Archive for the ‘Sourcing Strategy’ Category

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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Print Fulfillment

Tuesday, May 15th, 2018

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

If you aren?t familiar with print fulfillment standard practices, it can be surprising to see how complicated the program can get. In retail, for example, printing can be segmented by uses such as signage, labeling, circulars, mailers, flyers, banners, and promotions. Each of these segments is usually kitted by the print fulfillment provider, who also stores and distributes the final product. However, the whole process is further complicated by the fact that each store in a retail chain will have different needs that may require specific promotions, store address prints, quantities relative to store size, quantities relative to market, or differing departments between stores such as deli, floral, or pharmacy. Therefore, the whole process is typically outlined in complex spreadsheets that breakdown stores, campaigns, print files, costs, logistics,?and lead times. Managing this process is a delicate dance between all parties involved, and can seem impossible to negotiate better pricing. However, we routinely see double digit savings in this category from companies who take their programs to market.

The first thing many companies will find when exploring the market for other print fulfillment providers is?inconsistency. For example, you may find that you have previously priced a banner from a print company, and find that the?fulfillment?company you buy that banner through, marks up the cost of the same banner by 40% before freight. Another inconsistency you may find is that you are being charged two?different price points for the?exact same kind of print/material/color, just because they are in different kits, and you?re already being charged a kitting fee. If you have an agreement that allows you unlimited changes to the print file on any product that doesn?t require a re-tooling, the aforementioned price difference doesn?t make any sense.?Now that you?ve found these inconsistencies in price for products with a common denominator, you can structure your RFQ appropriately.

If your program data is captured well within a table, you can use any number of programs to identify and consolidate your print types. For example, do you have the same 8.5 x 11/60lbs/4-color product being used in 8 different kits with multiple price points? Itemize that as ONE product, with the print file and kitting to be communicated post-bid in a master print schedule. Go through the same exercise with all of your activity, and you will find that the complexity of your program can have its volume summarized in a much reduced number of activities.

SafeSourcing has walked their clients through this exercise countless times, and then compressed the pricing through our e-suite of procurement tools. We do the heavy lifting, engage the vendors, and negotiate the pricing on your behalf.?Utilizing our expertise, you?ll never have to be subject to costly pricing inconsistencies for your Print Fulfillment needs ever again.

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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Part II of II. Are reverse auctions a good tool to use in the retail distribution cost plus arena?

Thursday, May 10th, 2018

 

Todays post is by Ron Southard, CEO at SafeSourcing

Yesterdays post reviewed why and how this author felt that reverse auctions were potentially good for both the distributor and the retailer alike. So just what is cost plus?

According to Wikipedia? Cost-plus pricing is a pricing method used by companies. It is used primarily because it is easy to calculate and requires little information. There are several varieties, but the common thread in all of them is that one first calculates the cost of the product, and then includes an additional amount to represent profit. It is a way for companies to calculate how much profit they will make. Cost-plus pricing is often used on government contracts, and has been criticized as promoting wasteful expenditures.

Once unit level cost has been established for the distribution of products it?s easy to turn that into a percentage and add it to the price of a product coming up with a distributed unit price or category price. The most important part of this pricing exercise for the distributor is to get the distribution costs correct. This can include price of storage, freight, length of travel, driver cost and any number of other costs. This is an area where a distributor can lose a lot of money if they are not very careful.

So, are revere auctions a tool that can help distribution companies?? The answer is a clear yes both above and below the gross margin line. If you like to know more please contact me at ronsouthard@safesourcing.com.

We look forward to and appreciate your comments.

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Part I of II. Are reverse auctions a good tool to use in the retail distribution cost plus arena?

Wednesday, May 9th, 2018

 

Todays post is by Ron Southard, CEO at SafeSourcing

A lot of distributors have told this author that reverse auctions don?t apply to them because they use the cost plus model and as such they just add their price or profit margin on top of the contract price with their source to drive their distributed price.

The fallacy in this thinking is that it may make buyers and category managers lazy in their approach to driving margin within the categories that they manage. This results in a higher price to the retailers they distribute to and ultimately to the consumer or their customers customer. A worst case scenario is that the consumer stops shopping at their customer?s store which reduces overall volume and further increases prices by not meeting volume incentives. It?s a slipper slope.

Off course this argument is relatively easy to overcome when we get around to discussing capital goods and expense related products and services area. These areas have an impact on the distributor?s net profit. And I?m sure that many of you will agree that just because one says they are a cost plus provider does not necessarily mean it?s true in the most pure sense of the definition.

Check back tomorrow and we?ll review what the real definition of cost plus is in part II.

We look forward to and appreciate your comments.

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Procurement is a science. Retail procurement needs to be an exact science.

Monday, May 7th, 2018

 

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

I was talking to a meat buyer recently and it sounded more like talking to a commodity trader. In fact, that is exactly what they are. Data is important, and the breadth of data they need to watch is amazing.

Without getting into detailed spend management, strategic sourcing or analytics, a very simple example of what a retail meat buyer goes through every day should shed some light on the need for talent in the sourcing area.

Consider the following nine questions that a meat buyer might have to consider every day.

