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Archive for the ‘Retail Supply Chain’ Category

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The Geographical Significance of Vendor Selection

Monday, March 25th, 2013

Today’s post is by Mark Davis; Sr. Vice President and COO at SafeSourcing

Many National companies are faced with the dilemma of trying to control the sourcing of products and services across their company in a way that consolidates what they purchase and helps them control who they are working with.   Many times our customers will tell us that they are only interested in speaking with companies who can handle their entire company; only National providers will be considered.  The SafeSourcing recommendation frequently will be to expand that vision in order to create an opportunity for greater overall value, and possibly better savings.

Today we will be looking at the advantages of each of the three geographical levels that companies can employ when setting up their projects and why a good mix of all three can create greater opportunities for success for your company.

National suppliers – There are some obvious advantages for selecting National providers to be involved with sourcing projects.  As you grow they will have the infrastructure in place to support you and your business.  In many cases they have a support system and reporting system that can assist you with tracking what you are spending and where those products and services are being delivered to.  National suppliers have the size to be able to reduce the overall costs of the items you purchase but they also have the overhead and internal expenses that it takes to maintain a National company.   National companies tend to have larger market share and recognition so their aggressiveness in competing for your business may not always be in line with that of the regional and local suppliers who are looking for any way to get some of your business.

Regional suppliers – Regional suppliers tend to cover 20 to 40% of the country and focus on a specific area such as the Northeast, Southeast, West Coast, etc.  The advantages of the regional supplier are that they are large enough to be aggressive in price and to offer great value-add services but they are focused enough to know the area they are servicing.  Regional suppliers have typically mastered the logistics of their shipping lanes and many times know the culture and the people in the area better than a National supplier does.  While having multiple suppliers loses some of the advantages of having a National program, the services and prices may indicate a 2 or 3 supplier award makes the most sense for the company.

Local suppliers – Local suppliers who handle either a city or an entire state, are typically brought into a procurement event for one of two reasons.   They either are an incumbent of one the locations currently or they are being reviewed for a rural area that is not supported well by a national or regional supplier.  Local suppliers have the flexibility to be aggressive in pricing (especially for services) and they can usually support rural areas better than larger companies.  Having local companies involved gives incumbents a chance to fight for the business they have previously had and possibly win new business and it provides great options for locations that need special attention.   Local suppliers will also ensure that the regional and national suppliers are staying competitive in the service levels, terms and pricing they are offering you across the company.

The mix of suppliers you invite to your sourcing projects are every bit as important as the history and specifications you supply those suppliers and developing a strategy of the right mix will be important to how successful your projects end up.  While you may intend on finding one National provider, the value offered may demand you consider a 2-3 company award at the end and having options at the local level for special situations and emergencies is something every company should have a contingency plan for.

For more information about how we can assist you with developing these supplier selection strategies, 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

Posted in B2b Supply Chain, Retail Supply Chain

Suppliers, what makes you different?

Thursday, January 3rd, 2013

Today’s post is by Mark Davis; Sr. Vice President of Operations and CTO at SafeSourcing.

One of the biggest Supply Chain topics for 2013, as it is every year, is the concern over rising costs and shrinking profits, and unfortunately this is the stigma attached to many eProcurement tools and practices.  We tell our customers and the suppliers who participate in our events it is about more than just price; it is about the overall value that is presented.

Today we will be looking at ways that suppliers can distinguish themselves from their competition in areas other than price.

Labeling and Packaging – Labeling and packaging are one of the big expenses in For Resale items for many retailers especially when it comes to Private Label goods.  Suppliers who are willing to work with their customers to develop packaging that will streamline the receiving and sales process can gain a big advantage over their competitors in a way they can leverage to great value.

Training & Professional Services – One of the easiest ways for suppliers to begin to separate themselves from the pack is in the area of professional services and training.  For the supplier these services can generate a value to their customers that far exceeds the actual cost of the service itself.  In this case it is a win-win situation where the customer gets valuable services while the supplier gets an opportunity to continue to build on the face-to-face relationship in a useful manner.

Guaranteed Service Level Agreement (SLA) Metrics – The bottom line in any Supplier-Customer relationship is not just price or “bells and whistles” it is about how well the supplier delivered what they promised, how they dealt with situations when they didn’t deliver as promised and what they are willing to risk if they fail to achieve on the Service Level they promised.  Getting the best price means nothing if the product or service is of low quality or is late.  The best suppliers OVER service their customers and are willing to stake a portion of their cost on their ability to achieve that level of service every time.  These guarantees may not always translate to your bottom-line in a positive way, but not having them in place and receiving poor quality will definitely impact it in a negative way.

For assistance on helping you work with your suppliers on the extra value they can offer you, please contact a SafeSourcing Customer Service Representative.

