Archive for the ‘Retail Supply Chain’ Category

A simple supplier scoring system may provide key performance indicators for the future.

Thursday, July 15th, 2021

 

Todays post is by Ron Southard, CEO at SafeSourcing Inc.

Having a large international supplier database to drive sustainable results in e-procurement events such as ant e-RFX function is critical to that events success. Maybe even more critical is making sure that the suppliers once selected for participation in an event are of the highest quality, professional, responsive and have your best interests at heart. There are several areas in the early strategy stages of a  an e-RFX process which if properly monitored can be leading key performance indicators as to future performance. These KPI’s are; the initial supplier response and supplier training schedule adherence. If suppliers are not interested enough during these early stages, this may be an indicator of future performance in other more critical areas such as on time delivery, back order management, documentation and audit compliance.

A reasonable process for measuring these KPI’s would be to measure the number of days between the project start date or initial supplier contact and the event start date, where the supplier has been sent an invitation but has not responded either positively, negatively or given a reason  for their response. Maintaining an active status of response dates could be scored based on the number of days it takes invited suppliers to respond. The longer it takes a invitee to respond the lower KPI score that supplier would receive.  Another possible KPI measurement or filter once the invitation has been accepted would be the number of days between the date accepted and the event start date, where the supplier has accepted an invitation but has not completed their automated training.

These are not intended to be punitive measures. In most cases suppliers will perform beyond your expectations. Sustainability and quality require measurements regardless of how simple.

If you’d like to learn more about The SafeSourceIt™ Supplier Database, please contact a SafeSourcing customer services account manager.

We appreciate and look forward to your comments.

What is a chaebol?

Thursday, May 27th, 2021

 

Today’s post is our archives at SafeSourcing.

Chaebols are large, family owned South Korean business conglomerates, such as Samsung, Hyundai and LG. The word chaebol translates to “business family” or “monopoly” in Korean. Chaebols are multinational corporations, typically owning numerous international enterprises. Chaebol are owned and controlled by a family dynasty, generally that of the group’s patriarch.

Despite their economic dominance in South Korea and the belief that monopoly structures restrict smaller companies that compete against them, public opinion of chaebols in South Korea is generally supportive. Largely the public views the chaebols as the primary vehicle taking South Korea out of financial crisis.

Let SafeSourcing better manage your sourcing projects. We enjoy bringing this blog to you every week and hope you find value in it. For more information on how we can help you with your procurement needs or on our “Risk Free” trial program, 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.

The Geographical Significance of Vendor Selection

Tuesday, May 4th, 2021

 

Today’s post is the SafeSourcing  BLOG Archives.

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

What is a Third Party Logistics Provider or 3PL and how do retailers use them?

Tuesday, April 13th, 2021

 

If you are having difficulty with your current distribution model, compress your spend using eProcurement tools and then source a reputable 3PL.

According to Wikipedia a third-party logistics provider (abbreviated 3PL) is a firm that provides outsourced or “third party” logistics services to companies for part, or sometimes all of their supply chain management functions. Third party logistics providers typically specialize in integrated operation, warehousing and transportation services that can be scaled and customized to customer’s needs based on market conditions and the demands and delivery service requirements for their products and materials.

As such, there are a number of types of 3PL’s within retail that may in fact service a single retailer as well as smaller buying groups of small retailers. All might fall under this umbrella including wholesalers such as SUPERVALU, collective buyers such as TOPCO or even a retailer collaborative that may in fact just coordinate aggregated purchases and in fact pick other 3PL’s to provide warehousing, picking and packing and distribution. Each of these providers may in fact provide some or all of the same services. The later or collaborative of multiple retailers might even be looked at as a non asset based 3PL.

In all categories of third party logistics providers however it is still the end user or retailer regardless of size that determines what products they buy and accept delivery of in their stores. As such, it should be no more difficult for smaller retailers to run e-negotiation events? There will need to be discussions as to costs that are purely associated with the warehousing, slotting, picking and distribution of products by a 3PL once an e-negotiation event has been planned, but these items should be easy to break out for bid or add to the final pricing prior to award of business as a flat fee. This is a practice that all 3PL’s should be familiar with already. Retailers should anticipate that their existing 3PL depending on services offered would rather not have you conduct these types of events as it negatively impacts their volumes with manufacturers and other providers and as such their company’s margins.

Understanding your options and the flexibility that 3PL’s can provide may actually make it easier for all retailers to use e-negotiation tools to impact their bottom line.

We look forward to and appreciate your comments.

Why should retailers be concerned with evergreen contracts?

Friday, April 2nd, 2021

 

Todays post is a rework by Ron Southard, CEO at SafeSourcing Inc.

This author has been asked on numerous occasions why I am so concerned with evergreen contracts. First, let’s discuss what an evergreen contract is. A simple definition is that it is a contract or an agreement between two parties (you and your supplier) that is automatically renewed or rolled over after each completion period which is typically a year, until canceled by the either party.

This does not sound so bad at first glance, particularly if the current terms of the contract such as price, performance, quality, service or service level are all being met and are to your advantage when they automatically renew. However this is not normally the case, particularly with contracts that are driven by commodity markets such as oil, chemicals, resins, pulp, steel and many others. In addition you can bet if the advantage is in your favor in the initial contract that your current supplier will notify you in writing within the specified period which is usually 60 days that they are going to let the contract expire or want to renegotiate.

