Archive for the ‘Sourcing Strategy’ Category

Procurement Planning​

Thursday, January 20th, 2022

 

Today’s blog is by Margaret Stewart, Director of HR and Administration at SafeSourcing.

As companies get the new year underway, there are likely a whole slew of things they are going over, from modified budgets to new processes. One key aspect that should be on everyone’s list are areas to examine for procurement. Setting up a list of 10, 25, 50, or even 100 different product or services that your organization could take a closer look at can be a great jumping off point to begin with your procurement team or procurement partner.

When reviewing the initial list, a procurement team or a procurement partner like SafeSourcing will look at a number of different aspects around those products or services. Price increases are one aspect that can be reviewed and addressed when undergoing a procurement process. Perhaps the incumbent vendors you have worked with for many years has regular price increases built into a contract that grow despite what market conditions do. This is another great reason to have your procurement team review what options you have for sourcing.

If your organization wants to get started with procurement efforts but isn’t sure where to begin or which categories, they should look at first, talk to SafeSourcing. We can analyze your spend and invoices and begin researching areas that would benefit your organization the most – a truly custom fit dependent solely on what your company hopes to gain and fitting your own goals.

When reviewing data, a procurement partner like SafeSourcing can set timelines that are timely, but do not short any essential aspects along the way. Using a procurement partner can free up your own procurement team’s time to focus on other important roles within your company, all while still delivering the service and value you expect from your own.

For more information on how SafeSourcing can help your procurement efforts, or on our Risk

Free trial program, please contact a SafeSourcing Customer Service RepresentativeWe have an entire team ready to assist you today.

 

 

 

 

 

Don’t lose your well-earned eRFX savings by delaying your Letter of Intent or Contract execution.

Thursday, January 13th, 2022

 

Today’s post is from our SafeSourcing Archives

In today’s post, we will be reviewing some of the issues that could occur when a Letter of Intent (LOI) or a new Contract, doesn’t get executed efficiently after a successful eSourcing RFX.

LOI or a Contract is delayed

When an LOI or a Contract is delayed, the savings identified in the RFX will not start accumulating until the first invoice from the new supplier or the incumbent supplier arrives post contract.  If a Contract is delayed, the RFX Host Company will have to pay the current contracts negotiated terms for products or supplies until the LOI and/or Contract is executed.  Depending on the volume of the items, it could equate to a lot of lost savings.

When RFXs aren’t awarded efficiently

One of SafeSourcing’s many service offerings is identifying historical categories to take to market.  Our goal is to create an RFX calendar that outlines future projects extending at least one year out. We then populate the calendar with past eRFXs that should be reruns due to previously negotiated contract expirations. We then identify upcoming potential spot purchases that are a result of our deep dive with our spend analysis tool into all category spending.  When RFXs aren’t awarded efficiently these rerun dates will change and as a result may cause future issues with the strategic selection of targeted dates for new RFXs. If you slip 5 months which we see way to often, and prices are headed up over 41% of your savings may be lost.

For more information on how we can help your business reduce spending and maintain savings 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 and appreciate your comments

 

Balancing Deliberate vs Emergent Strategy

Friday, January 7th, 2022

 

Today’s post is from our archives at SafeSourcing

People can be unpredictable. Its part of what keeps life interesting. But when a project gets thrown a curveball by someone who missed a deadline, overlooked a requirement, or is just plain uncooperative, the complexities that emerge are not typically the kind of “interesting” we want to experience. Michael Porter and Henry Mintzberg were the originators of the concepts of Deliberate vs Emergent strategy more than 25 years ago, and their views are still relevant today. We can account for most of the variables rational players bring to the table, but human beings aren’t always rational, and therefore not always predictable. This is why a balance between deliberate and emergent strategies must be achieved for any project.

The aspects of your project that should be deliberate are things like financial goals, timeframes, logistical requirements, etc. High level criteria for success often do not change and should be deliberate, pre-planned, and static. When our expectations regarding the execution of this strategy collide with reality in a way that will not resolve without adaptation, our ability to develop emergent strategy is essential.

No two procurement projects have to be run the same, and in fact usually should not be. Often times the optimal strategy for achieving pre-determined goals will not be known until some insight has been gained about the supplier base; how many suppliers are capable of providing the product/service? What is the geographical availability of capacity? Is pricing market regulated? What service level guarantees are available? Is the market experiencing price increases/supply shortages? These variables should influence our strategy for execution, by changing things like baseline pricing, terms and conditions, SOW’s, and freight considerations.

