Archive for the ‘Retail Supply Chain’ Category
Thursday, October 21st, 2010
Comparative advantage is a theory that advances that in a free marketplace, each entity or country such as the EU or NAFTA or trading countries will ultimately specialize in activities where it has comparative advantage. Examples of such might be technology, natural resources, local workers skill sets, agricultural advantages, transportation benefits etc.
Sometimes countries create trade agreements that eliminate the comparative advantage they each may have in favor of benefits that both or multiple countries derive from the agreement where one may have an advantage over the other that creates an imbalance in trade. As an example in the NAFTA agreement, Mexico may have a lower cost labor pool than the United States but the United States may have a transportation advantage that could leverage that low cost of labor. These agreements are called Free Trade Agreements in which both parties agree to lift most or all tariffs, quotas, special fees and taxes, and other barriers to trade between the entities to their mutual benefit.
We look forward to and appreciate your comments.
Posted in B2b Supply Chain, Global E-procurement, Retail Supply Chain, Supply Chain Procurement
Friday, October 8th, 2010
Based on the above, this area of your business also requires careful planning and a very clean specification so that your transportaion mode does not end up looking like this image.
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Posted in Retail Supply Chain
Wednesday, October 6th, 2010
I was reading today’s edition of USA TODAY and read the front page article titled Along Highways, signs of serial killings by Blake Morrison. The data was shocking to someone that travels a lot and also has family members that do so to make their living. Over the road travel is how most of our goods are shipped and is also a necessary part of how most suppliers representatives travel to call on our retailers and our retailers work with their stores.
As such I am posting tips by AAA titled Avoid being a victim.
AAA offers these tips for motorists concerned about their safety at rest areas and truck stops:
• Avoid being the only person at a rest area.
• Park in well-lit spaces near the facilities.
• If you see someone suspicious, wait until the person has left or drive to another location.
• Keep your keys in your hands as you walk to your car. That way, you can quickly enter and lock your car.
• If you’re approached by someone seeking help or information while you’re in your car, keep the doors locked and crack your window to talk with them. Offer to call help for them, but do not get out of your car.
• If someone confronts or grabs you, react loudly and fight back. Make a scene.
Be SAFE out there.
We look forward to and appreciate your comments.
Posted in B2b Supply Chain, Retail Supply Chain
Tuesday, September 28th, 2010
Finding new sources of supply has always been an issue. It may even be more important if your current suppliers can not provide what you need because they were forced to down size during recent economic woes.
This author has posted on numerous occasions relative to the importance of a robust retail supply chain and how retail companies might manage their relationships with current and new sources of supply. A significant part of the process is to have alternative sources of supply that you can rely upon. During last years H1N1 flu outbreak, The SafeSourceIt™ supplier database was able to provide multiple sources of surgical mask suppliers to a customer that had not been able to find them elsewhere for resale in their stores. Although this particular issue was caused by panic buying, it is still a supply and demand problem. The question this begs is are your suppliers capable of supplying your needs as demand increases? Did they reduce staff during the downturn? Have they been able to ramp up since then? Have their suppliers? The message here is, don’t wait until a time of panic or increased prosperity to work and plan for spikes in the supply chain that may cause your customers pain.
The SafeSourceIt™ Retail Supplier Database contains over 380,000 vetted global suppliers that are certified in over 25 different areas.
We look forward to and appreciate your comments
Posted in B2b Supply Chain, E-supply Chain, Retail Supply Chain, Sourcing Strategy, Strategic Sourcing, Supply Chain Procurement
Tuesday, September 21st, 2010
Having a large international supplier database to drive sustainable results in e-procurement events such as ant e-RFX funtion 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.
We appreciate and look forward to your comments.
Posted in Business Sourcing, E-supply Chain, Global E-procurement, Retail Supply Chain, Scorecards, Supply Chain Procurement
Thursday, September 16th, 2010
Being comfortable is great. Sometimes however being to comfortable can also create complacency. We all know we have coworkers that come to work everyday and do what only what they perceive their job to be. Nothing extra is ever done, and few ideas come from these folks that are just comfortable with what they are doing and how they are doing it. They do a good job at it, but that’s it.
