Archive for the ‘Reverse Auction Procurement’ Category
Thursday, August 5th, 2010
Just because you need to buy a product or service does not mean that you will receive the optimal price for that product. For certain products there are better times to run e-procurement events and if you miss that opportunity by even a couple of weeks the lost savings could be astronomical.
Some consumers give this considerable thought when they buy products like cars, computers, televisions, furniture and even certain food products. Retail buyers should be doing the same. If you are the poultry buyer planning for Thanksgiving, you do not want to be buying your frozen turkeys in July and quite frankly if you buy them in March you are probably going to miss out on some savings. The same could be said for just about any type of fresh produce. You can certainly get everything in today’s world at any time of year, but there are better times to do it than others.
A couple of tangential examples that require careful thought would be landscaping services and snow removal services for store parking lots and distribution centers. The services for the most part may be provided by the same suppliers. The optimal time to source landscaping may be the month of March while the optimal time for sourcing snow removal services may be September. These months also mark the beginning and end of the respective service seasons for each service. Even though you may get the service from the same provider, keeping the services separate leaves the leverage with the retailer when you source the other service for the upcoming season. This is also the time when the suppliers are looking for business that will sustain them through the upcoming season as another winds down.
Make sure you ask your e-procurement solutions provider to assist you with the apropriate timing to source your goods and services.
We look forward to and appreciate your comments.
Posted in E-procurement, E-procurement Solutions, E-procurement Tools, Online Reverse Auction, Procurement Auctioning, Reverse Auction, Reverse Auction Procurement
Friday, July 30th, 2010
A reserve is also sometimes called the desired price, or a “qualification price”. Careful thought is required on the part of the retailer in determining their reserve price. Quite often retailers just rely on their existing or current price from their last contract. If careful thought is not given, this may in fact create an unreasonable expectation that results in less participation from prospective suppliers, particularly if the market has changed dramatically in an upward direction since the last award of business. You have to be very careful that once a reserve is met that suppliers will stop bidding because you have already indicated your desire price point.
In a reserve revere auction if the bidding does not reach the “reserve price”, the buyer is not obligated to award the business based on the results of the reverse auction. This can also add risk to the participation level of suppliers. However once the reserve price is met, the buyer is obligated to award the business to a participating supplier or group suppliers based on previously published auction rules. Most reverse auctions today include terms and conditions that protect the retailer from awarding the business whether the reserve is met or not. This author would caution that if you are just trying to collect prices to analyze market conditions, tell the suppliers up front. If you set a reserve plan to award the business.
Additional pricing considerations can be given to adding other price points or qualifiers in a reserve price reverse auction such as entering a market price. In the case of fuel, this may be from a price index such as OPIS, Platt or Gulf Coast. This information can be visible or blind to the supplier, but let’s the retailer compare a suppliers mark up strategies. This also offers a nice opportunity to calculate cost avoidance during an up market.
We don’t see reserve auctions to often anymore, but understanding the different types of formats and tools available to you and assessing them in your event setup for their potential impact can add to the quality of the data collected and the event itself.
We look forward to and appreciate your comments
Posted in B2b Reverse Auction, Online Reverse Auction, Procurement Auctioning, Reverse Auction, Reverse Auction Procurement
Friday, July 16th, 2010
A small retailer said to me last week that he did a form of reverse auction on his own. I asked how he accomplished this. The answer did not shock me, but I did chuckle a little. I’m glad he was a friend because he asked why I was smiling. The answer was that he sent out an email to three suppliers that he knew and asked for a price on a specific product. He told them in the email to make sure their price was there best offer and then called each once received and pressured them down with the threat of the other offers. We won’t get into the number of calls he had to make, the time it took to create the specification, the number of emails sent back and forth or lack of knowledge as to any new or additional sources of supply. We also won’t discuss the underlying psychology of a reverse auction and the tools that encourage quality bidding. The basic premise was solid and helped to reinforce why an automated system would out perform his results every time as well as provide a detailed audit trail.
