Archive for the ‘E-procurement’ Category

Old Glory – The Red, White and Blue.

Tuesday, June 20th, 2017

 

Today’s post is by Gayl Southard, Administrative Consultant at SafeSourcing.

We have recently celebrated Memorial Day and Flag Day and the Fourth of July is coming up quickly. We certainly see a lot of Old Glory this time of year.   The following is just a little flag trivia:

  1.  Betsy Ross is credited with designing the flag, but there is almost no evidence to support this. The only evidence was from her own grandson in 1870, when he presented The Society of Pennsylvania in Philadelphia with affidavits from his own family members as evidence. Early journals from the Continental Congress claim Francis Hopkins deserves the credit.
  2. Karen Burke of Walmart’s Corporate Communications stated Walmart sold 115,000 flags on September 11, 2001 compared to 6,400 on the same day in 2000.
  3. A 17-year old student by the name of Robert G. Heft, designed the flag as it appears today. With the addition of Alaska and Hawaii as states, he designed the 50-star flag as a history project. He got a B- from his instructor that was later changed to an A when President Dwight D. Eisenhower chose Heft’s design.
  4. Six flags were planted on the moon during the Apollo missions. Only one flag fell. According to Buzz Aldrin, the one that fell was blown over by Apollo 11 liftoff from the moon’s surface.
  5. According to the US Department of State, the official colors are “old glory red” and “old glory blue.
  6. Flag Day is not an official federal holiday outside of Pennsylvania and New York. New York doesn’t observe Flag Day on the 14th, but rather the second Sunday in June.
  7. Richard Williams the animation director of “Who Framed Roger Rabbit” said he modeled the rabbit’s colors after Old Glory (red overalls, white fur, blue tie). It looked like an American flag and subliminally everyone like it.
  8. There are federal regulations governing the handling and display of the flag (the U.S. Flag Code) in advertising or printing or anything intended for temporary use or display.
  9. Old Glory was a nickname for a particular U.S. flag. It was owned by a sea captain given to him by a woman in his home town of Salem, MA. He named it Old Glory after seeing it on his mast in 1831. The name became synonymous with the American flag.

For more information on SafeSourcing and how we can help you with your sourcing needs, or on our Risk Free trial program, please contact a SafeSourcing Customer Service representative. We have an entire team ready to assist you today.

 

Retaining Traditions

Friday, June 16th, 2017

 

Today’s post is by Dave Wenig, Director of Sales, North America at SafeSourcing

Even the best planned eProcurement initiatives, sponsored as they should be at the executive level, are susceptible to one common challenge. Moving to eProcurement, just like any change, will require an organization’s resources to support the change. It’s important to understand that the individuals required to support eProcurement must be coached and must buy into the program. Sometimes, however, individuals or teams within the organization will be reluctant to adopt to the change.

It’s understandable that we all believe our own techniques and processes are best. After all, we’ve learned and honed these over the course of our careers. That makes it more difficult to accept change. Some people may even feel threatened by change.

Knowing this, I’ll offer a couple suggestions to help ease the transition and provide an atmosphere that encourages each individual resource to embrace the change and not fear it. This does not necessarily mean that existing techniques and processes are no longer valuable. In fact, certain traditional purchasing concepts will continue to play as integral a role in eProcurement as they did before eProcurement. For example, vendor relationships will continue to be necessary.

Encourage culture: Spread the good news. Did Marketing just have a great month of savings? Share that with your other business units. We’ve seen tremendous momentum generated by posting a scoreboard where BU’s savings percentages are posted on a regular basis. This often drives friendly competition.

Keep positive: Focus on the wins. When you see big savings, applaud it. The worst thing you can do is to ask why you were overpaying before. Instead, focus that energy on targeting the next category for savings opportunity.

By using these and other techniques to encourage adoption of your eProcurement process and retaining certain key elements of traditional purchasing, you will pave the way for success.

Dave Wenig is the Director of Sales, North America at SafeSourcing. For more information, please contact SafeSourcing.  

We look forward to your comments.

 

Who comes first?

Tuesday, May 2nd, 2017

 

Today’s post is from our SafeSourcing archives.

When completing a successful eRFX event, who comes first? “The client always comes first” is the general answer, but what about the suppliers? The suppliers’ full participation brings success to your event. This raises the question, “does the supplier come first?”

With eRFX events on a rise and being used with many companies now it allows a competitive, fair, and easy quoting process for the supplier. Suppliers’ full participation is necessary for a successful eRFX event. The following steps are crucial to a successful event:

•  Detailed and thorough eRFX requirements- If the scope of work or supplies does not make sense to you it probably will not make sense to your supplier.

•  Be open and ready for feedback and questions from suppliers- if you dismiss their questions and concerns, they will in turn feel the  information is inadequate and could either provide quotes that your client cannot use or will quote beyond your clients’ needs to cover their liability.

•  Continuous engagement between the supplier and intermediary- Your suppliers may be experienced with eRFX events, but some will be very frightened of the idea. Keep your supplier engaged with continuous communication and availability.

