Archive for the ‘E-supply Chain’ Category
Friday, July 8th, 2011
It’s hard to believe that The North American Free Trade Agreement went into force on January 1st of 1994 or seventeen years ago. This agreement covers a trade bloc consisting of the United States, Mexico and Canada.
How well this agreement has worked is a completely different subject at least in part. Can you believe that it took until this year for the governments of the United States and Mexico to agree to let each countries trucks travel on each others highways. Arguments, tariffs, security issues and other concerns have kept this vital part of any free trade zone from working as designed.
Maybe we have it right now and sourcing products from our free trade zone partners will be a bit easier.
We look forward to and appreciate your comments.
Posted in E-supply Chain, Global E-procurement, Supply Chain Procurement
Thursday, July 7th, 2011
Well if that’s the case why not apply for B Corporation certification. In essence this would be putting your money where your mouth is. At this point there are no real hard financial incentives for a company to do this. At least four states have passed or proposed B Corp legislation, but it is pretty clear that all will in the future.
So just what is a B CORP? I’m glad you asked. If you visit the Certified B Corporation website you’ll learn that Certified B Corporations are a new type of corporation which uses the power of business to solve social and environmental problems. B Corps are unlike traditional businesses because they:
• Meet comprehensive and transparent social and environmental performance standards;
• Meet higher legal accountability standards;
• Build business constituency for good business
SafeSourcing is going to add B Corporation certification to our database of supplier certifications and ask companies our customers’ partner with what their plans are to achieve B Corp Certification as part of their current or future CSR initiatives. We do the same for over 30 other certifications today such as Eco Logo, SQF and LEED.
If we do a small part and our customers do a small part and their suppliers do a small part, the parts will add up. Pay it forward and do your part.
We look forward to and appreciate your comments.
Ron Southard CEO SafeSourcing
Posted in Business Sourcing, E-supply Chain, Green eProcurement Practices, Sourcing Safe Foods, Sourcing Safe Products, Sourcing Strategy
Tuesday, June 28th, 2011
For weeks, North Dakota and Montana, the nation’s two largest producers of durum wheat have been pounded with heavy rain that will likely mean a drop of up to 47% of durum wheat production.
Durum wheat, or “macaroni wheat”, is the hardest of all wheat types and that together with its high protein and gluten content make it the perfect wheat to be used in the manufacturing of pasta.
Due to the heavy rains farmers have been unable to get crops planted and even now they are out of time to plant crops in time to avoid the pre-winter frosts and will likely have a little more than half of the durum wheat production as normal, affecting prices of related products all over the world.
Durum wheat was up over 52% in May and the May U.S. pasta prices were the most expensive on record while other durum wheat producers like Canada saw prices jump 47% in May. With fewer acres of wheat being produced the pasta prices will be affected accordingly.
Companies producing pasta products like Kraft with their Macaroni and Cheese and Campbells with products ranging from noodle-based soups to Spaghettios, have already announced increases in many of their products due to the lack of durum wheat production and subsequent higher durum wheat prices.
In product categories such as this one it is more important than ever to make sure that you are doing everything you can to keep the cost of goods controlled with tighter contracts containing index terminology and keeping the pricing you receive as competitive as possible.
When the supply of product takes a huge decrease in relation to its demand, the opportunity for competitive pricing events becomes a little more difficult, as vendors will have plenty of places to sell their product.
This may be a time to get more creative in other ways as far as length of contracts, other services or products you may agree to take on, or other considerations that will allow you to get competitive pricing on a high demand product category. It is hard to predict what climatic conditions such as all of the spring rain will do to agricultural products, but smart procurement professionals can learn to leverage other techniques in order to keep their costs for products affected by these conditions under control.
For more information on SafeSourcing and how we can assist your company with sourcing these goods and services, please contact a Customer Service Representative for more information.
We hope you have enjoyed last week’s Five Part Series and look forward to and appreciate your comments.
Posted in B2b Supply Chain, E-procurement, E-supply Chain, Supply Chain Procurement
Wednesday, May 25th, 2011
If you follow these simple guidelines it will also encourage senior management to consider placing more of the companies spend under the umbrella of e-procurement tools and specifically reverse auction tools.
Once you are armed with a robust retail focused supplier database and related e-procurement tools:
1. Conduct a detailed category discovery
a. Learn all there is to learn about the customers way of doing business.
b. Walk, observe and annotate all activity at distribution centers and warehouses.
c. Walk an array of stores and review all formats of the enterprise.
d. Compile a list of all corporate categories
2. Rank categories by
a. Total spend
b. Importance
c. Sourcing frequency
d. Quality objectives
e. Look for aggregation opportunities
i. Lighters, lighter fluid, flints, fire sticks.
3. Conduct supplier discovery
a. Rank suppliers
i. Size
ii. Experience
iii. References
iv. Environmental certifications
v. Safety Certifications
4. With all of the above in hand; develop a three year game plan
a. Identify suppliers for each event over the three years
b. Develop savings targets by category
c. Develop a three year time line for all categories
5. Role Play internally the first year for a test category
a. Ask the following questions
i. How will you award the business
ii. Review alternate scenarios
iii. Review savings by scenario
iv. Determine which suppliers will be invited back
v. Determine what new suppliers from your database search will be invited during the next year or cycle.