Let’s apply this type of complacency to knowledge workers in the supply chain. If we are being honest with ourselves; we see this situation all the time.
A buyer you know has a list of products or a category manager has a category that they are responsible for. There are only so many hours in the day and they have a job to do in order to get product to a distribution center, warehouse, store or some other location on time. They have done business with the same suppliers for a number of years. In fact the person in the job before them did business with these same suppliers and the person before that. So its easy to not rock the boat. It takes to much time to look for new sources of supply and after all one can only manage so many relationships anyway. Finally the buyer is comfortable with product quality and pricing has not gone up to much over time.
With the help of your e-procurement solution provider, this situation is easily rectified, but you need to be open to change. This is normally led from the top of the organization. The following is a partial list of what you can do to eliminate complacency and support the fact that you knowledge workers don’t have a lot of free time.
1. Provide your e-procurement company with a list of your suppliers by category.
2. Provide your e-procurement provider with a complete list of products carried by each supplier.
3. As your e-procurement provider to produce a list of new sources of supply located within a fifty mile radius of each distribution center or warehouse
4. Ask your e-procurement provider to provide data on each supplier’s including incumbent’s safety certifications such as GFSI and ISO.
5. Ask your e-procurement provider to provide supplier background information such as years in business and user references.
6. Select categories or products to source from your incumbents catalog and cross reference with new suppliers offerings.
The additional steps to this process can be provided by SafeSourcing as a part of our best practices deliverables which are included in our event pricing. The SafeSourceIt™ Supplier database includes over 360,000 global sources of supply that can be sorted by a variety of filters such as country, county, postal code or mileage from a particular location, plus many more.
We look forward to and appreciate your comments
Posted in B2b Supply Chain, Business Sourcing, E-supply Chain, Retail Supply Chain
Wednesday, September 15th, 2010
So what the heck is collaboration and what are collaborative partners or networks relative to the supply chain. One thing is for sure, these terms roll of everyone’s tongue like we all know what we are talking about. So this author took a look at Wikipedia hoping to gain some insight and clarity.
According to Wikipedia, Collaboration is a recursive process where two or more people or organizations work together toward an intersection of common goals, and
An aggregate is a collection of items that are gathered together to form a total quantity.
Since collaboration only means different groups or organizations working together towards the same goal, that term can apply to just about any business function. However when we combine it with the word aggregate to form the collective e- procurement term Collaborative Aggregation which was coined by this author in 2006; we arrive at something potentially meaningful.
Collective buying organizations and sometimes share groups often combine purchasing volumes of like products to drive better discounts. Large companies often aggregate their purchases among departments and are more often today doing the same thing across different operating group’s or companies within a larger organizations to drive economy of scale in purchasing.
The unfortunate truth is that not much out of the box thinking is going on in this process. We are so involved in the process that we can not see the forest for the trees.
As an example let’s take a look at a small regional supermarket chain. Today they buy their products mostly from regional or national wholesalers who are able to aggregate the volumes of many small to medium size companies in order to earn enough discounts to pass on reasonable pricing to this retailer that is slightly better than the small chain might earn on their own. The wholesaler also reserves a little for themselves in order to support their business. These products are normally for resale products. In the not for resale area or supplies, the regional retailer usually does business with local suppliers for a variety of supplies that can include everything from cleaning fluids to paper bags. The supplier normally does good job of managing these products against a number different cost structures to maintain a customer margin that is good for them. As an example if the price of oil is up and the resin market high, the supplier might be making less on plastic products such as plastic shopping bags, soup containers, trash can liners etc. The supplier may however also carry paper products and other supplies that can be mixed together to drive a total customer margin that is acceptable for their model. Retailers can do the same thing. Here’s a partial list of how collaborative aggregation can work.