In large parts of the retail trade, there are very few sophisticated contract management solutions deployed, the cost to the industry annually runs in the billions of dollars. This is because the original contract normally has language that includes price increases above the current contract when it auto renews and the auto renewal is normally for a year if the supplier is not notified in writing prior to the anniversary date. Once renewed you are stuck. This happens because most buyers or executives think they will remember in time to notify your supplier when in fact this almost never is the case. As most retail companies have thousands of contracts in the place the amount of data requiring review is unmanageable.

The worst case I ever reviewed was a contract written nine years earlier that had renewed every year. The customer was actually paying the uplifted prices and substantially more than a much smaller company was paying for the same type of service at significantly lower volumes. This did not even include newer technology benefits.

Contract management solutions that offer alert subsystems based on contracts Meta data are the best solution to this problem and typically provide near immediate ROI based solely on the cost avoidance associated with evergreen contracts.

SafeSourcing offers an easy to use solution called SafeContract™ to help our customers with this problem. Ask your solution provider how they can help you. Or contact SafeSourcing.

 

Happy Thanksgiving Weekend 2020 from SafeSourcing. Who were the Pilgrims?

Thursday, November 26th, 2020

 

Todays post is by Ronald D. Southard, CEO at SafeSourcing Inc.

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.

Collaborative Buyer Organizations, Share Groups and Consortiums are evolving in order to compete with mega retailers.

Wednesday, October 28th, 2020

 

Todays post is from Ron Southard, CEO at SafeSourcing Inc.

These business structures have been around for a long time. Many have evolved to use cutting edge e-negotiation and eProcurement tools. Their retailer members are also benefiting from their use of these tools in order to reduce their net landed costs in many different ways.

These types of organization can go by many different names such as wholesaler, collective buyer, consortium, cooperative, share groups and more. They all have one thing in common. They consolidate purchasing volumes for a wide array of groups that may have very similar business structures, but for the savvy consortium can also be wildly different.

In the retail vertical, companies may actually belong to several different buying groups because their primary group does not offer expertise in a certain area.

Consortiums are also evolving and beginning to focus mixed markets where it makes sense. In general consortiums tend to be vertically focused such as a drug industry consortium with the members generally representing the drug industry only. However some consortiums are beginning to market them selves outside of their vertical to retailers or other companies who want to take advantage of learned expertise that the consortium possesses in the categories that are common across more than their own vertical and offer increased volumes. An example might be drug stores sourcing very similar products that health care organizations like hospitals source. Although this may seem like a stretch fro most, it is now very common within retail for non vertical specific players to work together.

Today’s advanced e-negotiation or e-procurement tools make it much easier to accomplish collective buying and aggregating outside of a consortiums initial area of expertise. Large and small retailers alike now have the capability of viewing a much broader universe of suppliers and other companies while also coordinating and participating in collaborative events from hundreds if not thousands of miles away. Suppliers now have an opportunity to earn business they could never compete for in the past.

Retailers should ask their collective buyers how they plan to make the use of these types of tools and what they have to offer in terms of introductions to other companies for increased volume.

If you’d like to learn more about our risk free trial or how SafeSourcing may be of service to you, please contact a SafeSourcing Customer Services Representative.

During a Pandemic like COVID-19, Is there benefit to a large retail supplier database?

Tuesday, August 4th, 2020

 

Todays simple post is from Ron Southard, CEO at SafeSourcing Inc

Maybe you’re looking for KN95 face masks, gloves or other medical safety equipment. Do you know all of the off shore suppliers and how to contact them? We do!

Maybe your current supplier can’t handle your volume any more because of the Pandemic! Where do you look.

Once you are armed with a robust Global Supplier Database such as  SafeSourcing’s  SafeSourceIt™ Global Supplier Database  and it’s easy to use query tool.

If you need assistance, just contact us at 1-888-261-9070 or  marketing@safesourcing.com.

We’re here to help!

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

Thursday, April 2nd, 2020

 

Todays post is from our SafeSourcing Archives

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.

If you are interested in locating potential new sources of supply, please contact SafeSourcing.  The SafeSourceIt™ Supplier Database contains 457,000 globally.

We look forward to and appreciate your comments.

What’s the genesis of your supplier database and how was it built?

Tuesday, March 24th, 2020

 

Todays post is from Ronald D. Southard, CEO at SafeSourcing Inc.

All databases have their start as an information gathering exercise that ultimately is enhanced by those characteristics the owner or developer determines to be useful to the community of interest the database is to be offered to. The information then becomes part of a data model where information sets can be accessed or searched based on a variety of queries or questions. Most developers follow a process called Universal Description, Discovery, and Integration or UDDI  as this process.

Universal Description, Discovery and Integration or (UDDI) is a standard established for building online databases of companies and the goods and services they provide, similar to Yellow Pages for the Internet. UDDI is intended to help businesses locate suppliers and products. Sourcing companies supplier databases go well beyond this definition.

Data models can be extremely complex and that is where they become more than a simple on line yellow pages. In fact high quality supplier databases should be able to provide much of the data you might find in the opening pages of a detailed RFI. A simple query like show me all companies within a 500 mile radius of your home office zip code that provide a set of products that meet the following safety certifications.  A next step might be summarizing all company information for these companies by a list of attributes such as company description, sale, years in business, officers etc.

How easy would that make your life?

If you’d like to find more qualified and vetted suppliers to support your sourcing efforts of any product or service, please contact a SafeSourcing Customer Services Account Manager

We look forward to and appreciate your comments.