Archive for the ‘E-procurement’ Category

I know that your costs are going UP!

Wednesday, September 23rd, 2020

 

Today’s post is from Ron Southard, CEO at SafeSourcing Inc.

Its amazing to me that with all the increases in spending due to the COVID-19 Pandemic, which would certainly be classified as tail spend that companies continue to not use tools available to them that will help to keep these costs down. Please contact me personally if you’d like to discuss.

At SafeSourcing, we help buyers save considerably on costs by providing tools that enhance the ability to do business in a better, safer, smarter, more streamlined and cost-effective way. Our flexible service offerings and suite of e-procurement tools deliver savings that can be referenced that are greater than 10 times the cost of our services and often much higher. Our annualized savings across all customers and all categories over the last 24 months are greater than 24%

We can help Improve your profitability and increase your efficiency. Both areas that  should and can help during these stressful times.

Here’s what one of our customers had to say. “We would not be where we are with our Indirect Spend if it were not for SafeSourcing.” SR. VP FINANCE OF $20B DISTRIBUTION COMPANY.

If you’d like to discuss our risk free trial, please contact a SafeSourcing Customer Services professional.

Believe Me, You could be improving your profitability by up to 73%.

Wednesday, September 9th, 2020

 

Today’s post is by Ron Southard, CEO at SafeSourcing.

I wrote this post a number of years ago, and it is still true today. To many CEO’s believe they can have a huge impact in the sales area. Let’s rebrand and we can drive huge top line sales increases! BS. Yup BS. Many have tried and many have failed.

What they should be saying is let’s  MAKE MONEY. We are in business to MAKE MONEY. We can increase sales by focusing on sales. News flash, visit your stores  and  talk to your customers. Watch you associates. It will be come painfully clear what will improve sales.  You do not need to spend millions to rebrand. We can also keep more of those sales increases and reduce historical margins by focusing on reducing costs.

Read on if you want to learn something. Or go find an investor and delay the asset sale for a few more years.

I would  still be glad to personally discuss this premise with any Retail CEO or CFO that wants to challenge it! Let me do it for you. You’ll be surprised and be a hero and get a big bonus.

Let’s review exactly what a reverse auction is, how simple they are to use and the potential financial benefits?

Reverse auctions are web based  or Software as a Service (SaaS) tools 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 business or even large holding companies can locate and invite many more suppliers to take place in reverse auctions than they could possibly find or manage using traditional sourcing methodologies or even tools like BING or Google. During the reverse auction they can review on one screen all of the responses from suppliers, data about the suppliers, notes from the suppliers, product specifications and other necessary information in an instant. Upon auction conclusion which is typically less than 30 minutes including extensions host companies can review potential savings scenarios and award business right from their desktop. Sound simple? That’s because it is.

Now let’s get to the simple financial benefits. Let’s assume a $150M smaller 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 goods spend or roughly $11M. With well below industry average savings of just 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.  Again this assume no tributes to Caesar or other funny accounting associated with new capital plans and the like

So, why don’t many companies use reverse auctions and other e-procurement tools? That’s a great question! Maybe someone out there has an answer.

If this author were you, I just could not ignore this type of opportunity.

If you’d like some examples of the types of savings SafeSourcing can generate for you by size of spend and category, please contact a SafeSourcing customer services account manager.

We look forward to and appreciate your comments.

eRFX Strategies for Success Part VI the  Request For Quote  

Thursday, September 3rd, 2020

 

 

 

Today is the final edition of this VI part post from Ron Southard, CEO at SafeSourcing Inc. You can download each link or just download my Whitepaper by the same title. If you follow these guidelines, you are on your way to controlling the cost of any category you take to market.

In  parts one, two, three items 1-4 and four items 5-8  and five RFQ Part I of II we have discussed  that the world of procurement is continually changing, and this includes the world of eProcurement when it comes to the request for information, a proposal, or a quote and why this process when used properly even with newer tools is still the most effective results delivering procurement process available.

