Archive for the ‘Sourcing Strategy’ Category

To Fix or To Prevent…. Part I of V

Wednesday, August 15th, 2018

 

Today’s post is from our SafeSourcing Archives

One of the toughest questions that face companies is where to put their Repair & Maintenance budget dollars.  One train of thought is to try and reduce the costs for hourly repair rates and parts as much as possible and then deal with the issue when it arises, while the other train of thought is to invest heavily in a preventative maintenance program and try and extend the life of the equipment and head off major damages before they occur.  Over the next week we will be taking a look at a recent SafeSourcing study on Refrigeration repair and maintenance decisions our customers have made and apply it to repairs and maintenance of all equipment.

Repair and Maintenance spend is one of the largest non-payroll expenses that companies have.  Whether it is to service HVAC, refrigeration, computer, security, roof, or other equipment, companies are spending hundreds millions of dollars to keep their machines and businesses running.  SafeSourcing customers generally fall into one of three categories when we begin to discuss the repair and maintenance categories with them and out of that proper move forward strategies can be developed.

Exploring – These customers are unsure of which model will work best for their organization.  Historically they may have “tinkered” preventative maintenance plans but by and large they have been primarily break fix companies.  Most of these customers are seeing R&M costs rise and equipment life expectancy decline and are at the point where they need to determine which model will work best for them.  These customers typically will follow all three phases of exploration which will be covered over the next three days.

New management – As seems to be happening every day, companies are being acquired, companies are merging, old regimes are retiring and new ones are coming up to speed.   During these times companies tend to review every aspect of their business and where money is being spent regardless of whether it is an area that seems to be working well.  Repair and maintenance expenses are typically an early category that is reviewed because of its size.  While companies in this group tend to follow the three phases, they tend to use it validate they are doing the right thing just as much as to explore a different way of doing things.

Established – Customers that fall into this category have already invested the time to determine the best fit for their company and have usually conducted extension studies and data reviews to land themselves where they are today.  Even with all of that, these companies will still look at running phase 2 and 3 so that they validate any new companies or programs that have been introduced since the last contract and then use those details to develop Statements of Work that are the most beneficial for their company.

Please continue to follow this series this week as we break down the most widely used approaches for determining R&M needs, concluding with some of the average results we are seeing with our customers from these three phases.  For more information on this tool 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.

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Mistake-proofing your business!

Thursday, July 26th, 2018

 

Today’s post is our  SafeSourcing Archives

All human activities have a percentage of error. For example, out of all the email we send in a day some percentage will have a grammar error, for all the mouse clicks we make in a day some percentage will miss their targets. These “fat-finger” category mistakes are fairly benign, and would take quite a bit of corrective time and effort to reduce. Sure, we could spend an extra 10 hours a week slowing our clicks and typing down to a crawl to make sure they never miss their mark, but most businesses don’t have the spare time or patience to do so. However, when our processes have vulnerabilities built into them, where a stray click can create a lawsuit level problem, the “fat-finger” category of mistakes suddenly becomes a big deal.

Make no mistake, inadvertent minor errors WILL happen, and there’s nothing economically feasible you can do to eliminate them entirely. You CAN however, structure your processes and systems in a way that makes it difficult or impossible for small mistakes to have unforgivable consequences.

Identify your vulnerabilities: Evaluate your systems for what functions are business-critical. What processes, buttons or links have the highest risk associated with their execution? Which ones would buy something your business couldn’t afford, send messages you can’t take back, or delete records you can’t recover?

Create roadblocks: You know those pop-ups that annoy you so badly that say “are you sure?” after you’ve hit the “buy now” link? These intention-checking messages help you slow down your furious clicking, and can prevent execution of an erroneous command.

Improve bad layouts: Do your systems have dangerous buttons/links right next to innocuous links? Maybe your “print” button is next to your “fire everybody” button? Your “Decline award of business” button next to your “buy all” button? Your copy/paste command next to your “wipe database” command? There’s no good reason to build vulnerability into your system layout.

