Archive for the ‘Strategic Sourcing’ Category

Understanding International Freight Terms

Friday, October 4th, 2019

 

Today’s post is from our SafeSourcing Archives

Freight Terms: The world’s least sexy topic, second only to App Store terms and conditions. However, if you and your buyer/seller have a completely different understanding of how and when your goods are getting from point A to point B, where ownership is taken over, or what fees are included and which aren’t for example, the results can be disastrous. Sometimes even dangerous, depending on how vital the products you are moving are to their recipients, in the case of medical supplies for example.

The major international freight terms have been standardized by the international chamber of congress, into a set of rules designated as INCOTERMS®. These terms went into effect in 2011, most of which have 3 letter designations, and are regularly updated. More of these terms and additional details can be found at www.export.gov.

Here are a few of the more commonly used international freight terms which understanding can make your life a lot easier. The last two terms are not considered INCOTERMS®, however are common practices important to understand:

DDP: Delivery Duty Paid

(Port or destination must be named) This term signifies that the price invoiced includes all freight, insurance, duties, and taxes up to the agreed upon destination point. After which point the buyer takes on all ownership and risk.

DES: Delivered Ex Ship

(Port and ship must be named) In this instance, the seller bears all costs associated to getting the product to the port identified, but their obligations are fulfilled at the point of arrival, and the buyer takes on ownership and responsibility before it leaves ship.

Importer Of Record

Identifies the entity responsible for ensuring legal compliance, completing duty entry and associated documents, and paying the taxes and import duties for those goods.

B/L: Bill of Lading:

This document, issued by the carrier, acts as the contract for carriage, as well as the buyers proof of ownership and receipt for accepting delivery. This document often includes the freight costs, item list, date of departure and arrival, departure and arrival locations, and the names of the buyer and seller.

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.

 

 

CIO Applications Magazine Honors SafeSourcing

Monday, September 30th, 2019

 

SafeSourcing Inc., a leading eProcurement company offering a complete Procure to Pay suite of applications, has been recognized as one of the World‘s top auction application companies by CIO magazine.

CIO magazine has listed SafeSourcing, Inc. as one of the top ten auction platforms in its recent magazine edition. The article recognizes SafeSourcing as being a one-stop e-procurement and sourcing center, striking a balance of quality, affordability, product, and service.

“A strategic sourcing firm, SafeSourcing is at the forefront of offering a full suite of procure-to-pay tools under the SafeSourceIt™ banner which helps in reducing costs and improving efficiency” ~CIO magazine

CIO sat down with SafeSourcing CEO, Ronald D. Southard, to discuss the company’s value proposition, solutions, customer base, and future plans. In addition, the featured article elaborates on how SafeSourcing plays a role in e-procurement and how it accelerates efficiency and innovation.

SafeSourcing, Inc. provides cost effective tools under the SafeSourceIt™ product family that allows companies to dramatically reduce cost of goods, capital spending, and expenses in a timely manner while also reinforcing environmental and product safety programs. Focus is placed on a company’s entire spend for all products and services.

SafeSourcing’s early stage client engagement is specifically focused on cost reduction through the use of a white glove service based  on a detailed six step process using the SafeSourceIt™ e-RFX application suite.

Please visit www.safesourcing.com in order to  learn more.

 

Twelve areas to consider in your spend analysis if you don’t want to lose your hard earned savings.

Tuesday, August 27th, 2019

 

Todays post is a favorite from the SafeSourcing Archive

This is actually a great questions and a tough one to answer if in fact it has not been planned for during the strategy process. We all know that there are all sorts of saving figures quoted in the e-procurement industry for just about any product or service available.

Here are 12 areas of focus to consider when trying to figure out not only your ROI on these projects, but more importantly how much of the savings made their way to the bottom line and what is your leakage percentage.

1. How clean was your GL data?
2. How clean were your specifications?
3. How long did it take you to award the business?
4. How long did it take you to test samples?
5. How long did it take you to sign a contract?
6. How long did it take you to accept your first delivery?
7. Was the first invoice for the exact price you contracted for?
8. Was the shipping and handling exactly as bid?
9. Were there any SOW change requests that raised pricing?
10. What P&L period are you reporting against?
11. What was the budget for this product or service?
12. Can you trace the spend to a specific P&L line item?

