Archive for the ‘Global E-procurement’ Category

A simple supplier scoring system may provide key performance indicators for the future.

Monday, August 7th, 2017

 

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

Having a large international supplier database to drive sustainable results in e-procurement events such as ant e-RFX function is critical to that events success. Maybe even more critical is making sure that the suppliers once selected for participation in an event are of the highest quality, professional, responsive and have your best interests at heart. There are several areas in the early strategy stages of a  an e-RFX process which if properly monitored can be leading key performance indicators as to future performance. These KPI’s are; the initial supplier response and supplier training schedule adherence. If suppliers are not interested enough during these early stages, this may be an indicator of future performance in other more critical areas such as on time delivery, back order management, documentation and audit compliance.

A reasonable process for measuring these KPI’s would be to measure the number of days between the project start date or initial supplier contact and the event start date, where the supplier has been sent an invitation but has not responded either positively, negatively or given a reason  for their response. Maintaining an active status of response dates could be scored based on the number of days it takes invited suppliers to respond. The longer it takes a invitee to respond the lower KPI score that supplier would receive.  Another possible KPI measurement or filter once the invitation has been accepted would be the number of days between the date accepted and the event start date, where the supplier has accepted an invitation but has not completed their automated training.

These are not intended to be punitive measures. In most cases suppliers will perform beyond your expectations. Sustainability and quality require measurements regardless of how simple.

If you’d like to learn more about The SafeSourceIt™ Supplier Database, please contact a SafeSourcing customer services account manager.

We appreciate and look forward to your comments.

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Enterprise Software RFPs

Friday, August 4th, 2017

 

Todays post is from Ron Southard, CEO at SafeSourcing

We’ve discussed the differences between the RFPs, RFIs, RFQs, and Surveys many time and also touched on why they were different as well as when you would use one.  What we said then was that you typically want to run one of these events when you have an idea about the basic functionality of a product you need but are not sure who can provide it and what else it is they can bring that you didn’t think of.

In many cases, the road to procuring enterprise software will require one of these tools due, in part, to the fact that software can change so quickly, but also because typical decision factors like price play a much smaller role to the features and functionality of the software.

In preparing to make a major software purchase a Request for Information or Proposal can be a great first step.  Here are some things to keep in mind about the solution and the company when preparing for one.

Flexibility – One of the keys in the process of evaluating software solutions and the companies that create them is to gather information about the flexibility of the product.  A focus on how configurable the system is and how well a solution can be fitted with your company’s needs and appearance is an important part to building a good software RFP/RFI.

Reputation – A company’s reputation for delivery used to go a long way in the business world but in the wake of a tougher economy price has begun to gain ground.  In the arena of software, it is still one of the most important factors to evaluate when selecting a software partner.  Building a relationship with companies known for under promising and over delivering on a consistent and referenceable level can be a huge factor in protecting a million dollar investment.

Pricing model – The key here is not in the actual price but how the company prices that is important.  Your company’s needs will dictate the pricing model that benefits your company whether for the enterprise; per seat or per user.  How a software provider prices and what they charge you for are HUGE factors in determining if they are suited for you and your company. The more information you can gather at the RFP/RFI stage as possible is very important.

Support – There is no more important product to verify good support on than software.  As upgrades occur, employees get promoted or leave the company, new employees need training, or issues arise, the level of support a company will commit to is critical to the confidence you can place in them.  On top of this, the more mission critical the functionality the software is to support is for your company, the more important the level of support becomes.  Any software RFP/RFI you create should have a detailed section to determine what level of support you can expect from each vendor.

For more information on SafeSourcing and how we can provide RFIs/RFPs that help you focus on these important factors, please contact a SafeSourcing Customer Service Representative.

We look forward to your comments.

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Here is some Lasik for retail e-procurement professionals in order to create better focus.

Monday, July 17th, 2017

 

Here’s and old post that continues to have merit with a link to another resource from FitSmallBusiness.com

Very often this author gets the question as to where to start in the e-procurement process. Too often I read that one needs to do a detailed discovery. The question is of what and how to get to the right place the quickest. So here is some Lasik for you that will help you see a little more clearly.

Using another idiom, and with renewed focus we hope to make it possible to see the forest for the trees by not focusing on excessive detail that is not needed yet.

There are four areas where you should begin your search for an e-procurement starting point and they are pretty simple.

1. Gross Sales
2. Cost of Goods Sold
3. Gross Margin
4. EBITDA.

This is really to say that if you take a look at your top line or Gross Sales and your bottom line or EBITDA and they are out of whack relative to your plan or industry averages you need to look at the above the gross margin line or Cost of Goods Sold or below the gross margin line which is expense related items for as an e-procurement focal point..