1. Take a good look at the total list of supplies offered from your primary supplier.
2. Compare that to what you are buying from them.
3. Ask your e-procurement provider for a list of suppliers within a 50 mile radius that can provide the same products or some of the same products.
4. Look at local businesses within a five mile radius of your area that are not in your industry but buy some of the same products such as trash can liners, cleaning fluids, paper products etc.
5. Call them and explain how collaborating might save you all money.
6. Ask for the name of their supplier as they might be different from yours.
7. Determine a test group of products to request bids on.
8. Develop a standard specification.
9. Develop standard terms and conditions.
10. Bundle all products into one group.
SafeSourcing has a best practices program for this type of collaborative aggregation that is included in our event fees. For a complete list or more information please contact us at www.safesourcing.com.
We appreciate and look forward to your comments
Posted in B2b Supply Chain, Product Procurement, Retail Supply Chain
Friday, September 3rd, 2010
We’ve all known for a while that our seat partners look over our shoulders to see who we are and what we do. I told him I was reading an Aberdeen business brief and who and what they do. I went on to explain that our company was focused on e-procurement tools for the retailers. He introduced him self as a private business owner with his two brothers and that he had experience biding in reverse auctions with Ariba and Free Markets.
We discussed SafeSourcing’s offerings and ultimately came around to what made e-procurement events successful for his company in the past as a prospective supplier and what would encourage them to participate again even if they did not happen to be awarded the business in a particular event. His take was that this was initially an educational process for their company and ultimately would become a way to do old things in a new way. He also suggested the following
1. Openly communicate with prospective suppliers
2. Make sure they understand everything and comfortable
3. Make sure they have no open questions.
With that as an understanding I offer the following list of sample questions one might consider when inviting a supplier as a new participant.
1. Does the supplier understand that there is no cost to them to participate?
2. Do they understand they will be trained at know charge?
3. Do they understand event timing and requirements?
4. Does the supplier understand the terms being used and how they apply to an e-procurement event such as? In fact, do they understand what a reverse or forward auction is?
a. Reserve Price
b. Proxy Volumes
c. Low Quote
d. Proxy quote
e. Funds
f. Terms
g. Notes
h. Extensions
i. Matching quotes
j. Event rules
k. Product specifications
l. Samples
m. Award of business
At the heart of it, it comes down to something we all know but don’t always practice and as such negatively impacts the sustainability of processes that just make good sense. And that is that the supplier is your customer too and the customer comes first and should be treated the way you would like to be treated.
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, Retail Supply Chain, Reverse Auction Procurement, Strategic Sourcing
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
Tuesday, July 13th, 2010
There was a point in time that sourcing products from China insured a low cost for your product. Then the price of oil went through the roof and melting down containers returned more than trying ship product in them. Even with oil down somewhat from that time, costs are increasing in China as plant safety and quality and worker safety and quality improves. However, there are still probably bargains to be had, but caution should be your guiding word.
A great example of this is a recent find by Chinese officials of tons of milk products tainted with Melamine. If this sounds familiar, it should. This was an issue in 2008 on which this author posted. The scandal actually killed 6 babies and made hundreds of thousands sick at the time. China actually executed two individuals for producing or selling toxic milk. So here we are in 2010 and the problem has still not been totally corrected and we are talking about products that are only sold in China. It would seem that a country would be more concerned about the quality and safety of products made by the Chinese for the Chinese consumer.
As such, companies need to complete the due diligence necessary to insure that the products you are planning to source include detailed raw materials descriptions, formulas and certifications that are mandated globally to insure product quality, safety and environmental impact standards.
Ask your solutions provider what their vetting procedures are for including suppliers in their database?
We look forward to and appreciate your comments.
Posted in B2b Supply Chain, E-supply Chain, Global E-procurement, Retail Supply Chain, Sourcing Safe Foods, Sourcing Safe Products, Supply Chain Procurement