We look forward to your comments.

 

Posted in B2b Supply Chain, E-supply Chain, Retail Supply Chain, Supply Chain Procurement

Happy Thanksgiving Weekend 2012 from SafeSourcing. Who were the Pilgrims?

Friday, November 23rd, 2012

According to the Mayflower Society, as history has evolved, any of the 102 Mayflower passengers who arrived in Plymouth on the Mayflower and survived the initial hardships is now considered a Pilgrim with no distinction being made on the basis of their original purposes for making the voyage.
The Mayflower Pilgrims and their fellow travelers were authors of the first true governing document created in a New World colony. The Mayflower Compact is considered to have set the stage for the Constitution of the United States.

These were the same pilgrims that were responsible for the holiday we celebrate today called Thanksgiving.

We wish you and yours a peaceful and happy extended holiday weekend.

Posted in E-supply Chain, Retail Supply Chain

Last year much of the back to school supply at our local stores ran out early!

Tuesday, July 24th, 2012

Retailers; are your school supplies up to date? Do you have appropriate stock?

A quick reverse auction that we call the ABC’s of school supplies can get you caught up quickly.

It seems like the summer has just begun, but buyers need to be thinking about back to school supplies. The actual supplies required differ from preschool to college aged students and teachers.

Unfortunately if you don’t have what the person (normally mom) shopping for all students is looking for; you may lose all of the affiliated sales and ultimately your customer.

How many times have shoppers come to your store looking for something simple and then leaving without buying anything? It probably happens more often than you think. On the other hand, if you have a well stocked department you might be surprised by the number of additional items customers buy when they find the primary item they were looking for.

Relative to school supplies, you should probably consider the following list of categories if you want to cover all of your consumers needs.
.
A. Academic Calendars & Planners
B. Arts & Crafts Materials
C. Accessories
D. Backpacks
E. Binders
F. Calculators
G. Chalk, Erasers & Cleaners
H. Computer Media
I. Crayons & Markers
J. Dies Punches & Accessories
K. Drafting Supplies
L. Educational Software
M. First Aid & Personal Care and Anti Bacterial Supplies
N. Glue, Tape & Self-Stick Notes
O. Index Cards,
P. Report Covers & Portfolios
Q. Locker Accessories
R. Maps & Globes
S. Paints
T. Paper & Notebooks
U. Pens, Pencils & Markers
V. Reference Books
W. Rulers &  Compasses 
X. Scissors
Y. Staplers
Z. Teaching Aids

Each of the above categories obviously has a number of products associated with it. At times any one of these products could support a reverse auction by itself based on the size of the retailer and the volume associated with the category

The SafeSourcing product specifications library already has specifications on each of these categories and they could all be run within a week. Contact a SafeSourcing customer services representative in order to find out more.

We look forward to and appreciate your comments.

Posted in Business Sourcing, Retail Supply Chain, Reverse Auction

Are you paying to much for your Retail E-Procurement solution?

Wednesday, July 18th, 2012

When you review using retail e-procurement tools you may not always get what you pay for. In fact you are probably paying way too much.

There are too many companies that have been at this for a long time whose pricing formula is way too high in the retail marketplace based on what they provide.

I was speaking to a large retailer recently that had an unlimited use tool in place behind their fire wall from a very large player in the e-procurement space. The recently converted to this companies cloud based SaaS offering without a significant reduction in cost. I asked what type of savings they have been able to achieve and how many additional associates they had assigned to write RFI’s and RFP’s as well as handle events, supplier communication, hosting support, training, report generation, specification building, data collection etc. The answer was a lot.

After we had discussed at least 20 different categories, it occurred to the both of us that the savings from our cloud based SaaS events were at least a third higher than the savings from the use of the unlimited tool in either configuration.  Even if you added in our fees, the savings were still substantially higher on event by event basis with SafeSourcing. There are a number of reasons for this. One is that to many times when retailers deploy a solution internally or as a SaaS offering they default back to their old way of doing business with a new tool once the solutions provider has left. Obviously staff additions have to be calculated into the ongoing cost. Supplier research is limited, the number of participants is fewer, training is inadequate and the result is lower savings and sometimes overall quality. Older companies also do things in old ways. There are proprietary cost frameworks to the SafeSourcing solution that will also drive higher savings. I won’t share that information here.

Another way that retailers over pay, is when an older company comes in and matches the lower cost of doing business with a newer and better provider in order to win the business. An example of this is the cost of IT infrastructure in an open source world. As such the model will not last because many of these older companies are not structured in such a way that will allow them to absorb these lower fees profitably over time. Over time your price will continue to rise. In fact next year, your price should go down if you are running the same event again. Hasn’t most of the work already been done in the past?

Some good questions to ask your prospective solutions provider would be the following.

