Archive for the ‘E-procurement’ 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.

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.


e-Procument is like Couponing

Tuesday, November 15th, 2016


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

Relating my life to e-procurement

e-Procurement is a lot like couponing, in the sense you have to approach it with a different mindset. For example, with couponing you have to leave behind the old way of shopping and open your mind to something new.

The old way of shopping:

  • long grocery lists planned out without considering price
  • weekly menu planning
  • bulk shopping trips to the local wholesale store

The new way of shopping :

  • Meal planning according to sales
  • Shopping at various stores for discounts and savings
  • Buying more while spending less because you stock up on product while it’s on sale

This same concept applies as it relates to procurement versus e-Procurement.

The traditional procurement way involves:

  • procurement was paper- and conversation-based
  • done face-to-face, or via telephone
  • longer turn around approval time

The e-procurement way involves:

  • an online procurement process to cut out steps and save money
  • Simplified software and faster turnaround times
  • Real-time interaction with pre-approved suppliers
  • Orders can be approved online and completed within minutes

We, at SafeSourcing want to you to see the savings and ROI the way couponers get excited about the saving in their pocket. Let SafeSourcing better 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.





Account Manager – Easy Enough Correct

Monday, November 7th, 2016


Today’s post is by Steven Belvin,Account Manager at SafeSourcing

An Account manager is a person who is responsible for handling the accounts of a company, right?

Correct. However, there are many more things an Account Manger may handle for a company. According to the Chartered Institute of Procurement & Supply (CIPS) website ( an Account Manager can be defined as “In the hierarchy of sales positions, an account manager is responsible for managing the relationship with a series of accounts. Typical responsibilities include diagnosing business opportunities, planning communications, managing relationships, negotiating agreements, reporting and troubleshooting problems.” (CIPS). As I step into the Procurement world as an Account Manager, I see where this is very true. As Account Manager we are all responsible for understanding a company’s needs and how to get them that fast and efficiently. Also, it is important for us to maintain relationships with different companies and figure out the correct method of getting them both to an agreement that is beneficial to both parties. However, our work is far from over, we also have to maintain the relationship with both companies and extinguish any problems before they become a major issue.

As one can see this seems to be a lot of work, especially for one who is trying to run an efficient business and hiring another employee just to handle this aspect of the company seems to just be a waste of resources. This is where SafeSourcing comes into play. SafeSourcing is a Strategic Sourcing company. What that means is we approach Supply Chain Management in a way that formalizes information to help a particular company gain leverage on its purchasing power. Information like Delivery time of current supplier, Cost Analysis, Quality Assurance, etc. By analyzing this information we find the best values in the market.

For more information on how SafeSourcing can assist your team with this process 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.


“CIPS – Procurement-glossary.” Charted Institute of Procurement & Supply. N.p., n.d. Web. 20 Oct. 2016.

The Advantages of e-Procurement

Tuesday, October 25th, 2016


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

It is not easy to implement e-procurement and it can have its challenges; additionally, it takes time for business managers and procurement departments to fully accept it. However, with SafeSourcing as your partner, we can show you the advantages of e-procurement and make the transition to e-procurement much smoother by the following:

Reducing Costs

Costs can be reduced by leveraging volume, having structured supplier relationships and by using system improvements to reduce external spend while improving quality and supplier performance1. E-procurement eliminates paperwork, rework and errors1.

Visibility of Spend

Centralized tracking of transactions enables full reporting on requisitions, items purchased, orders processes and payments made1. E-procurement advantages extend to ensuring compliance with existing and established contracts1.


Internal customers can obtain the items they want from a catalogue of approved items through an on-line requisition and ordering system1. Procurement staff can be released from processing orders and handling low value transactions to concentrate on strategic sourcing and improving supplier relationships1.


Standardized approval processes and formal workflows ensure that the correct level of authorization is applied to each transaction and that spend is directed to draw off existing contracts. Compliance to policy is improved as users can quickly locate products and services from preferred suppliers and are unable to create maverick purchases1.

Using technology

E-procurement advantages can only be fully realized when the systems and processes to manage it are in place1. Software tools are needed to create the standard procurement documentation: electronic requests for information (e-RFI), requests for proposal (e-RFP) and requests for quotation (e-RFQ)1.

These are proven methods to source goods and make the framework agreements that offer the best prices. 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.


References: 1)

eProcurement Time to Value

Wednesday, October 19th, 2016


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

In eProcurement, one important, yet often overlooked measure of success is time to value. Of course, one of the primary goals of any eProcurement strategy is to reduce spend for the goods and services that an organization requires.

For the sake of this post, I am defining time to value as the time between when you determine that you would like to host an eProcurement event, such as a live Request for Quote (RFQ), to the time that you can begin ordering with the newly negotiating pricing from that eProcurement event. I tend to see that we focus heavily on the savings result, but far less on the amount of time that was required to complete that project. The reality is that those two goals are both important and actually complement each other. The sooner you conclude your eProcurement event, the sooner you are able to realize the savings.

There are several key reasons why an organization needs to monitor time to value closely. A contract expiration date is one factor that creates pressure to attain results quickly. When a contract is set to expire or to automatically renew, it is important to negotiate quickly to avoid any unfavorable outcomes. Another factor is seasonality. For certain products and services, the negotiation must be done in advance of a particular season. For example, in northern climates, snow removal contracts should be in place well before the possibility of snow.

Every organization will set its own time to value success criteria. I always advise that projects should typically range from four to six weeks and that clients should expect to see significant savings that can be achieved and realized in the current quarter.

Dave Wenig is a Regional Sales Manager at SafeSourcing. Dave, or any member of the experienced team at SafeSourcing, would be happy to discuss how SafeSourcing can help you achieve faster time to value in your eProcurement efforts. For more information, please contact SafeSourcing.

We look forward to your comments.