The Request for Quote (RFQ) Part II of II Details, Missing Pieces and Communication

Details, Details, Details. In the RFQ, send an invitation to potential suppliers containing a detailed list or description of all relevant parameters of the intended purchase, such as:

  • Personnel skills, training level or competencies
  • Part descriptions/specifications or numbers
  • Quantities/Volumes
  • Description or drawings
  • Quality levels
  • Delivery requirements
  • Term of contract
  • Terms and conditions
  • Other value-added requirements or terms
  • Draft contract

An RFQ event can have many suppliers participating in your project. They will all be actively participating during the RFQ in a preset timeframe, which is usually 20 minutes, but can be adjusted when the line item count grows over 25 items.  Within the 20 minutes, suppliers can lower their bid pricing an unlimited amount of times. Like sealed bidding, suppliers cannot see one another’s pricing. Suppliers see whether or not their quote is the low quote through the use of a low quote indicator when they achieve that milestone by fishing for it. Suppliers may also see their ranking at a predetermined point in the RFQ process if the strategic decision to use that feature has been made.

Missing Pieces. An easy way to establish specifications and develop base pricing is from the RFP responses submitted earlier.  Many times, a list of suppliers is established that has already been educated on entering pricing through an online sourcing or bidding tool. The RFQ gives the supplier the opportunity within the live RFQ to view whether or not if they have any low quotes and to “sharpen their pencils” in order to lower their pricing if they wish to do so. From this RFQ, an award of business based on the results can be made.

Training and Communication. Suppliers should be trained as to how to use the eProcurement system, how to place their bids, how to look for the low quote indicator, and also be communicated with relative to questions, pricing, and products and services you are looking for. The overall goal is to drive the best overall value, so suppliers should have an opportunity to enter notes during the RFQ. This additional information often offers additional hidden savings opportunity, i.e. if 1,000 cases are purchased rather than 900 cases, additional discounts, or other value-added services such as freight waived for the first 6 months of a 1-year contract if awarded the business. These additional notes can provide and overall benefit, rather than just a low-price win.

Returning to our original RFI example of a company owning a building they intend to repurpose as a Distribution Center, the process began as an RFI in order to understand what was needed so it could be followed by an RFP in order to collect further detailed information and base pricing. These two steps were then followed by an RFQ to compress the pricing from suppliers who participated in the RFP and were invited to this final stage.  In this last stage running the line items as a complete list of materials rather than an item by item list, total cost of freight, total installation pricing- which could include teardown pricing which could also be listed as its own line item can have great value and provide the opportunity for the suppliers to keep their focus where it is needed rather than on 100’s of individual line items submitted during the RFP. The four items mentioned here represent the largest spend items of the proposal and have the opportunity to lower pricing by 20% or greater from the original RFP pricing.

Determining what stage of the eRFX process to begin with and how to assemble those pieces can be a difficult puzzle to put together especially if a procurement team is already engaged in a myriad of other daily activities. A good Strategic Sourcing solution provider can help put these pieces together in a way that requires less of your company’s time and resources.

If you’d like to learn more and can’t wait for the series conclusion, please contact a SafeSourcing Customer Services associate, they’d be thrilled to hear from you.

Thanks.

It really is a CRITICALLY GOOD time to look at your supplier contracts.

Thursday, August 20th, 2020

 

 

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

It appears it would be counter intuitive for senior management to ask procurement professionals to explore all contracts in the current environment. There is so much uncertainty relative to the economy, COVID-19, and related internal and external adjustments as well as an upcoming election that may change how we look at everything.

With all of that said, public companies are going to have to continue to report earnings while they plan for an uncertain future. Small businesses while not having to report are equally as focused on keeping the doors open. While the numbers vary as they seem to with everything today, approximately 100,000 businesses have failed forever. Many more will over the next 6 -12 months. Depending on the source you use, nearly 17 million Americans are unemployed. So much to focus on, how to cope?

While the statistics are daunting, all these businesses were buying products and services from the supply chain. As such, it is not surprising that the supply chain companies have lost sales/revenue and are very eager to find new business. They are looking at their existing customers to lock in business, new verticals with similar characteristics to their existing customers to cannibalize from and their existing markets to offer unsolicited proposals at great initial pricing. I am sure there is not a senior leader that has not been told of unsolicited offers for current expense categories at drastic improvements in pricing. So, the market is ripe, but it will not stay that way forever. And here is a caution; Do not accept those initial offers. There is still better pricing available.

At SafeSourcing, we have not laid off anyone since the 1st of the year and have dramatically reduced our expenses on everything. One example is our phone service where we reduced costs by 45.3%. Another is our insurance policies where we reduced costs by 13%. There are many others with significant savings as well.