1. How many events per month can one associate host?
2. What are you doing to automate your solution in order to take out cost?
3. Will we pay the same in year two as we paid in year one for identical events?
4. What percentage of your associates work virtual?
5. Is your cost higher because of your investment in office space?
6. Is your cost higher because of your headcount required to run events?
7. What are your average savings for events over $100K?
8. What are your average savings for events under $100K?
9. Can you even run events under $100K?

There are certainly more questions but you get the idea. Be careful out there. If you want the lowest cost and the best service in the industry give SafeSourcing a call.

We look forward to and appreciate your comments.

Posted in E-procurement, E-procurement Solutions, Procurement Outsourcing, Retail Supply Chain

Here’s a repost that still has some legs.

Friday, June 22nd, 2012

I choose to post simply because I can
My wife seems to think it’s because I’m a concerned and caring man.
So why or when to post, just what is my deal
It could simply be that I just had a bad meal
A meal from a food source that was not really safe
That sickened me some
And just could not be traced
It’s origin cloudy I really get ticked
That many more people could also become sick
So I post a few comments on product safety and more
In the hopes that they become part of the cure
Whether near shoring or off shoring and from local suppliers too
We offer opinions hoping they’ll be helpful to you
It’s time that our supply chain start to get the game right
And that will only happen if buyers make the process more tight
With adherence to certifications and timely inspections
That are clearly executed against consistent directions
While we’re at it, it’s important to do and say what we mean
And while we tighten up our processes
Let’s try to keep them focused on becoming more green
With a supply chain that’s safer
And greener to boot
Our new posts can discuss how to reinforce doing both, while still saving you some loot!

We look forward to and appreciate your comments. However, there is no need for them to be poetic in nature.

Posted in Green eProcurement Practices, Product Procurement, Retail Supply Chain, Sourcing Safe Foods, Sourcing Safe Products, Supply Chain Procurement

Here are some additional thoughts on managing overstock and other inventory leftovers

Monday, October 17th, 2011

Friday’s post discussed the use of forward auctions as a way to improve earnings and reduce shrink from overstock. Here are some thoughts as to other methods you might consider in addition to using forward auctions.

Last week, one of our customers mentioned that they were dealing with one of their vendors to purchase back some obsolete inventory.  This is just one of the methods some companies use to move old or excess items they have purchased and today’s blog will be taking a look at a few more.

Vendor Assisted – The example mentioned above is one method of dealing with excess inventory, and is one of the most important methods to consider when negotiating the purchase of new items.  Unfortunately, many companies miss this opportunity until it is too late.  Letting vendors you deal with know they may have an opportunity to buy back you excess inventory up front will many times get more aggressive pricing from them on the new items you are purchasing.

Third party buyback programs – If you are not able to negotiate a deal for your obsolete or discontinued items up front with the vendor, another approach is to contact third party companies who special in purchasing excess inventory at a reduced price and reselling it through their own channels.  Depending on the type of product you are looking to move there will always be companies who will specialize in handling it for you.

Donation Programs – Occasionally the sale of excess or obsolete will either not be possible or will not be not as valued as the tax write-off given when it is donated.  As in the cases above there are many companies who will coordinate the pickup and redistribution to charities that they work with; taking the entire burden of getting rid of the products off of your business and providing you with a tax incentive on top of it.

There are many ways to take care of your excess inventory and as is often the case, the earlier you plan the more options you will have in the directions you can take.  For assistance in finding ways to move your excess, discontinued or obsolete inventory, please contact a SafeSourcing Customer Service Representative.  

We look forward to your comments.

Posted in B2b Supply Chain, Retail Supply Chain, Sourcing Strategy, Strategic Sourcing

When does demand dictate it is time for a spot buy versus standard replenishment?

Tuesday, August 30th, 2011

Posted in Retail Supply Chain

What is “The International Green Construction Code”?

Tuesday, July 12th, 2011

Leadership in Energy and Environmental Design or LEED seems to get most of the press, and is a program of the U.S. Green Building Council or USGBC. However there are multiple ways to drive construction projects in a green direction.

In addition to LEED, in 2009, the International Code Council  or ICC launched the development of a new International Green Construction Code (IgCC) initiative, subtitled “Safe and Sustainable: By the Book,” committed to developing a model code focused on new and existing commercial buildings addressing green building design and performance.

In the future SafeSourcing will be vetting SafeSourceIt™ suppliers against both of these initiatives in order to provide the broadest support of Construction Company’s support of our customers CSR initiatives.

We look forward to and appreciate your comments.

Posted in B2b Supply Chain, E-supply Chain, Green eProcurement Practices, Retail Supply Chain, Supply Chain Procurement

Knowing Who Your Suppliers Are – Onsite Visits – Part I of II

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

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