Archive for the ‘Global E-procurement’ Category

In other words is just more trade liberalization.

Friday, October 22nd, 2010

The agreements are really just a form of trade liberalization which is how these geographies or countries collaborate to the remove government incentives and restrictions from trade between themselves and other nations or groups of nations. Trade liberalization has always been open to much political debate because of its impact on local economies where jobs or lack of them impact the daily lives of its people.

A subject we are all familiar with that is a good example is that of jobs going overseas from the United States particularly in the area of manufacturing. That subject could be an entire book relative to the impact of World War II on creating breeding beds for new economies based on new technologies that ultimately caused our own manufacturing decline and the need for tariffs in the first place.

This all sounds like a self fulfilling prophecy, but I digress.

We look forward to and appreciate your comments.

Is comparative advantage important to your procurement practices?

Thursday, October 21st, 2010

Comparative advantage is a theory that advances that in a free marketplace, each entity or country such as the EU or NAFTA or trading countries will ultimately specialize in activities where it has comparative advantage. Examples of such might be technology, natural resources,?? local workers skill sets, agricultural advantages, transportation benefits etc.

Sometimes countries create trade agreements that eliminate the comparative advantage they each may have in favor of benefits that both or multiple countries derive from the agreement where one may have an advantage over the other that creates an imbalance in trade. As an example in the NAFTA agreement, Mexico may have a lower cost labor pool than the United States but the United States may have a transportation advantage that could leverage that low cost of labor. These agreements are called Free Trade Agreements in which both parties agree to lift most or all tariffs, quotas, special fees and taxes, and other barriers to trade between the entities to their mutual benefit.

We look forward to and appreciate your comments.

Where does the retail spend data you need for procurement reside?

Wednesday, October 20th, 2010

The problem today is that there is so much retail?data available that?buyers and category managers?could easily suffer business paralysis by data analysis.

Below is just a partial list of systems and places where data resides that is meaningful if not critical to sourcing professionals. Most of you can probably add to this list pretty easily. The unfortunate issue that confronts? retail procurement professionals daily is that most of this data is not integrated in any way and even at very large companies,? to much critical data is sitting on local employee desktops or even worse in their heads. And that is not what we mean by a neural network.

1.?ERP systems
2.?Enterprise Data Warehouse systems
3.?Replenishment systems
4.?Financial reporting systems
5.?Demand Planning systems
6.?Purchase Order management systems
7.?Distribution and Logistics systems
8.?Merchandise management systems
9.?Retail Planning systems
10.?Local employee desktops
11.?Contract management systems

Number two from above the enterprise data warehouse is probably the most logical place to bring all of these data sources or elements together within one logical data model that drives the master data source integrated with a s business reporting and? busyness intelligence front end. Small companies may never make it to this level, but if they can find a business partner that offers these solutions in a SaaS format it will be much better than the current; Hey? Joe, how many of these did we order last year?

We look forward to and appreciate your comments.

Sustainability needs to be a primary focus of all retail procurement leaders.

Wednesday, September 1st, 2010

A recent survey by UN Global Compact and? Accenture releases findings of largest CEO research study on corporate sustainability. According to this survey Chief Executives believe overwhelmingly that Sustainability has become critical to their success, and could be fully embedded into core business within ten years.

According to the survey CEO?s also believe that companies will need to meet the conditions listed below.

1.?Shaping consumer tastes in order to build a stronger market for sustainable products.
2.?Training management, employees and the next generation of leaders to deal with sustainability issues.
3.?Communicating with investors to create a better understanding of the impact of sustainability.
4.?Measuring performance on sustainability ? and explaining the value of business in society.
5.?Working with governments to shape clearer regulation and create a level playing field.

As a procurement leader what can you do in order to be prepared for those questions that may be coming to your desk tomorrow?

1.?Stay educated by seeking sources that offer readily available and fresh content on procurement related sustainability developments.
2.?Make sure that your procurement solution providers are also focused on sustainability.
3.?Ask your procurement solution providers what their environmental support plans are and how to include them in your procurement business plan.
4.?Ask your procurement solution providers what their product safety plans are and how to include them n your procurement business plan.
5.?Ask your procurement solution providers what training programs they can offer to your company in order to educate your associates.

We look forward to and appreciate your comments.

We still need to question CHINA.