As such a couple of terms whose definitions you should be aware of are as follows.

According to two separate sources, Wikipedia and FitSmallBusiness.com  Cost of Goods Sold or COGS is a financial accounting  term which includes the direct costs attributable to the production or procurement of the goods sold by a company. This amount  can include the materials cost used in creating the goods along with the direct labor costs used to produce the m. It excludes indirect expenses such as distribution costs and sales force costs. COGS appear on the income statement and can be deducted from revenue to calculate a company’s gross margin.

Earnings Before Interest, Taxes, Depreciation and Amortization or EBITDA which is an approximate measure of a company’s operating cash flow based on data from the company’s income statement. EBITDA is calculated by looking at earnings before the deduction of interest expenses, taxes, depreciation, and amortization.

Based on the above a lot is determined by who built you annual plan and how realistic it was to begin with.

Tomorrow we will review what underperforming these measure means and how it should point you in the direction as to where to begin your e-procurement focus.

We look forward to and appreciate you comments.

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HAPPY NEW YEAR 2017 from Safesourcing; Your GLOBAL SOURCING PARTNER!

Sunday, January 1st, 2017

picture of world

If you’d like to learn more about alternative sources of supply around the world or locally, contact a SafeSourcing customer services account manager to learn more about SafeSourceIt™ our 427,000 global supplier database and let us translate it into increased profits for you.

We look forward to and appreciate your comments.

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What is an RFI, RFP, or RFQ Part I of VI?

Friday, May 13th, 2016

 

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

The world of procurement is continually changing, and this includes the world of e-procurement when it comes to the requirement for information, a proposal, or a quote.  In this series of blogs I hope to simplify for you readers the differences between the three requests, what your expectations are when receiving the requests back, and how to make a sound business decision with what has been presented back to you.

According to businessdictionary.com a request for quote (RFI) is a request made typically during the project planning phase where a buyer cannot clearly identify product requirements, specifications, and purchase options. RFIs clearly indicate that award of a contract will not automatically follow.

An example for a use of a RFI: You now are the proud owner of a used warehouse that you want to turn into a distribution center. It has some racking but you need more racking.  However, you have no idea what the best layout will be needed, what types of rack you need, how much materials are needed, or how long it will take to install the racking. The existing racking looks in ok shape but you don’t know if it is safe, placed appropriately, outdated, or even needed. You will need to rely on experts to give you this information.  The best practice is to get at minimum 2, but recommended to get 3 to 6, requests for information from racking manufactures, distributor, and/or installers.

You may ask, why so many?  In an area where you have no knowledge, knowledge is power. How will you know between 2 suppliers that one will not overbid the materials and under bid the labor, but the other supplier will underbid the materials and overbid the labor? How do you know that the materials are the same? Does the weight vary? Did they include the weight?  It is very hard to make a sound business decision based on these two requests for information. Having a pool of bids can help you see if there are major differences between them all. Having an average will direct you to what you really need.

The application of an RFI can be used on new goods for use, re-sale, packaging design, any and all services, software, hardware, equipment of any kind, actually it is limitless as to what you can utilize a RFI for in business.

Follow me onto the next blog where I  endeavor to explain  a request for proposal (RFP) and how you can tie a RFI and an RFP into one collective project.

SafeSourcing can help you with your needs in creating, running, and reporting on an RFI for any item, project, or industry need. We can do this all electronically in your set timeline, and report it back to you in an easy and understandable package where you will be able to see the apples-to-apples comparison.

For more information as to 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.

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Cotton and the Commodity Market: How to Deal with Market Volatility

Wednesday, July 15th, 2015

 

Todays post is a timely repost from our SafeSourcing archive.

Variable costs can reap havoc on any company budget, they are more difficult to forecast and prepare for than fixed costs.  Throw in large increases followed by unexpected decreases in any given year, and forecasting becomes almost impossible.  As commodity prices continue to fill the market with extreme volatility—cotton being the current culprit—manufacturers, suppliers and procurement professionals are struggling to remain competitive.

Is there any relief in sight for the drastic shifts in commodity prices?  Cotton, after having a record high price early in the year, now is experiencing a strong drop in price, nearly a fifty percent decrease from the spring.  After already imposing a price increase, manufacturers and suppliers are faced with decisions on how to most effectively reflect the price shifts—again.

How can you protect yourself from the risk in the commodity market?  Planning is a crucial step.  With the uncertainty in not only the commodity market, but the financial market as well, the best defense is to develop a strategic plan for potential macroeconomic risks that could affect your company.