Sensitive Communications: Are you frequently sending sensitive information back and forth over email that you could be automating through a system with protections in place? One mistake and you could send proprietary information from steve@vendorA to steve@vendorB, and you have a breach of confidentiality on your hands. Take advantage of the data segmenting capabilities available in most modern systems.

Even your most talented team member will make a small mistake, and if it’s at the wrong place at the wrong time, or wrong link on the wrong system, it can have disastrous consequences. Don’t get rid of the talent, remove the unnecessary vulnerabilities in your systems, so that your people can focus on using their skills. Your company’s internal processes shouldn’t be its riskiest activity.

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.

 

 

 

 

 

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The Art of the Pilot ​

Tuesday, July 17th, 2018

 

 

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

At SafeSourcing, we typically start our engagement with a simple Pilot Program. The pilot is our trial offering for new clients who are interested in what SafeSourcing can do for them and are ready to test us out. When we engage with the client, we start with two relatively simple categories to use for our client’s first eProcurement events.

We select simple categories so that the client can focus on understanding the process and evaluating the results. We also recommend categories which we host fairly commonly. Another benefit for hosting simple and common categories is so that we can provide quick results. For example, some common pilot categories for retailers are copy paper, stretch wrap, plastic bags, and paper bags. There are more, or course, and that list would vary from industry to industry.

The SafeSourcing Pilot Program is a 30-day trial of SafeSourcing’s services. Because we are able to drive very quick results, 30 days is a sufficient amount of time to fully experience and evaluate the benefits of the process.

Another very important benefit of the SafeSourcing Pilot Program is our Cost-Neutral Guarantee. SafeSourcing guarantees the pilot will be successful and will drive savings. If our client does not get savings from the pilot, then they will not be responsible for our fees. This means that our new clients are only risking the time they spend working with us to prepare for their events.

With no risk and guaranteed savings, the SafeSourcing Pilot Program is a great way to try eProcurement within your organization. SafeSourcing’s clients are attaining incredible savings averaging over 24% in 2017. Start with your SafeSourcing Pilot Program soon and get started on your own. 

We look forward to and appreciate your comments.

 

 

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How to insure the sustainability of e- RFX events for your customers.

Friday, July 13th, 2018

 

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

If you follow these simple guidelines it will also encourage senior management to consider placing more of the companies spend under the umbrella of e-procurement tools and specifically reverse auction tools.

Once you are armed with a robust detail focused supplier database and related e-procurement tools:

1. Conduct a detailed category discovery
a. Learn all there is to learn about the customers way of doing business.
b. Walk, observe and annotate all activity at distribution centers and warehouses.
c. Walk an array of stores and review all formats of the enterprise.
d. Compile a list of all corporate categories
2. Rank categories by
a. Total spend
b. Importance
c. Sourcing frequency
d. Quality objectives
e. Look for aggregation opportunities
i. Lighters, lighter fluid, flints, fire sticks.
3. Conduct supplier discovery
a. Rank suppliers
i.   Size
ii.  Experience
iii. References
iv. Environmental certifications
v.  Safety Certifications
4. With all of the above in hand; develop a three year game plan
a. Identify suppliers for each event over the three years
b. Develop savings targets by category
c. Develop a three year time line  for all categories
5. Role Play internally  the first year for a test category
a. Ask the following questions
i.   How will you award the business
ii.  Review alternate scenarios
iii. Review savings by scenario
iv. Determine which suppliers will be invited back
v. Determine what new suppliers from your database search will be invited during the next year or cycle.

I’m sure you can fill in a few more items prior to your launch, but the key is to have a plan and to write it down. Now you do.

If you’d like Safesourcing to conduct a cot neutral 2 day discovery session for your procurement team, please contact a SafeSourcing Customer Services Account Manager.

We  look forward to and appreciate your comments.

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Freight Tendering 101

Monday, July 9th, 2018

 

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

This author has been in and around the freight business for years. Actually for 40 years. Just like the unrelated movie, I have seen it all. Planes, trains and automobiles (trucks really) to be sure but also ocean bound freight. The ships and planes get bigger, but at the end of the day the same issue exists. How do companies get their products to where they need to be efficiently and at a cost that is acceptable in order to satisfy customer demand?

