Archive for the ‘Retail Supply Chain’ Category
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
Tuesday, August 30th, 2011
Posted in Retail Supply Chain
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
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
Thursday, April 14th, 2011
Procurement and other supply chain professionals have developed and nurtured existing relationships within their incumbent suppliers for years and in some cases decades. Too often, this has led to incumbent suppliers becoming to comfortable. The feeling of entitlement begins to creep in and some suppliers feel as though their business will be renewed annually. Too often this is true.
This author has often said that the job of buyers, category managers, procurement executives and other supply chain knowledge workers is the most difficult job in all of retail and retail distribution. These professionals are literally swamped. Quality, safety, environmental issues coupled with the enormous amount of new product offerings is overwhelming. Just conducting the basic research required to identify potential new sources of supply, finding the correct contact information as well as determining if the company has the capability to meet your needs. All of this is before you even sample, price or test new offerings. No wonder it is so easy to just stay the current course. This however would be a mistake.
A general rule of thumb that this author has always ascribed to is if you are doing business with a current supplier for more than three years and are only negotiating with that supplier, your prices are probably too high. The question is how can you find out?
That is where e-procurement tools come in to play. I won’t advertise here, but if you were to Google e-procurement or reverse auctions etc. any number of companies will come up. Or if you were smart, you just click this link and have measurable savings in less than 30 days and often faster. Visit SafeSourcing.
We look forward to and appreciate your comments.
Posted in B2b Supply Chain, E-procurement, E-procurement Solutions, E-procurement Tools, E-supply Chain, Eprocurement Auction, Retail Supply Chain, Supply Chain Procurement
Tuesday, April 5th, 2011
In December of 2010 the Federal Motor Carrier Safety Administration or FMSCA a part of the U.S. Department of Transportation proposed changes to the hours of service for Commercial Motor Vehicle Drivers (CMV) with comments due by March 4th of 2011.
These rules are an example of a good thing and potentially a bad thing for companies that ship or receive overland freight as part of their business. In general when drivers are required to work less hours, more drivers will be required to transport products and more trucks will be required to support the increased driver population. So, more jobs and increased sales of CMV’s; is probably good for the economy. The off side of this conversation is an increase in shipping costs in an industry that has seen prices climb steadily over the last few years that result in reducing their customer’s profit margins.
All companies will need to keep abreast of these potential rule changes, because this author is sure that these expenses were not planned for in anyone’s budgets.
We look forward to and appreciate your comments.
Posted in Business Sourcing, Retail Supply Chain, Supply Chain Procurement
Monday, March 28th, 2011
In a recent retail headline, Safeway, a California-based grocer with over 1,700 stores, announced their plan to have a channel of fresh and frozen seafood product that is sustainable and traceable, or in a process to reach that goal, by 2015.
It begs the question, “What are your vendors doing to better the planet in a way that goes beyond the products they deliver? Are their values and Mission Statements mirroring what your business believes?”
In Safeway’s case, they had a strong company belief in sourcing product that came from sources that can maintain or increase production in the future without negatively affecting the environment with which it is coming from. They also had a strong desire to be able to trace that product back to its source for safety reasons. These values led them to select a partner who is helping them assure all of the companies they do business with also have these values and practice them in their business.
They are one of the first retailers to make a commitment of this magnitude with more expected to follow.
In order to ensure this same type of synergy between your company its sources, you should ask yourself:
• How much do I know about the core values of the companies I do business with?
• Do my vendors know anything about my company’s core values or Mission statement?
• Are my suppliers doing everything they can to provide safe and green products?
• Are there other suppliers I could be using that are making strides in this area that mirror the things my company wants to do?
• Are my RFI/RFP processes collecting this kind of information from the vendors?
To help you with answers to these questions or to provide you with a deeper pool of environmentally responsible companies with which to work with, please contact a SafeSourcing customer service representative today.
We look forward to and appreciate your comments.