It would not be too hard to add another dozen items to this list. The answer here is that proper planning helps eliminate savings leakage. Don’t plan and it will hurt or erode some or all of your potential savings.

We look forward to and appreciate your comments.

Retail spend management basics.

Monday, July 15th, 2019

 

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

No you do not!

A major step to trying to understand where to spend your effort when building an e-RFX attack plan is to understand the detail of your company’s P&L and how it can provide clues as to where you might have the most impact.

I meet with buyers or other e-procurement knowledge workers on a regular basis that want to know what categories are the best to select in the short term to prove the benefit of  e-negotiation tools. This quite honestly is not a bad approach for pilot selection as it creates an almost sure thing that results in a lot of excitement and the energy to move the process forward within a company.

Quite often before meeting with a new client, I will analyze their annual report and their summary and detailed P&L if available in order to get a good idea as to where the opportunities are hiding that can have an immediate impact. However in order to have long term viability as a way to conduct the business of buying, a more detailed analysis is required. Quite frankly before you can even begin to discuss vendor or supplier selection, management or evaluation this process is critical.

Key data required to prepare you for this analysis can consist of but is certainly not limited to the following. All of this data is readily available from a variety of industry sources. Quite often the data is a year old but you can bet it is better than anything else your customer may be using today.

1. Research and accumulate your specific Industry data
2. Analyze last years P&L
3. Compare your cost of goods with your Industries averages
4. Compare your gross margins with your Industry averages
5. Compare your net earnings with your industry averages
6. Conduct the same comparisons with selected retailers with whom you compete. Pretty easy if they are public.
7. Compare your departmental sales and margin results to those of your specific industry.
8. Look for department level anomalies.
9. Look for specific product anomalies within major and sub departments.
10.Select top categories that are below plan and outside industry average for cost of goods and margin.
11.Select top products that are underperforming to industry averages and plan

One example of the above might be to look at the grocery department sub category of pet care. Now drill down to the sub category of cat and dog products and a list of all accessories. Now look at what products are underperforming to the industry and plan. Continue your analysis with other underperforming categories.

In summary, did you need a spend cube to try and figure this out? No you did not. You needed someone that understands your industry and your P&L with some analytical common sense.

If you’d like to learn how these techniques can assist you, please contact a SafeSourcing customer services account manager.

As always, we look forward to and appreciate your comments.

Reverse Supply Chain Management or Reverse Logistics!

Friday, July 12th, 2019

 

Today’s re-post is from our SafeSourcing Archives.

We’ve spent years perfecting how to get “stuff” from in the dirt where we found it, make it more useful, and put it into consumers hands. This is called “logistics”. But now we’re faced with the task of figuring out how to do the opposite, without destroying the planet we got it from.

Enter Reverse Supply Chain Management (RSCM) or “Reverse Logistics as it’s sometimes called. The short definition of RSCM is to capture value from end of life products, and to take them backwards into the supply chain and/or reintroduce them into the biosphere/technosphere through a sustainable and profitable system. This can include activities such as reacquiring ownership of used products from the end user back to the manufacturer or reseller, transportation of used products for sorting, evaluation and designation of products for their most profitable use, remanufacturing or refurbishing, creating secondary markets for reclaimed products, recycling back to base components and responsible disposal.

One example of RSCM is the relatively new business of “Deconstruction”. In this process buildings are taken apart based upon material component value. These materials are either re-used in new construction, recycled into raw materials, or disposed of through environmentally sustainable means. Total annual building materials (C&D debris) disposed of in landfills in the US each year is not tracked by the EPA, but estimates range between 170 and 600 million tons disposed of in landfills currently, typically with only certain metals ever being collected and recycled from the debris. Organizations pioneering this field can be found at http://www.bignyc.org/, http://www.lifecyclebuilding.org/, and www.bmra.org.