Possessing a detailed forecast of the global economy in any given time horizon will not only keep you relevant, it will allow you to have steps in place to overcome any potential unforeseen events.  Along with a strategic plan, implementing escalator and de-escalator language into contracts for those products most affected by commodity risk will ensure that you are more protected from drastic market shifts.  Unexplained market volatility and unforeseen events have the potential to seriously damage and sometimes destroy a company; take the steps today to implement a strategic plan to shield your company from market uncertainty.

For more information on SafeSourcing and how we can assist with this process, please contact a SafeSourcing Customer Services Project Manager for more information.

We look forward to and appreciate your comments.

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If you are not sourcing your services with eProcurement tools you are missing the boat!

Monday, February 16th, 2015

 

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

Professional services represent one of the fastest growing procurement areas for thousands of companies. The reason for this growth includes reductions in staff, efficiencies through outsourcing non-core competencies such as IT, and cost reductions for service on demand versus full time internal resources.

SafeSourcing has completed hundreds of professional services sourcing events resulting in the following overall statistics:

Number of Service Providers Invited:  5 to 9
Average Suppliers Participating:  6
Project Timeframe:  < 30 Days
Average Savings:  24%

Here is a list of 25 of the more popular services sourced using our eprocurement tools!

1. Employee Automobile Reimbursement Plan
2. Accounts Payable Recovery
3. Event Planning Services by Location
4. Armored Cars Services
5. Audio Conferencing
6. B2B Payment Solutions
7. Background Screening Services
8. Customer Satisfaction Program Provider
9. Customer Satisfaction Program Provider
10. Customer Statement
11. Disaster Response (Emergency Cleanup)
12. Event Services
13. Facilities Asset Management
14. Temp Labor
15. Jet Charters
16. Legal Services
17. Managed Print Services
18. Payroll Services
19. Recycling
20.Waste Management Services
21.Lawn Care Services
22.Snow Removal Services
23.Environmental Services
24.Construction Services (General Contractor)
25.Logistics

If you’d like to learn more about how to reduce your current costs for services or get a savings estimate on a specific services category, please reach out to a SafeSourcing Customer Services Associate.

We look forward to and appreciate your comments.

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UNSPSC? HUH?

Friday, July 13th, 2012

Here’s another procurement related acronym. This one defines the role of classification of products for tracking in an ecommerce environment.

According to Wikipedia UNSPSC is the acronym for the United Nations Standard Products and Services Code, it is a coding system used to classify both products and services for use in the eCommerce. The UNSPSC was jointly developed by the United Nations Development Programme (UNDP) and Dun & Bradstreet Corporation in 1998 and is currently managed by GS1 US, which is responsible for overseeing code change requests, revising the codes and issuing regularly scheduled updates to the code, as well as managing special projects and initiatives.

UNSPSC was created so that companies would be able to track their purchasing patterns more effectively to ensure compliance with their contracts and also make it easier to conduct high quality catalog research. To that end UNSPC is divided into four areas which are segments, families, classes and commodities and business functions.

Other product classifications that buyers may be more familiar with are DUNS (data universal numbering system), NAICS (North American Industry Classification System) and SIC (Standard Industrial Classification).

By the way, I have never asked a single supplier whether or not the understood or used this code. Have you?

We look forward to and appreciate your comments.

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NAFTA still a challenge at Seventeen and a half?

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.

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So you want to source from foreign countries?

Thursday, March 24th, 2011

The idea is that you hope this will allow you to compete with larger companies that have been sourcing lower cost products from these regions for years. So how can you catch up in a much shorter period of time?

If you’re dead set on moving forward and adding this strategy to your tool kit, the first and maybe most important step is to make sure you are working with a quality e-procurement solutions provider that should already have relationships in place with agents, 3PL’s and other companies that can manage much of this process for you and at a fraction of the cost of doing it yourself.

The National Customs Brokers and Forwarders Association of America www.ncbfaa.org can put you in touch with customs brokers and freight forwarders who can help you import your goods. Many of them offer informational websites that contain what is required in order to find the right customs broker or freight forwarder for your shipments. Your e-procurement solutions provider can also help you manage this process with third party logistics providers or 3PL’s in areas like ocean bound freight and national and local delivery and distribution that you may not have any experience in.

Companies can also visit the following website www.aapa-ports.org  (American Association of Port Authorities) for assistance with the technical aspects of the logistics industry including directories of custom brokers and freight forwarders.

This process is fraught with risk, but for growing companies that plan properly and use the right resources, there is profit to be made.

We appreciate and look forward to your comments.

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