Some managers believe that any form of adaptation is a weakness of strategy. It isn’t. The old way of thinking about strategy is to assume all outcomes can be known and predicted. That’s why most of the Fortune 500 Companies that existed 50 years ago don’t exist anymore. They believed their position to be a product of previous strategy that should never be changed. The companies that have thrived over the years have continuously adapted, reinventing themselves over and over again to stay relevant, and capable of exceeding their customer’s expectations.

For more information on how SafeSourcing can assist your team with this process 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.

Here are some talking points for developing procurement goals for the New Year.

Thursday, December 30th, 2021

 

Today’s post was written 11 years ago by Ron Southard, CEO at SafeSourcing.

Most if not all of this is still relevant.

Companies with a few customers and companies with thousands of customers are often looking at the same types of issues. The process and the results are very similar regardless of scale and as such require the same careful focus to drive targeted results. If we were to white board what should be included in our procurement goals many of the following areas would be included.

1. Lower costs
2. Consistent and improved quality
3. Products that guarantee safety for your customers
4. Smooth transition to new supplier relationships
5. Quality product specifications
6. Unlimited new sources of supply
7. Well thought out internal and external collaboration and aggregation
8. Support for environmentally focused products
9. Support of CSR Initiatives.
10. Evaluation of low-cost technology solutions
11. Joining and collaborating with share groups or GPO’s
12. Review of Incumbent suppliers
13. E-Sourcing or e-procurement training.
14. Existing procurement tool evaluation
15. Existing contracts evaluation
16. Detailed spend visibility and evaluation
17. Off or Near Shore sourcing opportunities
18. Sourcing and Supply Chain Knowledge transfer
19. For resale sustainable practices review
20. Perfecting The expense category

As your organization develops their list similar to the one above, prioritization and elimination sessions will lead you to a best few focus areas from which you can refine your e-procurement goals for 2011, oops 2021.

Please use the above guidelines as a framework for your thinking. Remember that simple goals written down are the most achievable.

We appreciate and look forward to your comments

Welcoming the New Year Resolutions Part I of V

Tuesday, December 28th, 2021

 

Today’ s post is by David Wenig;  Senior Vice President of Sales and Services at SafeSourcing.

As we welcome in a new year, we often speak of our resolutions. Personally, the resolutions that we make are likely to include exercise more, become more environmentally conscious or lose weight. The same concept of resolutions should take hold in your procurement department. Take the New Year as a challenge to drive new initiatives that will reduce spend in a sustainable manner.

If our first resolution was to exercise more, we could also apply that to procurement. That is to say that we could take more steps toward efficient and effective procurement. You may focus your RFI, RFP and RFQ efforts on initiatives that have been deemed the most significant based on spend or some other factor, but what about all of the other initiatives that go unnoticed? How many of these smaller spends are allowed to continue year after year while your focus is on these larger spends? Make a plan to include more of your contracts and share that plan with your strategic sourcing partner.

If you were to say “I want to lose some weight this year”, couldn’t you also say “I want to reduce my spend this year?” Just like it is for a body, exercise will lead to weight loss. Stay on track with your procurement plan and you will see the spend dollars drop. Increasing your company’s strategic sourcing initiatives to involve all projects will have a significant impact on reducing your overall spend.

In the remaining segments of this series, we will continue to explore ways to take advantage of that New Year energy.

Tomorrow, we will take a look at how to get your department prepared for the new (or renewed) procurement initiative.

We look forward to and appreciate your comments.

How SafeSourcing Saved Christmas…

Friday, December 24th, 2021

 

 

Today’s Christmas Eve post from a former associate is from our  SafeSourcing, Inc Archives

As with most children being curious, my 7  year old niece and I were baking cookies last weekend when she said, “Aunt Heather, what do you do for a living? Mommy is a nurse and Daddy is a policeman. What do you do?”

Well, I said, thinking quickly of how to explain what a project manager does in the e-procurement world at SafeSourcing, “I help Santa with getting toys for presents and delivering them to all the children around the world.”
She said, “Aunt Heather, you’re silly! Santa has elves that make the presents, and Santa has reindeer help his pull the sleigh to deliver the presents!”

“Oh Alli, I have to tell you a secret, but you have to promise not to tell a soul what I tell you, ok?” She agrees.