I’m sure you can fill in a few more items prior to your launch, but the key is to have a plan and to write it down. Now you do.
We look forward to and appreciate your comments.
Posted in E-procurement, E-procurement Solutions, E-procurement Tools, E-supply Chain, Sourcing Strategy, Strategic Sourcing
Tuesday, May 17th, 2011
Last week I posted a blog about the importance of onsite visits with your suppliers, how to prepare, what to look for, and the value of performing these visits. This week we will be taking a look at some of the additional things that you need to think about when visiting a supplier in another country.
Visits to international sites will need to encompass the same types of information gathering as a domestic one such as reviewing the cleanliness of the facilities, observing production, logistic and storage processes, but there 3 important areas that must be considered in addition to these that may determine the success or failure of the visit.
Language – Assuming you are visiting a supplier that is not located in a predominantly English-speaking country, the capability to communicate onsite is an important one that should be addressed well in advance of the visit. Many times the supplier will have staff that is fluent in more than language and can act as an interpreter, however procuring your own interpreter is also a suggestion and possibility. Also, some basic considerations of your own communication style would be to speak more slowly than usual and pause in between sentences to be understood more easily.
Culture – This is an important area to prepare for because in some countries seemingly minor things can create a tense atmosphere. Determining whether to bow and the details surrounding when and how, if the country shakes hands when they greet and which hand they shake with are all important items in some countries and should be learned prior to your visit. On the other hand, it is equally important to note the things that are normally unaccepted behaviors in the U.S. which many times are not viewed the same way in other countries. Americans would generally never answer a phone call in a meeting or show up to an appointment late, but in other countries these behaviors are far less important and frequently occur during the course of doing business.
Capturing the details – Visits to international suppliers generally come with a price tag that is not insignificant to your company, so capturing as much data as possible is important on these visits. Wherever you go during your visit take a notepad and camera with you to record what you see and hear while on the visit. Many manufacturers will allow you to take occasional pictures as long as you ask in advance and have it cleared. Some may not allow it and others may allow it as long as no employees are included in the pictures. Capturing these details will be very useful to you and your team in the future and can potentially save trips for other employees in the future.
Onsite visits to your suppliers are incredibly valuable and important to your organization and are a terrific tool for knowing who your suppliers are and how they do business. They are also important forums to gather details necessary for later contract negotiations.
We look forward to and appreciate your comments.
Posted in B2b Supply Chain, E-supply Chain, Strategic Sourcing, Supply Chain Procurement
Monday, May 16th, 2011
These author tires of the desire of businesses that are trying to reinvent themselves and in so doing constantly coming up with new buzz words, industry terms and business jargon in order to try and prove that they are thinking differently and as such should be trusted to be on the right path. Maybe their original business plan was just flawed and they are not deserving of our trust.
Lean in any functional area of a business simply means producing more or getting more done with fewer resources. I’m not sure this is a great message for companies that are just launching, trying to grow or improve. If you’ve been around for while, and your customer reads between the lines properly, this may just mean that you did not plan your launch properly or react properly to market indicators in the past.
We all know that lean practices were originally a move to reduce costs in the manufacturing process and since it worked for manufacturing where we are typically talking about thousands if not millions of pieces and parts, other companies began to think why not for our business. As such let’s apply the term lean to the supply chain or the procurement space. Any one that knows the procurement space already understands the lack of resources.
The goal of every business should be to provide the end user or customer with what they want or what you have promised them at a fare price. If you do so, that customer and others that hear about that customers experience should buy more. When this happens, if the business plans appropriately they should grow and grow profitably. And this should create new and sustainable jobs. So, how is this any different than the way businesses were run 50 years go or 100 years ago? The truth is that it’s not.
The decision to not hire, to try and do more with less and to reposition resources rather than firing someone is a better way to run a business. Unfortunately they do not teach this in business school. This author has been through many mergers, acquisitions, downsizings and the like over a lengthy career. One thing you can always count on in these scenarios is let’s cut expenses. You can call it lean, but it’s not.
So, let’s not hide behind the term lean or other business jargon or buzz words.
We look forward to and appreciate your comments.
Posted in E-supply Chain, Procurement Solutions, Strategic Sourcing, Supply Chain Procurement
Thursday, May 12th, 2011
Data models incorporated into effective e-procurement supplier data management programs should be extremely complex. This is why they are much more than a simple online directory. In fact, properly designed high quality supplier databases should be able to provide much of the data you might find in the opening pages of a detailed Request for Information or RFI.