1.?What is my companies demand for beef products?
2.?What is the price of corn?
3.?What is the price of diesel?
4.?What is the price of plastic?
5.?What is the price of paper?
6.?What is the price of ink?
7.?How do all of these products or interact to impact the price of beef?
8.?How do I keep track of all these moving parts and what if I don?t?
9.?Is there an index for each of these I should be watching?

That sounds like a commodity trader to me.

One place a meat buyer might turn for help is to their e-procurement solution provider and if they already have a partner and these questions have never come up, maybe it?s time to change solution providers.

If you’d like to learn more about the resources we use at SafeSourcing when developing the strategy for our customers e-procurement events, please contact a SafeSourcing customer services account manager.

We look forward to and appreciate your comments.

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RETAILERS! Clean out those back rooms and move your overstock items using a forward auction.

Friday, May 4th, 2018

 

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

Why is it that we never hear of retailers running forward auctions? There are dozens of sources waiting to buy your overstock which all retailers know will reduce shrink and improve bottom line profitability.

If you go to any internet search engine and type in the term overstock, the data returned is in the millions of pages. Many of these links are locations? for Business to Business (B2B) and Business to Consumer (B2C) companies that will gladly agree to participate in e-negotiation events in the form of a forward auction to purchase your overstock or liquidated products for resale through their on line offerings.

Online forward auctions are an ideal way to get the best price for capital equipment, materials, overstock and services you may want to sell, such as when you need to liquidate excess inventory.

There are two basic types of forward auctions. The first is a liquidation auction where sellers are reducing inventory from overstock or liquidation and buyers are seeking to obtain the lowest price for items they have an interest in for resale and other purposes. The second type is more of a marketing auction where sellers are trying to sell unique items and buyers wish to obtain unique items. This is typical of an eBay type of offering.

Much of retail shrink happens in the back room or receiving area of retail stores. It just so happens that this is also the location of much of the overstock in the retail community. Much of this product sits there month after month resulting in significant margin hits to quarterly and annual earnings and as such to a company?s stock price.

Ask your e-negotiation solution provider how they can help reduce your overstock and shrink with forward auction tools, and who they would invite as buyers. You company stakeholders will applaud your efforts.

For immediate help, please contact a SafeSourcing Customer Services Account Manager.

We look forward to and appreciate your comments.
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Sourcing Music

Tuesday, April 24th, 2018

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

There isn?t an organization on earth that doesn?t use music for its business in some capacity.?Offices without any background?music are?awkward, phone lines without hold music makes customers think no one is actually holding for them, and video marketing is incomplete without song. Even though you may feel that the latest hit would be a perfect fit for your multimedia needs, without following the right procedures you could be on the hook for damages much larger than the actual licensing fees. But where do you start?

The rights to any musical composition?s distribution are typically managed by the publishing company under what are known as ?mechanical licenses?.?Sometimes the rights can be released directly by the copyright holder, but typically only under special circumstances such as when the request comes from a source with strong cross-promotional influence, or a friend of the artist themselves.?The major Performing Rights Organizations?(PROs) are ASCAP, BMI and SESAC. All commercial artists will be affiliated with one or the other organization. However, obtaining a license to use the music of one organization does not give you legal access to the libraries of all three?PROs.?There are, however, several third party companies who have licensing agreements with the PROs, and will grant access to specific works within their libraries for a fee.?If you need to be able to customize how you use the creative work, such as by editing a song to fit within a TV commercial or radio jingle, obtaining licensing through a third party is usually the easiest way to go. However, if all you need is elevator music, obtaining licenses specific to your organization is probably unnecessary.

Typically, the best route for a company to take is to purchase systems with pre-existing music libraries already integrated. For example, many VOIP providers either have their own content created exclusively for their organization, or have purchased rights to creative works themselves. This places the burden of working through the licensing issues on the service provider you are using. However, if you want to make sure your service provider is compliant, you should ask for documentation?proving compliance with current copyright laws identifying the corresponding PRO.

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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What POS System is Best for Your Business?

Friday, April 20th, 2018

 

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

Changing out a Point of Sale System is not something that a retailer can take lightly. ?This is a very daunting task and takes a lot of pre-planning. ?Since most retailers are open 7 days a week, there cannot be any or little down time when the transition takes place. ?This means that there must be a lot of research and a good team in place to make a successful transition. ?Researching all of the components can also be very time consuming. ?There are a lot of suppliers that offer excellent solutions that will meet your needs. ?Most of the suppliers offer POS systems that include both hardware and software solutions that will help streamline the transaction process. ?When doing your research, you must first know what hardware that you will need and the amount of stress that will be put upon it. ?Some systems are built to last extreme usage and temperatures?where others are not.??It is also important to know all of the components that you will need. ?For example, barcode scanners, register screens, payment terminals, cash drawers, and receipt printers. ?When choosing a POS system, there are many other things to consider as well. ?Below is a list of some things to keep in mind.

  • How many transactions do?we?average?on a given day?
  • How many lanes need to be supported?
  • Are we planning on expanding in the near future?
  • What type of payments do we accept?
  • Does my environment cause the need for more durable equipment?
  • Do we support mobile transactions?
  • Do we need to have multiple locations linked together?
  • Do we need to synch data with other applications?

If you would like some help finding the right solution,?we can gather all the necessary information for you and help you decide?which device will?meet 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.

We look forward to your comments.

 

 

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