Tuesday, July 13th, 2010

There was a point in time that sourcing products from China insured a low cost for your product. Then the price of oil went through the roof and melting down containers returned more than trying ship product in them. Even with oil down somewhat from that time, costs are increasing in China as plant safety and quality and worker safety and quality improves. However, there are still probably bargains to be had, but caution should be your guiding word.

A great example of this is a recent find by Chinese officials of tons of milk products tainted with Melamine. If this sounds familiar, it should. This was an issue in 2008 on which this author posted. The scandal actually killed 6 babies and made hundreds of thousands sick at the time. China actually executed two individuals for producing or selling toxic milk. So here we are in 2010 and the problem has still not been totally corrected and we are talking about products that are only sold in China. It would seem that a country would be more concerned about the quality and safety of products made by the Chinese for the Chinese consumer.

As such, companies need to complete the due diligence necessary to insure that the products you are planning to source include detailed raw materials descriptions, formulas and certifications that are mandated globally to insure product quality, safety and environmental impact standards.

Ask your solutions provider what their vetting procedures are for including suppliers in their database?

We look forward to and appreciate your comments.

What is retail e-procurement?

Thursday, June 24th, 2010

In many cases the question might be better phrased as to; what is procurement?

It’s amazing as to the number of companies both large and small that have no internal procurement organization. It is even more amazing how small the groups when companies do have them. In either case due to a of lack of resources, disconnect from information resources, lack of authority and little collaboration an energy sucking power struggle exists that limits the effectiveness of the entire procure to pay process.

I like to think of this process as the procurement lifecycle. In general the lifecycle follows a pretty typical buying pattern, each step of which has its own set of difficulties. The first step which when generalized could be called information gathering. Inforamtion gathering can include collecting and producing product specifications as well as research and locating suppliers that can meet those speciations. While the last item in the list called renewal can include the entire order and fulfillment process as well as contract compliance.

The procurement lifecycle pretty closely follows this process

1. Information gathering
2. Supplier contact
3. Background review
4. Negotiation:
5. Fulfillment
6. Consumption, maintenance, and disposal
7. Renewal

If we cycle back to our original question of what is e-procurement? The answer is pretty simple, it is the electronic or internet based version of the same process much of which has its own unique terminology.

We look forward to and appreciate your comments

Retailers do you have a sustainable e-negotiation program?

Tuesday, June 1st, 2010

If you have a limited source of new suppliers, including new vendors every time you run a new e-negotiation event will be incredibly difficult. Resultantly your process by default ends up as just a new way to continue to award business to the same suppliers over and over again. This process may yield some productivity increases initially, but over time meaningful price compression will be difficult if not impossible.

Solution providers suggest that somewhere between six and ten suppliers are required to drive optimum e-negotiation results, these data suggest that attaining sustainable results from the e-negotiation process has a direct correlation to the number of new suppliers available and willing to compete for your business.

By example let?s suppose you can only find six suppliers to invite to an e-negotiation event. Your customer services team using their best sales skills can probably convince most if not all of these suppliers to participate. This may be fine the first time around. Although this author believes there are better sustainability strategy even given this scenario.

Suppliers that finished first or second or incumbents that were displaced may agree to participate again in the future, but with a smaller number of suppliers and no new sources it will make the rerun of this auction less successful.

Lacking a robust source of new suppliers, and in the above case we only had a total of six available how can companies create a sustainable process.

The lack of a robust global supplier database limits future price compression at a minimum. It may also have a negative impact on quality, process and service. Particularly if history suggests a minimum of six to ten suppliers in order to drive optimum results…

Make sure to ask your e-negotiation solutions provider how many suppliers they have in their supplier database and if you can have regular access, it will determine your future success.

We appreciate and look forward to your comments

This is Part III of an III part post series titled “Technology Drives E.Procurement Acceptance” focuses on Reasons to Use E-Procurement.

Monday, May 24th, 2010

 Part III Reasons to Use E-Procurement

Sometimes an explanation can be lost in translation so we have developed the following 20 reasons why utilizing the technology-based e-procurement process can provide significant benefits to you and your company. These are certainly not all of the benefits that can be derived from the use of the e-procurement process, but it is a good starting point.

While this list is not ranked in order of importance, many might argue that not much is more important than the #1 item which is improved earnings.