I have often used the following as a tongue in cheek response to the question I have heard thousands of times. Why should we focus on expense reduction with SafeSourcing? My response is, do you have a dollar bill? Even in todays world most folks do. I ask the questioner to take it out of their purse or wallet while I am taking a $10 bill out of mine. I offer to trade one for one. While many already see my point, no one has ever turned down the exchange. A 10X return? Why would you not do it. Both bills are the same size, color, and government backed. It is the same specification right? So, an easy decision. I then add that when you use SafeSourcing, our ROI is quite often much higher. Your time commitment is minimal, and you receive and equal or better specification or service or both at a lower price! So, Why Not?

The times are hard, headcount may be down, and you have so much to focus on! Let SafeSourcing help you reduce your costs on everything from capital, costs of sales/goods and expense. Your numbers will look better now and in the future and you will not have to use headcount as your best cost management tool. Our average customer savings over the last 18 months are in excess of 24%. Yours could be too!

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.

 

 

 

 

Better Business Outcomes

Thursday, August 13th, 2020

 

Today’s post is from our archives at SafeSourcing, Inc.

Over 30 million Americans don’t have access to modern broadband. The Federal Communications Commission announced that it would hold the biggest spectrum auction in U.S. history, aimed at bolstering 5G network deployment. The bidding will see roughly 3,400 megahertz across three spectrum bands auctioned off for commercial use. The auction is scheduled to start in December 2019 and may be the largest in the country’s history. The FCC also stated that there would be more auctions after this one. Three rounds of clock-phase bidding will be held each day at this stage in the auction. The clock auction format being with a “clock phase” that lets participants bid on generic blocks in each Partial Economic Area in successive bidding rounds, followed by an “assignment phase” that allows the winners of the generic blocks to bid for frequency-specific license assignments. Thirty-eight bidders qualified to participate in the auction.

In an auction, the activities are targeted towards researching/inviting suppliers and ensuring that any existing supplier has an opportunity to propose enhanced pricing or better terms. The auction is usually held via e-procurement and has a number of activities concluding with a short time period with dynamic bidding ensuring the pricing moves rapidly downwards. This type of auction provides any number of advantages including:

  • Suppliers are encouraged to bid low and provide good terms in order to win the contract.
  • The process is seen as a fair way of awarding government contracts as well as those from large monopolistic companies.
  • It is a low cost, much quicker method of finding new suppliers.
  • Negotiation costs are almost zero.

SafeSourcing eProcurement, particularly reverse auctions, is a sure way to increase your bottom-line and enhance the spend process. Utilizing new technologies will add profit dollars without selling one new customer buying your products or services. The savings are traditionally 10X your investment in e-Procurement tools. You’re just accepting a different way to silicate bids/pricing even with your incumbent vendors that you currently work with.

For more information on how SafeSourcing can help in your procurement efforts, or on our Risk Free trial program, please contact a SafeSourcing Customer Service Representative

 

 

 

 

Category Discovery is a critical step in building your e-negotiation strategy?

Wednesday, August 12th, 2020

 

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

Category discovery is the basis of any quality implementation of an e-negotiation strategy. It is essential that this process be supported by the company’s executive management because they hold the key to unlocking access to data sources across the enterprise. This process will include working with all category managers, buyers, other procurement knowledge workers and anyone that participates in sourcing to uncover what you don’t know in support of your Requests for Information (RFI), Proposals (RFP) and Quotations (RFQ).

The first step in this process is the understanding of where the data is hiding and in most companies large and small it is. Here’s a list to get you started. Data discovery generally comes from two sources; Internal and external.

Examples of Internal and External Data Sources

1. SLRP
2. Budgets
3. General Ledger
4. Detailed P&L
5. Purchase Orders
6. Contracts
7. Detailed Vendor Listing
8. Product List by Vendor
9. Invoices
10. Product cut sheets
11. Copies of orders
12. Brochures
13. Supplier Websites
14. Annual Reports

While all of these data sets have been around for years, you may also have an ERP system, Data Warehouse, spend cubes for either or any number of new AI tools related to these systems. The old saying goes, garbage in, garbage out! The question is do you trust your data?