A simple query of this data such as, “show me all companies within a 500 mile radius of the home office zip code that provide this defined set of products and that meet the following safety certifications”, should produce an accurate, verified list of supplier options that benefit the buyer and streamline the procurement process. Additional queries are typically used to summarize additional information related to defining the potential suppliers identified. Providing a list of attributes such as business description, sales volume, years in business, corporate officers, product performance ranges, etc. is the logical next step. The drill down through available information continues from here as the results provided become more refined with each query. As you can recognize, effective supplier data management involves the retrieval of valuable information from a data source that includes a substantial number of records and classifies the results according to the parameters defined.
Where does your data come from and how often do you choose a new source of supply provided by this data.
We look forward to and appreciate your comments.
Posted in B2b Supply Chain, E-supply Chain, Supply Chain Procurement
Tuesday, May 10th, 2011
The following excerpt is from the above titled article.
There is more to an effective e-procurement program than cost reduction.
While buyers frequently record cost reductions in the range of 30% to 40% when utilizing an e-procurement or reverse auction process, the issues of quality and performance cannot be overlooked.
The foundation for successful e-procurement is the supplier database
that has been developed and is maintained by the e-procurement service provider. Significant time and capital investment goes into the development of an effective supplier database. It provides the buyer with a recognizable advantage in terms of classification of supplier capabilities, historical performance and the quality of the products provided.
The scope, accuracy and functionality of the supplier database are critical components for buyers when using e-procurement. These elements allow buyers to identify the best sources of supply quickly and cost-effectively, oftentimes uncovering alternative sources that were previously not even considered. This is one of the major advantages of including the services of an online reverse auction service provider like SafeSourcing in the procurement process.
Supplier data management is an excellent example of pairing technology advancements with intellectual property to produce an effective, economical support tool that benefits both suppliers and buyers – better pricing,better quality and better sources of supply.
Click here in order to view the entire article.
We look forward to and appreciate your comments.
Posted in B2b Supply Chain, E-supply Chain, Supply Chain Procurement
Monday, May 9th, 2011
One of the important practices recognized by many successful procurement professionals is that of performing onsite visits to both their new and incumbent suppliers. So much can be learned about how your suppliers do business that may affect your future decisions and contracts.
Today’s blog will be focusing on visits to domestic suppliers and Part II will have more details on visiting your international suppliers.
If you are dealing with a new supplier and scheduling an onsite visit, this is the opportunity for you to validate all of the details they have presented in their RFP/RFI response or presentation; validating that they have the staff, resources and facilities to handle the demand you are requiring of them.
This will be an opportunity to meet the sales and support team that will be assisting you and your company when the inevitable problem does occur, so take advantage of this time to get acquainted with the supplier’s staff.
If you are dealing with an incumbent supplier, make sure you have thoroughly reviewed your existing contract so that details about the level of service and quality promised can be focused on as part of the visit. Make sure that you request, in advance, any additional reporting from your IT department or from the supplier on the history of the relationship so far. This would include quality issues, shipping issues, product delays, inventory availability or any other special circumstance that may have occurred. This visit will be the right time for you discuss these with the supplier face-to-face.
A final very important area to spend time in your visit, whether new or existing supplier, is the shipping area. Here you will have a very clear idea of how the supplier is organized and you may even get a glimpse at the companies they get their raw materials from as well as other customers they are shipping too for future reference and follow-up. Information found in this area will also go a long way when having contract negotiations with your incumbent suppliers for concessions on how your products and deliveries are handled.
Onsite visits are critical to understanding who you suppliers are and can be extremely valuable negotiation checkpoints. My next blog will focus on the differences and things to consider when visiting international suppliers.
We look forward to and appreciate your comments.
Posted in B2b Supply Chain, Contract Management, E-supply Chain, Retail Supply Chain, Supply Chain Procurement
Thursday, April 14th, 2011
Procurement and other supply chain professionals have developed and nurtured existing relationships within their incumbent suppliers for years and in some cases decades. Too often, this has led to incumbent suppliers becoming to comfortable. The feeling of entitlement begins to creep in and some suppliers feel as though their business will be renewed annually. Too often this is true.
This author has often said that the job of buyers, category managers, procurement executives and other supply chain knowledge workers is the most difficult job in all of retail and retail distribution. These professionals are literally swamped. Quality, safety, environmental issues coupled with the enormous amount of new product offerings is overwhelming. Just conducting the basic research required to identify potential new sources of supply, finding the correct contact information as well as determining if the company has the capability to meet your needs. All of this is before you even sample, price or test new offerings. No wonder it is so easy to just stay the current course. This however would be a mistake.
A general rule of thumb that this author has always ascribed to is if you are doing business with a current supplier for more than three years and are only negotiating with that supplier, your prices are probably too high. The question is how can you find out?
That is where e-procurement tools come in to play. I won’t advertise here, but if you were to Google e-procurement or reverse auctions etc. any number of companies will come up. Or if you were smart, you just click this link and have measurable savings in less than 30 days and often faster. Visit SafeSourcing.
We look forward to and appreciate your comments.
Posted in B2b Supply Chain, E-procurement, E-procurement Solutions, E-procurement Tools, E-supply Chain, Eprocurement Auction, Retail Supply Chain, Supply Chain Procurement
