Archive for the ‘Procurement Solutions’ Category
Thursday, September 2nd, 2010
I was reading a blog post from the Doctor over at Sourcing Innovation today titled “A Hitchhiker’s Guide to e-Procurement: Terminology” and I thought it was great as well as very timely.
Ultimately it is up to practitioners and solution providers of these tools to educate their customers as to what the proper terms are for the tools they are using. As an example E-RFI, E-RFP, E-RFQ. I have numbers of customers that have used other solution providers and not only are the definitions different by customer; they are actually different within a specific company. In some cases everything is referred to as a reverse auction and in other situations the companies have made up their own name for the service or tool.
This author uses Wikipedia and Wictionary quite often as a source and in this case, they have a very good definition that covers most of the terminology in the entire e-procurement space as well as related B2B and B2C internet based or private network based functions. As your company moves in the direction of a computerized supply chain management solution for your company understanding what you are asking for and what you are using will make both your job and that of your solution provider easier.
We look forward to and appreciate your comments.
Posted in B2b Reverse Auction, B2b Supply Chain, E-procurement, E-procurement Solutions, E-procurement Tools, E-supply Chain, Eprocurement Auction, Online Procurement, Online Reverse Auction, Procurement Auctioning, Procurement Outsourcing, Procurement Purchasing, Procurement Solutions, Procurement Tool, Product Procurement, Reverse Auction, Reverse Auction Procurement, Supply Chain Procurement
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.
Posted in Global E-procurement, Green eProcurement Practices, Procurement Solutions, Sourcing Strategy, Supply Chain Procurement
Thursday, August 19th, 2010
Quite honestly this is a fairly complex question so the answer is not simple. To begin with let’s take a look at just what a market (retail) exchange is.
One of the earliest exchanges in the retail space was called the Retail Exchange which was sponsored by some very large retailers and is still available today from a company that bought the system from its retailer sponsors. As simply as possible, a Market (Retail) Exchange is a business to business or B2B E-commerce platform that allows Suppliers, Resellers, and their customers or buyers to offer, purchase and manage their goods and services in a simple and effective way. Typically an organization must be a member of the exchange in order to participate. Once a member the organization can then conduct business with other organizations by establishing on line connections with each other. Typically exchanges are a shared hosting environment and in some cases for very large companies dedicated server implementations. In recent years exchanges have migrated to SaaS or software as a service models in order to address wider markets.
The success of an exchange is based on the number of suppliers or resellers that belong to it and their willingness to participate with a retailer for their business. The activity is more of hands off approach once your offer is posted that can include punch outs to a supplier’s website and catalog services for sourcing of products.
From my perspective I like the personal touch of the historical RFX process in the form of a SaaS full service offering that actively engages new sources of supply and sells them on wanting your business. There is a much smaller investment from both a financial and resource perspective. If you want to learn more about the RFX process please visit SafeSourcing Blog archive or the SafeSourcing Wiki.
We look forward to and appreciate your comments.
Posted in B2b Reverse Auction, B2b Supply Chain, E-procurement Solutions, Online Procurement, Procurement Outsourcing, Procurement Solutions, Retail Supply Chain
Thursday, July 22nd, 2010
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).
We look forward to and appreciate your comments.
Posted in Procurement Solutions
Tuesday, July 20th, 2010
Every one of the companies listed below use e-procurement tools to lower their cost of goods and services. They probably don’t even need to based solely on their sales volumes, but the do anyway and as a result get even better pricing.
1. Wal-Mart
2. Kroger
3. Target
4. Walgreen
5. Home Depot
6. Costco
7. CVS
8. Lowe’s
9. Sears
10. Best Buy
The reality is that you can’t compete with them on price alone. What you can do is improve your own margins and earnings so that you can stay in business and focus on what you do well. The ten retailers listed above cover every type of format and every type of product offered in retail from fashion to fuel.
So what can you do? First, try conducting a spend analysis of your detailed profit and loss statement and compare it to the industry leaders and other retailers in your market area. Look for anomalies where you may in fact have an advantage based on product mix and then try to figure out how to exploit it. Second, use e-procurement tools for existing and new products and services sourcing. Third, use contract management software to make sure that the savings you generate make it to your P&L.
Ask your e-procurement solutions provider how they can help. If you don’t get a good answers call SafeSourcing at 1-866-623-9006 or visit our website www.safesourcing.com and click on Contact Us.
We look forward to and appreciate your comments.
Posted in E-procurement, E-procurement Solutions, E-procurement Tools, Procurement Outsourcing, Procurement Solutions, Supply Chain Procurement
Tuesday, June 22nd, 2010
A great place to start is an organization called the The Construction Safety Council which was founded in 1989. Ask you conduction partners if they are a member.
