing spot buys or bulk purchases and these strategies will determine what specific index you would want to review as well as it’s relation to other product information sources such as Platts or the Gulf Coast spot assessments.  This will put you in a better position to determine how to bid the product and also earn a discount relative to the lowest common denominator.

All other commodities have similar sourcing issues dependant on what the highest cost item is in their product makeup. An example here might be the cost of grain in the feeding of cattle or poultry.

Ask you solution provider to explain these tools to you and to recommend how you might use them toward the best outcome.

We look forward to and appreciate your comments.

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

This author would suggest that any event including multiple market baskets, thousands  of  SKU’s all with different specifications, order quantities, delivery locations, multiple suppliers not bidding on each line item, a split award of business and the size of the spend qualifies as a complex event. Adding to the complexity may be the overall strategy required when sourcing the right mix of suppliers to compress pricing properly and drive early and consistent bid activity. This can be further complicated by trying to determine the correct decile based sourcing strategies for the event and including product affinities where they make sense.

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

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

1. Supply Chain complexity.
2. Rate of change in the global supply chain.
3. Long term inherited supplier relationships.
4. Lack of retail procurement staff.
5. Lack of time.
6. Multiple sources of supply.
7. Limited view of new sources of supply.
8. Confusion as to who’s the customer and who’s the supplier
9. Sales People
10. Third Party Providers
11. Collaboration complexity.

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

We appreciate and look forward to your comments.

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