At least in the example above, my friend was trying in his mind. What continues to concern this author is that many retail companies from lower tier I companies through all of tier II companies are not using any type of e-negotiation solution. Most of these solutions are relatively low cost hosted or SaaS oriented tools and available to them covering the entire P2P (procure to pay) process. In addition many of them belong to wholesalers that may use these tools themselves but don’t pass on all of the benefits to their customer.
I will continue to focus on this issue in the hope that if one company reads, watches, prints and uses any of this information and then executes because of it any or all of the following benefits may befall them.
1. Profits can and should improve
2. Quality can and should improve
3. Product Safety can and should improve
4. Environmental impact can and should improve
5. Prices can be compressed
6. New sources of supply can be found
7. Risk can be mitigated
8. Evergreening of contracts can be held in check
9. Existing jobs can be protected
10. New jobs can be created.
If these were the only reasons to try and get out the message as to the stunning effect that today’s e-procurement tools can have on an organization it would be enough. But we all know there are many more good reasons beyond the ten listed above.
We look forward to and appreciate your comments.
Posted in E-procurement, E-procurement Solutions, E-procurement Tools, Reverse Auction, Reverse Auction Procurement
Monday, June 21st, 2010
SafeSourcing has averaged over 30% savings for the entire time we have been in business across hundreds of millions in spend volume. This includes single event spends as small as $20K and as large event spends as large as hundreds of millions. You can rest assured that you can source all products and services with SafeSourcing regardless of how small or how large.
We believe there are very important reasons for these results. A few are as follows.
1. Our Event Template Library.
2. The SafeSourceIt™ Supplier Database with over 380,000 sources of supply.
3. Our customer services to assist buyers in building quality specifications quickly.
4. Event setup strategies that drive the best results.
5. Time to event.
6. Percentage of new suppliers per event.
So, here is the offer. Source any product or category regardless of the size of the spend and if you don’t save at least 15% THE EVENT IS FREE. Experience the difference for yourself in retail e-procurement leadership.
We look forward to and appreciate your comments
Posted in B2b Reverse Auction, Eprocurement Auction, Online Procurement, Online Reverse Auction, Procurement Company, Reverse Auction, Reverse Auction Procurement
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
Monday, May 24th, 2010
Part III Reasons to Use E-Procurement
Sometimes an explanation can be lost in translation so we have developed the following 20 reasons why utilizing the technology-based e-procurement process can provide significant benefits to you and your company. These are certainly not all of the benefits that can be derived from the use of the e-procurement process, but it is a good starting point.
While this list is not ranked in order of importance, many might argue that not much is more important than the #1 item which is improved earnings.
• Improve net earnings
• Enhance safety
• Reinforce corporate social responsibility
• Find new sources of supply
• Streamline the procurement process
• Elevate supplier accountability to meet your standards
• Improve quality
• Reduce costs in a volatile market
• Ensure a competitive environment
• Buy at market pricing
• Maintain a reliable history for comparison
• Educate suppliers as to how you wish to procure products
• Eliminates questions through effective supplier training
• Maintain consistent product specifications
• Improve negotiation
• Improve carbon footprint
• Simplify your “award of business” process
• Free up time for other tasks
• Process works for all product categories
• Provide a detailed audit trail
E-procurement offers many benefits for a broad range of companies in a variety of industries, assuming that the process selected is a high quality system with an extensive supplier database. We must also assume that the e-procurement process is implemented properly with the purchasing company and that the experienced e-procurement system provider works in concert with the buyer in order to realize optimal cost savings.
Numerous technology advancements have streamlined the e-procurement process and made it more user-friendly and less expensive. A company today can expect to reap significant benefits from e-procurement, including: saving money on purchases, reducing the time involved in the purchasing process, tracking current and archival activities and results, eliminating waste and improving the overall efficiency of the supply chain.
Take advantage of the technology advancements and don’t overlook the benefits of implementing an e-procurement process to strengthen your company’s bottom line.
To download copies of this entire article please use the following link.