Santa needs help lots and lots of help. Yes, his elves make the homemade toys, but toys like Furbies and Barbie’s have to be made somewhere else and delivered to the North Pole to be wrapped.

With big eyes, she says, “ooohhhh. That makes sense. Elves are mostly boys and boys don’t know anything about Barbies!”

So then I tell her, that Santa comes to me with his list of toys and how many he needs, and it is my job to make sure he buys them all much cheaper than what he can buy them for at the store. In fact, it is my job to make sure all the companies that make and sell the toys compete against each other to make sure Santa gets the best price for them.

“Wow!” she said, you have an important job helping Santa!

I said yes, but that isn’t all I do for Santa. She said really? I said, yes, I help him deliver the presents too. She said, how?

I said that Santa does use his sleigh and reindeer for most of the night, but the reindeer do get tired. So we help Santa by hiring a charter jet to cross the ocean with the presents and reindeer. Saving him money by having the airlines compete against each other to get lower pricing for Santa. This way the reindeer get to rest and Santa can get to the other side of the world much faster.

Also Santa pre-ships the presents to parts of the world to keep the weight down on the sleigh. So we help him with semi-trucks picking up the presents and taking them to all areas of the globe waiting for Santa to pick them up to deliver them to all the boys and girls. I explain to her that this is called transportation logistics. I told her that, like the people who make and sell toys, we ask the trucking companies to compete against each other lowering their prices for gas (fuel rates was too hard to explain to her), and mileage.

My, oh so smart niece, says, “Santa really has a big job to do in one night. He is so lucky he has you to help him!!”

So I ask her, do you understand what I do now?

She said,” yes, you help Santa buy toys and you help him fly across the ocean in an air plane, and you help him ship presents across the world to be picked up and delivered all in one night, AND you save him lots of money!”

So if SafeSourcing can help save Christmas, what can you do to help save you money in your business?

If you’d like to learn more about how SafeSourcing can help energize your self-service program, please contact a SafeSourcing customer services representative.

We look forward to and appreciate your comments.

A Christmas related spend cube analogy. “Little Jack Horner sat in corner eating his Christmas Pie.”

Friday, December 10th, 2021

 

Todays post is an oldie but goodie from Ron Southard CEO at SafeSourcing.

And it’s still true today.

The rest of the Little Jack Horner spend cube analogy might go like this. He stuck in his thumb and pulled out a peach and said what the heck is a peach doing in a plumb pie?

If you look to Wikipedia, there is no definition of a spend cube. You can find information relative to spend cubes in a discussion about spend analysis. However t the original discussion we are talking about data in this case multi-dimensional data about spend information. Consultants love to talk about it because it allows them to charge you a lot of money without necessarily delivering any results other than, well a spend cube.

Quite frankly you are going to hear terms like data model, data warehouse, data scrubbing, data cleansing, data access, data sources and incomplete data. All of which allow consultants to charge you more money in order to develop yours from what is likely incomplete data kept in many places like GL’s, ERP systems and the like.

Once you get your model or cube, I promise you additional discovery is going to be required in order to determine what categories or products should go to market. One category manager’s category is another category mangers product. So now what?

Don’t get confused by consultants touting their spend cube analysis software because if you do, you will be in for a dime in for a dollar and continue to get peaches when you are looking for plumbs.

If you’re totally confused, SafeSourcing can help with our SafeSpendAnalysis™, and we deliver results very quickly. Contact a SafeSourcing representative.

 

Is your company active in the Crypto Currency Space? Should you be?

Friday, December 3rd, 2021

 

Today’s post is by Ronald D. Southard, CEO at SafeSourcing Inc.

At SafeSourcing we can now accept Crypto Currency Payments and we invest in Crypto Currency. It is not as easy as everyone thinks. In our case we could take payments in Bitcoin, Ethereum and Dogecoin. At the moment we are just accepting BTC. We could add more easily but will not until we understand the risk models.

When looking at our balance sheet, it just seems insane to not invest in an asset class that has averaged over 100% growth for over 10 years and represents a store of value that you cannot get in stocks or any other asset class and certainly not in cash. I will tell you that I have spent an unusually large amount of time trying to understand this class of assets. First it was just learning the language, much of which is slang from traditional investing language. Once I thought that I understood the terminology, I began to look at floor models, stock to flow models and growth targets compared to existing asset classes like Real Estate, Gold etc.

Just as a primer, here are some terms that you will want to know as a starting point.