•  Provide feedback- The supplier put in a lot of time and effort in to provide competitive pricing. Acknowledge that. Follow-up with suppliers after the award of business has been made. This is going to be the reason they engage in another eRFX event. Provide feedback to the suppliers when necessary.

It is not always the outcome of the quote, so even if the supplier did not get awarded the business, which impacts their thoughts on eRFX events; it is the process that leaves an impact on the supplier. The supplier will be encouraged by the process and feel confident in the quotes provided to your client.

We, at SafeSourcing, practice this level of service to all suppliers.  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.

Savings Now

Tuesday, April 18th, 2017

 

Today’s post is by Dave Wenig, Director of Sales at SafeSourcing Inc.

Many post have been written about the reasons for implementing eProcurement into your purchasing process. Today, we’ll assume that this decision has already been made. The question now is how do you start realizing savings? When will we see the results?

The reality is that you should be able to see results within the current quarter. Whether or not you do depends on several factors, but is completely within your control.

First, have you targeted categories that range in complexity from simple to complex? The quick win categories are often fairly simple and can be achieved while you continue to work through the details necessary for more complex categories. Make sure that you constantly achieve savings by avoiding the pitfall of only selecting complex categories, especially as you begin sourcing with eProcurement. The excitement from success is contagious

Second, you’ll need to be sure that the entire team understands the eProcurement process. The most successful eProcurement initiatives are driven at the C level. From there, everyone involved in the purchase process should know what is involved in the process and how the award of business will be made. This will go a long want to prevent rogue spending and negotiations with vendors outside of the eProcurement process; both of which will derail your initiative.

Third, there comes a time to simply take action. Avoiding analysis paralysis is necessary to achieve savings. It’s understandable that you wonder if making optimization changes to your existing program will drive better savings or to seek out higher volumes in search of better savings. However, the time required for these considerations comes at a cost as you continue to purchase at your existing price. The alternative? Decide to reduce your current costs now and plan to optimize process or collaborate and renegotiate again only once you are ready. This allows you to buy at a much better cost while you work on your longer term strategies within that category.

There are other considerations as well, but the fact is that the success of your eProcurement program depends on your organization’s commitment to identifying and achieving savings at every opportunity.

For more information, please contact SafeSourcing.

We look forward to your comments

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.

Full Software as a Service

Friday, February 17th, 2017

 

Today’s post is by Dave Wenig, Director of Sales, North America at SafeSourcing.

If you’re a follower of eProcurement and a reader of our blog and other great blogs out there, you likely understand that there are many different ways to leverage eProcurement in an organization.

Chiefly, we recognize two distinct types; those that are software or platform oriented and those that are service oriented. Both types may refer to their offering as Software as a Service (SaaS). Setting bias aside, I can acknowledge that there are pros and cons for each and that both have their merits. Picking back up my bias, I’d like to elaborate on some of the reasons why we recommend choosing an eProcurement provider with a service oriented approach. You might think of it as Full-Service Software as a Service (FSaaS).

First, and not to sound like a broken record, is time to value. When you’re standing up a new eProcurement platform, you have to be conscious of how long it will take before the results – your savings – are realized. When you work with a service oriented provider, you can lean on your provider during the first weeks and months as your organization gets up to speed. The provider can offer intellectual property (IP), expertise, staff augmentation through customer services, and the platform itself. The combination of these offerings is what will, ultimately, provide fast time to value. If you’re doing it right, results should be realized in the current quarter.

Second is cost. While it might seem as though the software or platform only options will be the lower cost alternative to the full-service options, you have to look at the total cost of ownership (TCO). Again, while the upfront software or platform only costs may seem low, you have to be careful of the factors that will drive your actual costs up. These might be user training, support, additional features, or additional user licenses. Also, to stand up an eProcurement platform without the assistance of a full-service provider, an organization should be prepared to allocate several FTEs to use the tools, work with suppliers, and provide supplier support. The fully loaded cost of these employees should be factored into your TCO estimate and should not be underestimated.

Many of the most successful clients that I have worked with have found their success using a full-service provider. Some have tried a software or platform only approach as well and have ultimately determined that the right approach is full-service.

Dave Wenig is the Director of Sales, North America at SafeSourcing. Dave or any member of the experienced team atSafeSourcing would be happy to discuss how SafeSourcing can help you with your eProcurement planning. For more information, please contact SafeSourcing.

We look forward to your comments.

Where to start with eProcurement

Tuesday, January 17th, 2017

 

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

When an organization begins leveraging eProcurement for its sourcing needs, there are many great ways to select the initial categories. In today’s post, we’ll discuss the three most common considerations that we see and often recommend to our clients who are either beginning their utilization of eProcurement or are looking to strategically plan their sourcing schedule.

One consideration when choosing categories has to be the spend. We recommend considering large spend categories as they are often a great way to reduce costs significantly. While the reward of sourcing your large spend categories will be great, bear in mind that these categories are likely to be more complex.