If you’d like some help with your category discovery and have a General Ledger you’d like analyzed, please contact a SafeSourcing Customer Services Project Manager.

As always we look forward to and appreciate your comments

It’s a real crime that so many companies continue to stay on the sidelines!

Friday, August 7th, 2020

 

 

Todays post is from Ron Southard CEO at SafeSourcing

Unfortunately some 70% of companies still do not use eprocurement tools. If they did, their results would be better. SafeSourcing can give you customer references that exceed the 17X ROI mentioned above. So what happens when you combine your spend with another company?

Generally speaking, the greater the spend amount, the more interest you will get from potential vendors. As a result, many of our customers have been turning to collaborative eProcurement events in order to benefit from the additional savings that higher volumes can generate. Let’s take a look at a few of the benefits of getting involved.

1. Higher savings due to aggregate volumes
2. Improved payment terms
3. Larger vendor pool
4. Greater ROI
5. Source smaller category spends

Based on the five benefits listed above, perhaps it’s time to try a collaborative event. You may ask; “how would we become involved?” The answer is simple. Contact your SafeSourcing customer services representative and ask if there are any open or upcoming opportunities in which you could participate. Similarly, if you have any upcoming projects either large or small, ask your partner to attempt collaboration within their customer base.

Here’s an example of savings generated from a recent collaboration. In this scenario, our customer was in need of a relatively small spot buy for replenishment purposes. Their spend in this category was actually quite low and was actually the lowest overall amongst the participating companies. In this example, the customer saved almost 37%. I find it difficult to imagine that they would have done so well without the eProcurement process. Further, this is evidence of the benefits of the collaborative process as their pricing was likely much better off as a result of the aggregated spend.

So, are you ready to get involved, or will you continue to stand on the sidelines?

We look forward to and appreciate your comments.

During a Pandemic like COVID-19, Is there benefit to a large retail supplier database?

Tuesday, August 4th, 2020

 

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

Maybe you’re looking for KN95 face masks, gloves or other medical safety equipment. Do you know all of the off shore suppliers and how to contact them? We do!

Maybe your current supplier can’t handle your volume any more because of the Pandemic! Where do you look.

Once you are armed with a robust Global Supplier Database such as  SafeSourcing’s  SafeSourceIt™ Global Supplier Database  and it’s easy to use query tool.

If you need assistance, just contact us at 1-888-261-9070 or  marketing@safesourcing.com.

We’re here to help!

“You Buy It, We Procure it”

Friday, July 31st, 2020

 

Today’s post is from our archives at  SafeSourcing Inc.

When working with current or new customers, I often ask what’s next in your pipeline or purchases. Too often I get a response similar to we don’t have anything coming up or we aren’t buying anything big today/this month/this year. A purchase doesn’t have to be considered big in the moment of ordering, but over time the expense adds up. For instance, copy paper is bought for almost every single office or location. While it might be a ream or case at time, added up might be in the thousands of dollars annually. Perhaps you own a fleet of vehicles and purchase tires multiple times a year. Without a pricing agreement in place to ensure the best possible pricing all year round, you are losing money.  Within each of these purchases, it might seem small or a onetime purchase, however, an annual spend or general ledger (GL) will show at the end of the year as a significant spend to the company.

SafeSourcing can work with your company to identify purchases and potential saving opportunities through our SafeSpend™ analysis. This presents your company with an overview of where not just the large purchases are, but where the small purchases are that add up to large purchases. This will give you the view into saving potential that SafeSourcing can offer with various sevices. Remember… “ If you buy it, we procure it”!

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.

 

 

 

How is SafeSourcing different from the competition?

Thursday, July 30th, 2020

 

Today’s post is from our archives at SafeSourcing Inc.

 

customersat

 

 

 

 

 

 

 

SafeSourcing’s professional service offerings support our mission of providing information and services to our customers through e-procurement best practices that proactively support e-procurement events from category discovery to results analysis. As part of our full service offerings, this also includes ROI delivery and focus on consumer safety and environmental standards in the global supply chain. Our offerings include, but are not limited to:

  • Buyer Training
  • Category Discovery
  • Category to Market Strategy
  • Event Set-Up
  • Event Training
  • ROI Delivery
  • Supplier Safety Certifications
  • Supplier Selection
  • Supplier Training

partner

 

 

 

 

 

 

 

 

Are you interested 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.