The CSC is a non-for-profit organization dedicated to the advancement of safety and health interests in the field of construction throughout the world. It was chartered by a board of directors composed mostly of large construction company owners and operators whose vision and leadership made the organization possible. Since its humble beginnings in 1989, the organization has quickly grown to become a world class professional construction consortium with associations that span the globe. With an emphasis on quality and customer service, all of the construction safety and health resources and loss reduction tools developed by the Construction Safety Council have been designed to maximize positive impact on your safety program.
The SafeSourceIt™ Global Supplier Database has hundreds of construction companies that are held accountable to these types of standards. Are you asking all the right questions or is your solution provider?
We look forward to and appreciate your comments
Posted in Business Sourcing, Procurement Solutions, Retail Supply Chain, Sourcing Safe Products, Sourcing Strategy
Wednesday, June 16th, 2010
What troubles this author most about this is that the industries included in the Aberdeen Group study such as education, manufacturing, energy, utilities, financial services and others are all using these tools to trim their costs and improve earnings. Retail has had at best terrible earnings numbers historically with the supermarket industry averaging net earnings of below one percent (1%).
I was just talking with our CFO today about the impact of these tools. I used a very realistic example of a $2B supermarket company with one percent net earnings of $20M. I can see the board now. If the same retailer were to source as little as $10M of their budgeted spend and reduced costs by just 20% or $2M, net earnings would improve in the budgeted year by 10%. If you are a CFO and can’t get excited about that, I’m not sure what would excite you.
This is not just rhetoric. We have customers with savings that are almost double that with a huge resulting impact on earnings. I know that there are a lot of bloggers and others out there that doubt the impact of e-procurement tools or think that reverse auctions as an example have run their course. Quite frankly that thinking is misguided because in the retail industry the large majority of companies have never used these tools and have been doing business with many of the same suppliers for more than two years. These are both indicators of the fact that you are overpaying for products and services.
You can be comfortable and be busy or you can grab the bull by the horns and improve costs, earnings, stock price and even the bonuses of your management team.
We look forward to and appreciate your comments.
Posted in Business Sourcing, E-procurement Tools, Eprocurement Auction, Online Reverse Auction, Procurement Solutions, Procurement Tool, Reverse Auction Procurement, Strategic Sourcing
Wednesday, June 2nd, 2010
A Forward Auction is part of most e-negotiation tool belts. Probably the most well known type of forward auctions are those run by eBay. These tools are often overlooked as a way for companies to sell items that represent overstock, out of cycle, buffer stock, new old stock and other types of inventory that has been paid for and not sold through.
Placing these items for sale on your e-procurement provider’s website so that buyers from a variety of formats such as dollar stores, liquidation companies and other overstock resellers can bid for the items can positively impact shrink.
The simple philosophy here is that getting something for inventory that has already been paid for is better than getting nothing. The biggest dilemma to this solution is that most retailers do not know what is in the back rooms of their stores or how long it has been there.
An issue the above can create is the misinterpretation that shrinkage caused by employee theft, error or other mistakes is actually higher than it is.
There are any numbers of sources that report on annual retail shrinkage numbers. It is safe to say that average shrink numbers across the retail industry has hovered around 3% for years, although you will find significantly higher numbers by specific retail industry vertical.
The fact is that for a one billion dollar supermarket company, this represents $30,000,000.00 annually. With net earnings in this vertical averaging 1%, a reduction in shrink of 33% can improve earnings by as much as 100%.
A quick hit to these numbers can be accomplished by a forward auction. What do you have to lose? Better yet, what do you have to gain?
We look forward to and appreciate your comments.
Posted in Business Sourcing, E-procurement, E-procurement Solutions, E-procurement Tools, Eprocurement Auction, Online Procurement, Procurement Auctioning, Procurement Outsourcing, Procurement Purchasing, Procurement Solutions, Procurement Tool
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
Posted in E-procurement, E-procurement Solutions, E-procurement Tools, E-supply Chain, Global E-procurement, Procurement Solutions, Procurement Tool, Sourcing Strategy, Strategic Sourcing, Supply Chain 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.
Posted in E-procurement, E-procurement Solutions, E-procurement Tools, Eprocurement Auction, Global E-procurement, Green eProcurement Practices, Online Procurement, Procurement Auctioning, Procurement Company, Procurement Outsourcing, Procurement Purchasing, Procurement Solutions, Procurement Tool, Product Procurement, Reverse Auction Procurement, Supply Chain Procurement