This is not necessarily about your internal optimization models; it is more about the data that feeds your internal optimization models. That is of course if you even have one. The basis for collecting that information is not all of the math calculations and pivot tables; it really is the following types of data.

• Lane data in distance for your delivery model such as Plant to DC.
• Volume discount data from carriers
• Lane rate per mile
• Fuel Surcharge rate
• Human resources rates for loading and unloading (Lumpers in the US)
• 3PL storage rates
• Load balancing charges for LTL versus FL

There may be other data that is required for your individual model, but the above will cover most of what you need to come up with a well rounded format that freight companies can easily bid on.

Relative to who should be bidding; this authors recommendation conducting a three step process that includes a detailed RFI, followed by a detailed RFP and then ultimately the RFQ data compression piece or a reverse auction.

• RFI  – Incumbent and other participants selected from a quality sourcing  database
• RFP – Participants include a reduced number from the RFI process
• RFQ – Includes all RFP participants unless otherwise indicated by the host.

The terms and conditions of the reverse auction or RFQ can cover the balance of information needed by providers that relates to quality, certifications, payment terms, safety, insurance etc.

If you want to get control of your freight costs, please contact a SafeSourcing customer services representative.

We look forward to and appreciate your comments.

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Looking Back Helps you look forward

Thursday, June 28th, 2018

 

Today’s post is by Mike Figueroa, Assistant Director of Customer Services at SafeSourcing.

I believe it’s important to take a look in the rear-view mirror once in a while. To evaluate where you started, what it took to get further, your method for navigating, or things you wished you had done differently. Over the course of 6 years at Safe-Sourcing I have learned a lot, and think it’s worth sharing what I want to keep doing in the form of professional habits. However, the most valuable lessons might be just identifying how I want to grow, and what I want to do better:

Professional Habits:

Taking notes: Just do it. Maybe you want to appear as though you didn’t need to be told something to do it, or you just don’t like writing things down. Researchers have determined that we only retain about 11% of what we read or hear on average, and that isn’t nearly enough when you are having a fairly detailed conversation upon which the success or failure of your project may be determined. So do yourself a favor: Take notes for everything, and save them in a format that works best with your workflow (Laptop document, email, cellphone app, hand written, etc.) and check them off as you implement them.

Correlation: In procurement and inventory control, this means having unique identifiers that link 2 or more variables together. For example, how would your GPS app navigate you to the right location if there were multiple buildings with the exact same address in your city? A lot of people would get to the wrong place. Unique identifiers are a lot like addresses; they lead to a unique product or spec, so that there is no room for ambiguity in identifying exactly what you are looking for. Committing to a specification of a product because it “looks like” the specification of another is relying on luck to get the right product to fit your needs, and it will eventually end up biting you. Relying on exact matching of unique identifiers will make sure that what you want, and what you get, end up being the same thing.

Changing/Adapting: This requires a consistent willingness to reinvent one’s-self, and the humility to assume we always have new things we can learn. Sometimes this means taking notes, implementing a new policy off of those notes, and changing the way we do something going forward without having to check that its getting done right. This could also mean not adhering to static job descriptions and titles, so that when we see a need arise, we find a solution and create a path forward regardless of if the waters have been charted yet or not.

Things I want to do better:

Training “Sessions” vs ad-hoc feedback: Not everyone can turn on a dime, especially when they’re deep in the weeds. How would you find a dime in weeds anyway?? When I’ve seen new policies not get implemented quickly enough with my team (or even myself), I know it’s because I need to undo/redirect old habits. Every day we come across opportunities for improvement, but sometimes that opportunity is buried in an email from your boss 23 emails down a chain of long emails. A more formal training session has worked much better in many cases I’ve seen, and is something I would like to use in the future to develop my teams.