Another example of businesses capturing value from RSCM is Dupont, which achieved zero-landfill status at one of their facilities that allowed them to realize $2.2 million in revenue in 2011 from the sale of waste by-products, and $400,000 in cost avoidance (http://www2.dupont.com/inclusive-innovations/en-us/gss/sustainability/employee-engagement/landfill.html). Similarly Subaru, GM, Honda, and Burt’s Bee’s have captured additional revenue or cost avoidance by repurposing waste through reverse logistical processes (http://www.greenmanufacturer.net/article/facilities/manufacturers-gone-zero-landfill).

The challenge is that reversing the supply chain for products that have been modified in an infinite number of ways over their usage life is exponentially more complex than taking virgin material to end consumer product. The premise to that problem however, should be that not engaging this process now while it’s optional, only makes what will certainly become a necessity more complex the longer it’s postponed, and presents a large opportunity cost every year potential new savings/revenue is not captured.

We at SafeSourcing have a knack for finding markets and cost avoidance opportunities that most don’t aren’t even aware exist. 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.

Sourcing Project Fingerprints

Friday, June 28th, 2019

 

Today’s post is from our  SafeSourcing Archives

The day we are born we all get a set of identifying marks that make us unique; our fingerprints.  Not one us have the same set of fingerprints and so they have become one of the things that identify who we are to the rest of the world.

In much the same way our physical fingerprints identify us, how we approach and handle tasks in our everyday lives have characteristics similar to our fingerprints that identify us as the ones involved with those tasks; how we write; how we speak; how we lead; how we organize; how we communicate.  Each of us puts “fingerprints” on our work that identify us as being involved with a project.  Let’s look at a few areas to help you determine what fingerprints you are leaving behind.

Research – Every sourcing project begins with the research.  Research includes understanding what you are buying, how much you are buying, who you are currently buying that product from and who else sells that product that you could buy it from.  The diligence you show in digging up the documents, emails, contracts, potential new vendors leaves your fingerprint on a project a major way.

Tool use – Tools range from pencil & paper to Excel spreadsheets to fullblown eSourcing solutions that intelligently help you organize the procurement process.  Knowing what tools you have at your disposal and how to use them can mark a project with your involvement.  Also, knowing when the tools you have aren’t sufficient is equally important.

Organization – Knowing all of the details does no good unless the organization of a project is done well.  Great procurement professionals can assess a project; determine who needs to be involved; determine what each phase of the project should be and who should be brought in to assist with each step of the process.  Knowing what to expect and organizing appropriately can be the difference between a successful project and one that fails to meet expectations.

Communication – Communication is tightly connected with organization.  Without effective communication among all parties involved in the organized project, including what the expectations of each member are, many projects fail before they ever begin.

Desire – The wild card to the fingerprint you leave on a project is desire.  Desire can originate from many different sources but the goal is always the same; completing a successful project in the time it was expected to happen.  Among each of the five components mentioned here, desire will mark projects as yours and will many times be the difference-maker in a project being completed correctly and in a timely manner.  When you strongly care about a project being successful, the majority of the time it will be.

For more information on SafeSourcing or how you can leave better fingerprints on your sourcing projects, please contact a SafeSourcing Customer Service Representative.

We look forward to your comments.

Freight Tendering 101

Wednesday, June 26th, 2019

 

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.

Concepts of Creative Problem Solving!

Thursday, June 13th, 2019

 

Today’s post is from our  SafeSourcing Archives

Have you ever faced a business problem that you just couldn’t find an answer to? Or have you thought something isn’t working as well as it should but you were unable to think of a better alternative? Here are two concepts to help you get past your creative barriers:

1.  Assume you can’t do things the way you currently do.Take a goal or core competency of your business, and figure out how you would accomplish this goal if the only way you COULDN’T do it, is the way it’s being done now. You may find your ideas taking you places that were obvious but never brought up before, simply because of your bias toward the familiar. If you can’t think of new activities you CAN do, assume what you’re doing NOW is off the table, which then opens up everything else for you to consider as a possible solution.