Posted in Green eProcurement Practices, Retail Supply Chain, Sourcing Strategy, Strategic Sourcing
Thursday, March 3rd, 2011
A lot of distributors have told this author that reverse auctions don’t apply to them because they use the cost plus model and as such they just add their price or profit margin on top of the contract price with their source to drive their distributed price.
The fallacy in this thinking is that it may make buyers and category managers lazy in their approach to driving margin within the categories that they manage. This results in a higher price to the retailers they distribute to and ultimately to the consumer or their customers customer. A worst case scenario is that the consumer stops shopping at their customer’s store which reduces overall volume and further increases prices by not meeting volume incentives. It’s a slipper slope.
Off course this argument is relatively easy to overcome when we get around to discussing capital goods and expense related products and services area. These areas have an impact on the distributor’s net profit. And I’m sure that many of you will agree that just because one says they are a cost plus provider does not necessarily mean it’s true in the most pure sense of the definition.
Check back tomorrow and we’ll review what the real definition of cost plus is in part II.
We look forward to and appreciate your comments.
Posted in B2b Supply Chain, Retail Supply Chain, Reverse Auction, Sourcing Strategy
Tuesday, March 1st, 2011
Collaborative purchasing and co-op enterprises are concepts that are not new to the business world.
For decades manufacturers, retailers and consumers have organized associations that allow their members to take advantage of lower pricing than they could normally get on their own due to the increase in the overall purchase amounts made by the collective group.
While this is a great advantage for smaller businesses and retailers, many companies think this is the only way to take advantage of this type of spend.
Many businesses think that the amount of inventory they want to purchase is just too small to think about purchasing like this and so they wait for a period of time until they think they can justify the amount, all the while losing out on money they could have saved on the product they are currently purchasing.
Luckily for these companies, neither of these situations has to be true for them. We are conducting regularly scheduled collaborative events, weekly, and are just waiting for these companies to join. As with any collaborative spend, the more participants involved the better the savings will be and the bigger the opportunity for the suppliers involved.
We are routinely saving customers 10-20% on spends they had previously thought were too small for any type of reverse auction due to the fact we were able to include them in one of these collaborative events.
Call a SafeSourcing Customer Service representative today to see if any of your upcoming spends have associated collaborative events scheduled for the month of March.
We look forward to and appreciate your comments.
Posted in Business Sourcing, E-procurement, Procurement Auctioning, Retail Supply Chain
Wednesday, February 16th, 2011
As oil heads north of $100 per barrel again, the resulting higher fuel costs will again force global trade to focus on such as USA, Mexico and Canada versus the Asia Pacific region which is more than 7500 miles away.
Hopefully we learned our lesson less than three years ago? If so, we should all be aware of suppliers that will not require us to buy goods from so far away that transportation and logistics costs will kill our P&L.
Let’s remember that the North American Free Trade Agreement or NAFTA allows us to not just near shore many of our purchases but to localize them. This reduces transportation expenses. North America is made up of the United States, Canada and Mexico. Although NAFTA is primarily focused on agricultural products traded between North American Country’s it also represents one of one of the most successful trade agreements in history and has contributed significantly to increases in agricultural trade and investment between the United States, Canada and Mexico. There are plenty of opportunities in the regional low cost manufacturing bases could have a related regional impact on keeping costs lower on many types of retail products.
Finding tools that can aide our search in finding new sources of supply is imperative as demand rises and causes strain on commodities. Are you aware that a tool like this already exists which can provide data at a glance on 928 general merchandise suppliers located in Mexico, 1,585 Grocery Suppliers located in Canada, and 1,940 Pharmaceutical suppliers located in the United States. If not, please visit the SafeSourceIt Query Tool to learn more. Your P&L will thank you and so will your customers when you don’t raise their prices.
We look forward to and appreciate your comments.
Posted in B2b Supply Chain, E-supply Chain, Retail Supply Chain, Supply Chain Procurement