We look forward to and appreciate your comments.
Posted in E-procurement, E-procurement Solutions, E-procurement Tools, Eprocurement Auction, Global E-procurement, Green eProcurement Practices, Online Procurement, Procurement Auctioning, Procurement Company, Procurement Outsourcing, Procurement Purchasing, Procurement Solutions, Procurement Tool, Product Procurement, Reverse Auction Procurement, Supply Chain Procurement
Friday, May 21st, 2010
Getting Started
First and foremost in getting the e-procurement process right is to select a solution provider or partner that knows what they are doing and is willing to work closely with you during the early part of the process. The e-procurement plan for each company will be somewhat different in order to meet the specific needs of the company. There is however a general order to things that will provide the best opportunity for success.
To realize the most benefit from your e-procurement process, you will need to:
• Develop your strategy
• Complete a detailed discovery
• Learn to understand how to set up your procurement events, even if handled by your provider.
• Use a provider with a high quality process and an extensive database for sourcing suppliers
• Clearly communicate how events will be run or executed to all involved parties • Review the process for sustainability and adjust as necessary
As mentioned earlier, it is incumbent upon your e-procurement solutions provider to be able to assist you in completing these tasks in a reasonable period of time. You should be checking the background of the team and the leadership that will be assisting you to ensure their understanding of your industry such as operations, technology, procurement, warehouse management, logistics, transportation, loss prevention, store management and other functional areas of your business that will be sourcing products and services. It is all about detail because knowledgeable attention to detail will improve quality, reduce costs and ensure the success of your company’s new e-procurement process.
Please join us for part III of this post series on Monday titled Reasons to Use E-Procurement.
To download the entire article please use the following link.
We look forward to and appreciate your comments.
Posted in E-procurement, E-procurement Solutions, E-procurement Tools, Eprocurement Auction, Global E-procurement, Green eProcurement Practices, Procurement Auctioning, Procurement Company, Procurement Outsourcing, Procurement Purchasing, Procurement Solutions, Procurement Tool, Product Procurement, Reverse Auction Procurement
Thursday, May 20th, 2010
Technology First is an Ohio based industry-led, industry-driven trade association dedicated to proactively representing IT in their region and highlighting niche technology companies.
Part I. E.Procurement Background .
Technology advancements are broadening the acceptance and utilization of e-procurement processes worldwide and making it available through internet access without the need for technology investment. The retail industry has been somewhat slow in considering e-procurement initiatives than have other industries. As a result, much of the lower tier one and tier two retail chains do not use the e-procurement resources that are readily available in the marketplace today. Some companies would like to, but do not quite know how to get started. In several cases, even the big retail chains are sourcing a smaller percentage of their total spend than the levels being recorded in other industries.
E-procurement processes have been utilized in maintenance, repair and operations (MRO) applications in a variety of industries in addition to manufacturing materials supply. The purchase of office supplies, consumable items and numerous types of hired services from snow removal to landscaping and facilities maintenance can all realize great savings by using the e-procurement process which can range from a simple RFQ to a very detailed RFI. Although e-procurement is oftentimes perceived as merely the purchase of products and services over the Internet, e-procurement is much more than just a means for making purchases online. It is a well-managed, organized process that handles all interactions between the purchaser and the supplier. This process includes optimal management of communications, questions and answers, bids, previous pricing information, inventory utilization and reorder sequences, access to suppliers, historical cost savings, supplier transactions and much more. With built-in monitoring tools, a well managed e-procurement process provides numerous benefits, the most recognizable ones being improved cost control and maximized supplier performance.
With the technology based e-procurement services that are available today, there is no excuse for overlooking this opportunity to reduce supply costs and boost the bottom line. Getting started is easier than ever and more user-friendly, thanks to continuing technology advancements. With high speed bandwidth, reliable security solutions, enhanced software and integrated programs, the e-procurement process is proving itself on a daily basis in terms of performance and reliability.
Please join us tomorrow for Part II of this series titled Getting Started. To download the entire article please use the following link.