Another consideration is the number of suppliers in the category. We work with our customers to identify and understand categories with high supplier counts. Once we understand the category better, we often find that there is opportunity to reduce the number of suppliers. Often there are many suppliers who are all providing similar products or services. Reducing the number of suppliers creates an opportunity to better control the category and to create a larger opportunity for savings by consolidating the spend as well.

A third consideration that we recommend is to identify quick categories that can be sourced right away. These categories should be of a relatively lower complexity, but should also still be categories where there is sufficient spend and very large savings opportunity. We identify these quick categories as great areas to begin and to help build momentum for the overall eProcurement initiative within the organization.

Ultimately, where to start is driven by your organization’s spend and is best decided after careful consideration including analysis of spend data and budgets. We work with our customers to develop this plan with them and more often than not, the outcome is a plan that has a healthy mix of each of the three types of categories that we considered in this post.

Dave Wenig is the Director of Sales, North America at SafeSourcing. Dave or any member of the experienced team at SafeSourcing would be happy to discuss how SafeSourcing can help you with your eProcurement planning. For more information, please contact SafeSourcing.

We look forward to your comments.

 

Enjoying the Benefits of eProcurement Part II

Tuesday, December 20th, 2016

 

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

Recently, I wrote about “Enjoying the benefits of eProcurement.” In this post, I wanted to elaborate on that same topic. Specifically, my aim is to highlight strategies to perpetuate your enjoyment of the benefits of eProcurement while minimizing the impact on your organization.

Once you start enjoying the benefits of eProcurement in your organization, you may find an unusual challenge. You might feel that you are generating savings faster than you can actually realize those savings. As previously discussed in me last post, there are several reasons why you might feel that way, from sample reviews to internal discussions about the results. That said, you need a plan in place so that you continue to generate savings and so that you wind up with rogue spending outside of your eProcurement process.

One way to address this challenge is to have a clear understanding of your timelines. Work with your eProcurement partner to identify the milestones in your larger Procure-to-Pay lifecycle. Once you understand when each milestone will occur, you can better manage the timing of all projects. For example, you might be able to time lower-priority projects so that your team does not become inundated with samples. Properly timing these projects will also help keep the contracts from piling up as it comes time to begin working with a selected supplier.

Another way to address this challenge is to work closely with your eProcurement partner to identify areas in which you can take advantage of their expertise to streamline key steps in the Procure-to-Pay lifecycle. For example, are you leveraging your partner to help you track and manage sample requests? While this task may seem fairly routine, it is very important to the award of business decision making process and can also become time-intensive. Work with your eProcurement partner and ask them to help. Lean on them as you would an internal resource.

While these are not the only two ways to create efficiency in the eProcurement process, they are two great ways to ensure that your organization is constantly generating savings and is constantly enjoying lower costs as a result of eProcurement.

Dave Wenig is the Director of Sales, North America 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.

 

You can procure anything, including Candy Canes Part I!

Tuesday, December 13th, 2016

 

Today’s post is by Heather Powell, Director of Customer Services at SafeSourcing Inc.

What does it take to make a candy cane, package it, market it, and distribution? All of these involve procurement. Today, the candy cane makes up a significant amount of the $1.4 billion Christmas candy market. In fact, billions of candy canes are made and consumed each year.

First the history of the candy cane: from the HomeBoy Media Network!

The candy cane is a Christmas tradition that many hold dear but nobody really knows why. Let’s face it, the only things we really know about candy canes is that they taste good and that they are red and white.

Whether the story of the candy cane is a legend or if it is true is not certain, but this is how the story goes: About two hundred-thirty years ago at the Cologne Cathedral in Germany, the children that went to church there were really loud and noisy. They often moved around and would not pay attention to the choirmaster.

This was especially difficult for the choirmaster when they were supposed to be sitting still for the long living Nativity ceremony. So to keep the children quiet, he gave them a long, white, sugar candy stick. He couldn’t give them chocolate or anything like that because the people at that church would think it was sacrilegious. So he gave them the stick and he bent it on the end to look like a cane. It was meant to look like a shepherd’s cane, and so it reminded the children of the shepherds at Jesus’ birth.

In 1847, a German-Swedish immigrant in Wooster, Ohio put candy canes on his Christmas tree and soon others were doing the same. Sometime around 1900 candy canes came to look more like what we know them as today with the red stripes and peppermint flavoring.

Some people say the white color represents the purity of Jesus Christ and the red stripes are for the wounds he suffered. They also sometimes say that the peppermint flavoring represents the hyssop herb used for purifying and spoken of in the Bible. The shape also looks like the letter “J” for Jesus, not just a shepherd’s cane. It is possible that these things were added for religious symbols, but there is no evidence that is true.

Around 1920, a man in Georgia named Bob McCormack wanted to make candy canes for his family and friends. He later started mass-producing candy canes for his own business which he named Bob’s Candies. This is where many of our candy canes come from today.

Tomorrow we will discuss the raw materials needed to make candy canes.

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.

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.