• Improve net earnings
• Enhance safety
• Reinforce corporate social responsibility
• Find new sources of supply
• Streamline the procurement process
• Elevate supplier accountability to meet your standards
• Improve quality
• Reduce costs in a volatile market
• Ensure a competitive environment
• Buy at market pricing
• Maintain a reliable history for comparison
• Educate suppliers as to how you wish to procure products
• Eliminates questions through effective supplier training
• Maintain consistent product specifications
• Improve negotiation
• Improve carbon footprint
• Simplify your “award of business” process
• Free up time for other tasks
• Process works for all product categories
• Provide a detailed audit trail

E-procurement offers many benefits for a broad range of companies in a variety of industries, assuming that the process selected is a high quality system with an extensive supplier database. We must also assume that the e-procurement process is implemented properly with the purchasing company and that the experienced e-procurement system provider works in concert with the buyer in order to realize optimal cost savings.

Numerous technology advancements have streamlined the e-procurement process and made it more user-friendly and less expensive. A company today can expect to reap significant benefits from e-procurement, including: saving money on purchases, reducing the time involved in the purchasing process, tracking current and archival activities and results, eliminating waste and improving the overall efficiency of the supply chain.

 Take advantage of the technology advancements and don’t overlook the benefits of implementing an e-procurement process to strengthen your company’s bottom line.

To download copies of this entire article please use the following link.

We look forward to and appreciate your comments.

This is Part III of an III part post series titled ?Technology Drives E.Procurement Acceptance? focuses on Reasons to Use E-Procurement.

Monday, May 24th, 2010

?Part III Reasons to Use E-Procurement

Sometimes an explanation can be lost in translation so we have developed the following 20 reasons why utilizing the technology-based e-procurement process can provide significant benefits to you and your company. These are certainly not all of the benefits that can be derived from the use of the e-procurement process, but it is a good starting point.

While this list is not ranked in order of importance, many might argue that not much is more important than the #1 item which is improved earnings.

? Improve net earnings
? Enhance safety
? Reinforce corporate social responsibility
? Find new sources of supply
? Streamline the procurement process
? Elevate supplier accountability to meet your standards
? Improve quality
? Reduce costs in a volatile market
? Ensure a competitive environment
? Buy at market pricing
? Maintain a reliable history for comparison
? Educate suppliers as to how you wish to procure products
? Eliminates questions through effective supplier training
? Maintain consistent product specifications
? Improve negotiation
? Improve carbon footprint
? Simplify your ?award of business? process
? Free up time for other tasks
? Process works for all product categories
? Provide a detailed audit trail

E-procurement offers many benefits for a broad range of companies in a variety of industries, assuming that the process selected is a high quality system with an extensive supplier database. We must also assume that the e-procurement process is implemented properly with the purchasing company and that the experienced e-procurement system provider works in concert with the buyer in order to realize optimal cost savings.

Numerous technology advancements have streamlined the e-procurement process and made it more user-friendly and less expensive. A company today can expect to reap significant benefits from e-procurement, including: saving money on purchases, reducing the time involved in the purchasing process, tracking current and archival activities and results, eliminating waste and improving the overall efficiency of the supply chain.

?Take advantage of the technology advancements and don?t overlook the benefits of implementing an e-procurement process to strengthen your company?s bottom line.

To download copies of this entire article please use the following link.

We look forward to and appreciate your comments.

This is Part II of an III part post series titled “Technology Drives E.Procurement Acceptance” focuses on Getting Started!

Friday, May 21st, 2010

Getting Started

First and foremost in getting the e-procurement process right is to select a solution provider or partner that knows what they are doing and is willing to work closely with you during the early part of the process. The e-procurement plan for each company will be somewhat different in order to meet the specific needs of the company. There is however a general order to things that will provide the best opportunity for success.

To realize the most benefit from your e-procurement process, you will need to:
• Develop your strategy
• Complete a detailed discovery
• Learn to understand how to set up your procurement events, even if handled by your provider.
• Use a provider with a high quality process and an extensive database for sourcing suppliers
• Clearly communicate how events will be run or executed to all involved parties • Review the process for sustainability and adjust as necessary
 
As mentioned earlier, it is incumbent upon your e-procurement solutions provider to be able to assist you in completing these tasks in a reasonable period of time. You should be checking the background of the team and the leadership that will be assisting you to ensure their understanding of your industry such as operations, technology, procurement, warehouse management, logistics, transportation, loss prevention, store management and other functional areas of your business that will be sourcing products and services. It is all about detail because knowledgeable attention to detail will improve quality, reduce costs and ensure the success of your company’s new e-procurement process.

Please join us for part III of this post series on Monday titled Reasons to Use E-Procurement.

To download the entire article please use the following  link.

We look forward to and appreciate your comments.