We look forward to and appreciate your comments.
Posted in E-procurement, E-procurement Solutions, E-procurement Tools, Eprocurement Auction, Global E-procurement, Online Procurement, Procurement Solutions, Product Procurement, Reverse Auction Procurement, Supply Chain Procurement
Friday, May 7th, 2010
It hardly seems possible that we launched our company two years ago. At the time there were indicators for those paying attention of trouble in the global economy but know one had any idea just how bad it was going to get. In hindsight what a time to launch a company. When customers and business partners asked me why, my response was if you are doing what you believe in and the results you promise are true, then there really is no bad time to launch a business.
Our promise has been the same from day one, to reduce the cost of goods and services regardless of a company’s size or the size of the category being sourced. And, while doing so improve quality, safety and environmental focus. Today, two years later our customers will attest to the fact that we have held true to that promise.
Following is a short list of accomplishments that we are very proud of.
1. Over 700 educational blog posts relative to e-procurement issues of importance.
2. Over 1500 useful procurement related wiki terms and definitions.
3. Added an average of more than one new customer for every month in business.
4. Grew our supplier data base to greater than 380,000 retail suppliers
5. Sourced 100’s of categories from commodities to finished goods and services.
6. Sourced categories as small as $5K with savings > 30%.
7. Sourced categories as high as $80M.
8. Never held an e-negotiation event that did not result in savings.
9. Conducted every process in e-procurement including RFI, RFP and RFQ.
10. Installed our product in Asia in a multi lingual implementation.
11. Averaged over 24% savings over two years.
12. Developed a unique process for sourcing small spends for the retail mid market.
13. Grew our database to over a terabyte of data.
14. Helped companies source with environmental and social consciousness
15. Today released SafeContract™ a fully featured hosted Contract Management System.
To our customers thank you for your support. We endeavor to earn your business every day. To our business partners thank you for your guidance during a tough economic period. To the retail industry our goal is to be your best vehicle for reducing costs and improving earnings with an increased focus on corporate social responsibility.
Thank You.
Posted in B2b Reverse Auction, B2b Supply Chain, Business Sourcing, E-procurement, E-procurement Solutions, E-procurement Tools, E-supply Chain, Eprocurement Auction, Global E-procurement, Green eProcurement Practices, Online Procurement, Online Reverse Auction, Procurement Auctioning, Procurement Company, Procurement Outsourcing, Procurement Purchasing, Procurement Solutions, Procurement Tool, Product Procurement, Retail Supply Chain, Reverse Auction, Reverse Auction Procurement, Sourcing Safe Foods, Sourcing Safe Products, Sourcing Strategy, Strategic Sourcing, Supply Chain Procurement
Thursday, April 15th, 2010
According to Wikipedia Logistics is the management of the flow of goods, inforamtion and other resources, including energy and people, between the point of origin and the point of consumption in order to meet the requirements of consumers. So getting it there at the right price is an enormous challenge.
The constantly fluctuation cost of fuel is causing less stable freight rates and creating concern and worry in the executive suite about transportation expenses. As such many senior executives are looking to e-procurement solution providers to automate and reduce costs in the execution of their shipping plans.
Reverse auction tools, electronic RFI’s and other e-procurement tools are being used regularly in order to optimize bid collection by helping companies organize detailed information about their shipping patterns so they can compare daily or weekly offers from vendors.
Believe it or not many companies continue to use time-consuming manual processes to schedule shipments and have not even consolidated their rate tables into spreadsheets let alone assembled data with easy to use e-procurement tools. Many companies also continue to use static rules based on full loads to LTFL to a destination to decide which carrier they should use. The problem with this is that rate, routes, and a particular haulers availability change daily if not more often.
Call your e-procurement solutions provider and ask how they can help.
We look forward to and appreciate your comments.
Posted in B2b Reverse Auction, Business Sourcing, E-procurement, E-procurement Solutions, Reverse Auction Procurement, Supply Chain Procurement