Reward, and provide opportunities to practice: Related to training, I really do think practice is necessary to change a previously habitualized work policy. It can be as simple as having the team do mock phone calls, draft document templates, or create faux financial calculations. But actually going through the motions of a new procedure helps re-wire the muscle memory, and memory ques, that people often need to happen in order to change habits. Furthermore, in highly dynamic businesses, I need to reward and recognize those that put forth the effort to adapt and learn quickly. The better my team is at this, the easier it makes my life as well.

Pass along the method, not just the order: Perhaps my biggest takeaway from looking back is that I want to empower my team to make the right decisions, not just teach them to take orders. This means I need to take more time to sit down with a team member, and review how to approach and analyze a problem. I would focus more on how to arrive at a conclusion, rather than just praise or criticize the result. This would be the counterpoint to the old-school means of changing activities by beating policy into the heads of employees. Policies are informed by objectives, and without understanding how to strategize to achieve those objectives, following policy will manifest as filling orders even when it doesn’t make sense to.

Likewise I need to ask well-worded questions to illicit a breakdown of how my mangers think about problems as learning opportunities for myself. I want to take a first-principles approach to both learning how and teaching how-to problem solve. As mentioned above, I believe humility is going to be a key ingredient to enacting this self-managing policy. However, I believe a lot of managers have an aversion to humility because it seems like such an antithesis to authority. I read an article recently by Dan Cable that I think summed up nicely why this is not the case:

“Humility and servant leadership do not imply that leaders have low self-esteem, or take on an attitude of servility. Instead, servant leadership emphasizes that the responsibility of a leader is to increase the ownership, autonomy, and responsibility of followers — to encourage them to think for themselves and try out their own ideas.”

Please leave a comment or for more information on how SafeSourcing can assist your team with your procurement 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.

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The Difference between Customer Service and GREAT Customer Service

Monday, June 11th, 2018

 

Todays post is from our SafeSourcing archives

When you think about any type of customer service, you usually just remember your bad experiences and really great experiences. Anything that is considered expected just seems to slip through the cracks without being thought twice about.

So, how do you stand out to be that company that everyone remembers and talks about? I’m going to discuss two steps that, if you follow, you will have a very satisfied customer/client that keeps coming back to you and also refers you to others as well.

Going Above and Beyond:  Giving a customer more than what’s expected or out of the norm is always something that will be remembered. Another way to go above and beyond is overachieving. For example, if a customer requests a document by a specific date, shoot for a date that is prior to that deadline, this will show you’re engaged and committed to exceed their expectations.

Good Communication:  Make yourself readily available at all times, even if it is after hours. This shows that you are committed to get the job done and make the customer happy. Keep the customers or clients up to date and always in the loop with any information needed or requested.  By being proactive with your communication, the customer will not have to continually chase you down for information or updates.

Customer Frame of Mind:  The number one key to creating a happy customer is by placing yourself in their shoes.  Continually think, “If this was my decision to make, what information would I need?  What details would I need to know about a new vendor?  What are the missing pieces I would need to award this business?”, and then get those things.

Creating an Overall Memorable Experience:  If the above steps are followed, you will have a very happy customer. They will understand that you went outside the expected services to make sure they had a very painless and positive experience. They will remember the experience and want to share their experiences with others.

For all of your procurement needs, please contact a SafeSourcing Customer Service Representative for a great customer service experience. A service that is more than just what’s expected and that you will want to share with all of your family, friends, and/or colleagues.

We look forward to your comments.

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Scope of Work

Thursday, May 31st, 2018

 

Today’s post is from our  SafeSourcing Archives.

When a business issues a request for proposal or request for quote, it will include specific information relating to that project. This information must provide adequate details for respondents to determine if the RFP or RFQ is applicable to their business structure and if so, how to respond. A comprehensive scope of work delivers that pertinent information.

The scope of work details the services the selected vendor will provide on the specific project and the work that will be performed, frequently under contractual obligation. The scope of work lists performance requirements, normally references specifications, and will include a list of deliverables. The scope of work describes how the required work will be completed, with specific tasks listed with their deadlines. The task descriptions may also include methods desired for completing given tasks.