  1. Mint
  2. HODL
  3. DEFI
  4. NFT
  5. Altcoin
  6. Fiat
  7. Blockchain
  8. Ethereum 2.0
  9. Exchange
  10. Mining
  11. Bitcoin
  12. FOMO

There are a number of great educational offerings in the space with explanations and ongoing discussions and education. YouTube and Twitter are both reliable sources. Here are a few folks that I like to listen too with their Twitter Links. They are also easy to find on YouTube

  1. Michael Saylor
  2. Raou Pal
  3. PlanB
  4. Anthony Pompliano

At this point I am no expert on Crypto Currencies; however, I do have over one thousand hours of education and think I can help if required. If you like further information or would just like to discuss this topic further, please contact SafeSourcing and leave me a message. I will get it immediately and respond as required. Best of Luck.

 

When Life Gives Us Lemons…

Friday, November 19th, 2021

 

 

Today’s post is by Dave Wenig, Senior Vice President of Sales and Services at  SafeSourcing.

Depending on who you talk to, most executives responsible for procurement will tell you the road ahead for procurement is either going to be difficult for a while longer or a whole lot longer. The reality is there are a bevy of challenges putting pressure on the markets for nearly all goods and services and it will take a while for enough of that pressure to be relieved to see a measurable improvement. If you are in the procurement space, that sure sounds like life giving you lemons.

It has been this way for a while though, so there is no sense on dwelling on the challenges. It is better to face the challenges head on. The best procurement teams and most savvy executives will – like always – find a way to make lemonade.

Much has been said already about the constant price increases we are all seeing. You cannot read the news or watch TV without seeing or hearing about the prices of everything going up. But it is not all about price. Sure, price is an important piece of procurement, but price is not everything. Price is merely a symptom. Right now, what is more important is ensuring that you will be able to receive the products or services you need on time or even at all.

Not too long ago, this was a given. You order products and the products arrive. You contract for services and the services are rendered.

With this shift of importance, the ability for a strong procurement team to source what they need becomes a competitive advantage. The construction company that cannot source their windows is one who cannot open a new office building. The ever-growing importance of a robust database of qualified vendors and the ability to source and negotiate well in times like this can be the difference between failure and success. Sourcing activities now require even more attention and resources to complete. More complex negotiations are commonplace just to achieve normal results. The stakes are much higher for procurement than the cost reduction goals of the past.

Yes, you have been handed lemons. Make sure your team realizes that now is exactly the right time to make lemonade and that this can be done well.

You have the ability to do this too. Do not keep accepting cost increases and wishing you could create cost reductions. Contact SafeSourcing with your procurement needs and we can help.  If you would like more information on how SafeSourcing can help your procurement efforts, or on our Risk Free trial program, please contact a SafeSourcing Customer Service RepresentativeWe have an entire team ready to assist you today.

Ethanol Prices Still Climbing  

Wednesday, November 17th, 2021

 

Today’s blog is by Gayl Southard, VP of Administration at SafeSourcing.

As drivers return to the road, ethanol prices are reaching record highs.  Ethanol, the corn-based fuel, is a common gas additive, has risen about 50% in 2021.  The price pushed to over $2 a gallon earlier this year, the first time since 2014.  Gasoline prices are the highest they have been in seven years, averaging $3.41 a gallon as of November 8 reported by the U.S. Energy Information Administration.   The increase equates to $1.31 from last year.  Commodity prices in general have risen.  Agricultural prices have risen as the supply chain has been clogged.  It has been reported that refineries have been producing more fuel but have not been able to keep up with the demand.

At the onset of the COVID-19 pandemic, the production of ethanol fell to all-time low last year as people stayed off the roads, leading to ethanol production to stop and the closure of unprofitable plants.  “ The ethanol margins that we’re seeing right now in the market are extremely healthy,’ said Ray Young, ADA’s chief financial officer, on the company’s  earnings call.  ‘And that is just reflective of a very tight supply-demand situation right now.”1.

Farmers have indicated the price for fertilizers used in corn crops have increased substantially.  This has pressured farmers to plant less corn (a fertilizer intensive crop) in favor of soybeans that use far less fertilizer.

For more information on how SafeSourcing can help your procurement efforts, or on our Risk

Free trial program, please contact a SafeSourcing Customer Service RepresentativeWe have an entire team ready to assist you today.

References……………………….

1. Kirk Maltais, WSJ, 11/11/2021