Archive for the ‘Procurement Solutions’ Category
Monday, January 31st, 2011
It really is a curious question; pretty much along the same line as what is spend management. Well my answer might create more questions, but all of the following job areas within your company are probably involved or impacted by procurement or e-procurement?
1. Finance
2. Purchasing
3. Logistics
4. Manufacturing
5. Warehousing
6. Materials Management
7. Inventory Management
8. Supply Chain
9. Distribution
10. Transportation
There are certainly many more areas of a company that have procurement or e-procurement connections, but the above probably give you a pretty good idea of the breadth of involvement within any company. In fact, I can’t think of a job that is not impacted by procurement. Maybe I should just say we save every department in your company money every day.
We look forward to and appreciate your comments.
Posted in E-procurement, Procurement Company, Procurement Solutions, Product Procurement
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.
Posted in Business Sourcing, E-procurement Solutions, Global E-procurement, Procurement Company, Procurement Outsourcing, Procurement Purchasing, Procurement Solutions
Monday, September 20th, 2010
In Part I of this blog we posited that in order for a strategic plan to be successful there are certain elements organizations need to know. I’ll just list a few as an example.
1. Your own company.
2. Your Industry. Example: Retail.
3. Your vertical within your industry.
4. Your competition. Be careful.
5. Your category.
6. Your product.
So let’s assume that you have an e-procurement supplier that indicates they have great strategic sourcing tools that can evaluate your data and help you strategically build your sourcing plan which as a result would support your company strategic plan.
Let’s assume a tier two supermarket chain wanted to evaluate their total grocery category. Let’s just look at bottled water which is a sub category of the total grocery category. The first requirement is that they provide access to their sales and cost data. This may be easier said than done in the lower tier one and tier two markets. What is also required here is access to industry data. Data may indicate that their bottled water sales are 2.5% of their total grocery category, but what is the industry standard for this category? Are they already above the average? Has their category grown year over year? Have industry category sales? If they have access to both sets of data they have a start but who is their competition? Are they comparing themselves to other supermarkets and should they be? What about C-Stores, Drug-Stores, Liquor Stores and Mass Merchants that are close to their stores and get a share of category sales. Are they aware of these competitors category mix such as number of brands offered or private label offerings? All of this information is required for every category in the total grocery category. If they don’t conduct this analysis how would they begin to know what category to address first? The obvious choice is the category that is most out of norm with the industry average. But will sourcing that category have the best impact on the P&L and earnings.
Once this analysis has been completed, their e-procurement solutions provider should also have data that can guide them as to what month is the best month to source specific categories and what commodity markets are doing currently that may also have an impact on finished products.
After all of this is completed and categories are evaluated, ranked and prioritized they should then look for other elements that are incorporated in their company’s strategic plans such as CSR initiatives that support safety and the environment.
So, is strategic sourcing dead? This author does not believe so. However it is a process involving a lot of work, a lot of data, a lot of analysis and more than just tools in order to result in a strategic sourcing plan that can be implemented, scored and adjusted properly over time.
We look forward to and appreciate your comments.
Posted in Business Sourcing, E-procurement Solutions, Procurement Solutions, Sourcing Strategy, Strategic Sourcing
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