When entering into a purchasing agreement, many times the first document may not be the purchase agreement itself, it will likely be a purchase specification or scope of work that will use an existing agreement. It is possible to have a rock solid purchase agreement but still have difficulties if your purchase specification, statement of work or scope of work is not suitably written.  In the event of a dispute between the parties, these documents endure the same examination as the purchase agreement’s terms.

An accurate scope of work acts as a roadmap for your project, keeping it focused and on track. From a purchasing perspective, it is critical as it details what is being purchased, quantities, item specifications, amongst other critical purchase requirements.

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.

 

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Finding the Right Mechanic

Friday, May 18th, 2018

 

Today’s post is by Troy Lowe; Vice President of Development at SafeSourcing.

Do you have a good reliable mechanic that you can count on for fixing and maintaining your vehicles?  In business do you have the right M&R partners for your fleet? If not, you need to look into finding one as soon as possible and the search can be much the same for business and personal use.  You may be overpaying or using one that is not as reputable as you as think.  It’s a good idea to find a reliable technician before you start having problems with your vehicles.  To start your search you may want to talk to friends, relatives and colleagues and see who they may recommend.  There are also sources available online such as the Better Business Bureau, Angie’s List and by performing searches for places that are approved by AAA.

When you find one that you think you may be interested in, check to see if they have any certifications.  Ask if the mechanics are ASE certified.  ASE certified means that the mechanic went through testing with the National Institute for Automotive Service Excellence and has been properly trained for the position.  Businesses that are certified may be a better option because they have been vetted by another organization.

Once you have found a shop, start out by having some routine maintenance done on your vehicles such as fluid changes.  When the work is complete, see if you are able to talk to the mechanic about the work and any other issues they may have seen.  Talking to the mechanic may help you get a feel for how knowledgeable and trustworthy they may be.  This will also give you a chance to look around and see how well organized and how they keep their shop.

As you know, finding a reliable mechanic takes some work so if you need help finding one, feel free to contact SafeSourcing.   We conduct M&R events several times per year and  can gather all the necessary information for you and help you decide which shop meets your needs.  If you would like more information on how SafeSourcing can help you, please contact a SafeSourcing Customer Service representative.  We have an entire team ready to assist you today.

 

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Getting Started​ ​

Thursday, May 17th, 2018

 

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

Years ago, I wrote another blog posting called “Getting Started.” At the time, this topic was among the most common in all of the conversations I had. All this time later, that is still true. While the titles have not been as direct as that first blog, I have written several others that share this theme. Today, I am revisiting this again. In “Getting Started,” we considered some basics which I’ll seek to update here today.

One of the basic points that we considered back in 2012 was the importance of leveraging your eProcurement Services provider as a partner to help establish a plan. This is even truer today than it was then. Like in many fields, constant improvement and innovation has greatly changed the world of Strategic Sourcing. One way that your partner is able to help you develop a plan better today than in the past is through advances in analytics. Offerings like SafeSourcing’s own SafeSpendAnalysis™ which allow for increased visibility into a company’s spend have been vastly improved over the last few years. The insights that tools like this generate fill in enormous gaps in the knowledge that an organization has and also give that organization the tools to create a plan that is based on actionable intelligence. Now, more than ever, you should rely on an experienced partner as you get started.

In the blog from 2012, I also wrote about relying on the experience of your partner as you get started. Along with the tools and the understanding needed to determine your plan, your partner can also help you execute against that plan. A partner like SafeSourcing will have many years of experience to call upon which includes specification templates, suppliers, strategic advice, and more.

In 2012, I wrote that “The next question you will ask is “why didn’t I start sooner?” If you haven’t started yet, I encourage you to do so. In the last several months, I’ve had that exact conversation as our clients have realized the capabilities of eProcurement and have lamented about lost savings opportunity because they sourced products and services before they engaged with us and know they have likely overpaid.

Please contact a SafeSourcing Customer Services Associate for more Information

We look forward to and appreciate your comments.

 

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