2.  Expand the Realm of Possibility Through New Associations.Look into how other systems solve similar problems.  I often find it helpful to think of data communication in terms of signal path from my audio engineering days. There have been buildings whose ventilation problems were solved mimicking termite mounds, adhesives inspired by anemone, virtual workspaces inspired by physical workspaces, etc. Many experts agree that the cross pollination of traditionally unrelated ideas is the greatest single reason why Silicon Valley has been such a successful hub of innovation. Simply surrounding yourself with new informational inputs will get your brain to access new physical areas that allow more transparent interconnection between concepts.

At SafeSourcing we deal with an enormously wide range of procurement projects. Sometimes concepts we originated in waste removal help us streamline projects for shipping, or we’ll learn something about Hotel Stays that give us insight into Janitorial Services. There really is no limit to the variety of ways our experience can help you find solutions for your procurement needs.

How do you push past your own problem solving “writers block”? Share your tips in the comments section below!

Thanks.

Fail Quickly!

Wednesday, June 5th, 2019

 

Today’s post is from our SafeSourcing Archives.

Those of us who are too afraid to fail, inherently play things safe. Those of us who play it safe, don’t set “unachievable” goals.  Those of us who don’t set “unachievable” goals, don’t rethink our mental models of what is possible for achieving success.

Of course, no one will say failure doesn’t hurt. However, it doesn’t have to be crippling, if we approach it correctly. In weightlifting we have to allow the uncomfortable microscopic tears in our muscle fibers to occur before those cells can rebuild bigger and stronger. In our personal lives, it we have to be challenged and tested, and shown where our blind spots are before our character can be improved. In business, sometimes we need to surpass our own expectations of what is possible, and test that with both success and failure, before we will know what we or our organization is truly capable of.

Nathan, my second youngest brother, is more of a risk taker than I am, and I suspect there’s a lot I could learn from him. He’s traveled extensively, goes sky diving, purposely seeks out random strangers in public to sit and have lunch with, and generally is always trying new things that I’d rather not.  But he has a method about it; If the only reason he doesn’t want to take a risk is apathy, he takes it anyway. However, if the risk is so great that failure would be unrecoverable, he doesn’t go through with it. He has a lower and upper threshold for the risks he takes, so that he’s never too inactive, but also never betting more that he can afford to lose.

The point of failing quickly is not to take on gargantuan risks. In other words, we don’t go out and bet the farm just to prove a point. There are foolish ways of taking on excessive risk of course.

The point of failing quickly is to expand our self-imposed limitations of what is possible within the proving grounds of activity that we can quickly recover from should the experiment be a failure.

Please contact SafeSourcing if you’d like to discuss how this strategy can help your sourcing projects.

We look forward to and appreciate your comments.

If you are not sourcing your services with eProcurement tools you are missing the boat!

Wednesday, May 8th, 2019

 

Today’s post is by Ron Southard, CEO at SafeSourcing

Professional services represent one of the fastest growing procurement areas for thousands of companies. The reason for this growth includes reductions in staff, efficiencies through outsourcing non-core competencies such as IT, and cost reductions for service on demand versus full time internal resources.

SafeSourcing has completed hundreds of professional services sourcing events resulting in the following overall statistics:

Number of Service Providers Invited:  5 to 9
Average Suppliers Participating:  6
Project Timeframe:  < 30 Days
Average Savings:  24%

Here is a list of 25 of the more popular services sourced using our eprocurement tools!

1. Employee Automobile Reimbursement Plan
2. Accounts Payable Recovery
3. Event Planning Services by Location
4. Armored Cars Services
5. Audio Conferencing
6. B2B Payment Solutions
7. Background Screening Services
8. Customer Satisfaction Program Provider
9. Customer Satisfaction Program Provider
10. Customer Statement
11. Disaster Response (Emergency Cleanup)
12. Event Services
13. Facilities Asset Management
14. Temp Labor
15. Jet Charters
16. Legal Services
17. Managed Print Services
18. Payroll Services
19. Recycling
20.Waste Management Services
21.Lawn Care Services
22.Snow Removal Services
23.Environmental Services
24.Construction Services (General Contractor)
25.Logistics

If you’d like to learn more about how to reduce your current costs for services or get a savings estimate on a specific services category, please reach out to a SafeSourcing Customer Services Associate.

We look forward to and appreciate your comments.