Archive for the ‘Strategic Sourcing’ Category

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.

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

 

 

Are you having problems with your inventories?

Wednesday, November 10th, 2021

 

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

What issues are you having with you inventory?

We hear a variety of issues/excuses every day of the week.

  1. Cannot get the items you want even if they are on order
  2. Cannot figure out acceptable substitutes for items you cannot get
  3. Cannot find a new or additional sources of supply to make up the difference.
  4. Stuck in a sole source environment.
  5. Not sure of what inventory you should commit to post pandemic.
  6. Not enough workers available to manage incoming inventory or returns.
  7. Do not want to tie up too much capital on potentially excess inventory.
  8. To many yet unknown supply chain issues to deal with!
  9. Not structured properly to decentralize inventory.
  10. No collaboration program with other companies that may have inventory to share.

I could add another ten issues right of the top of my head! Why? Because we hear it every single day from every single customer as well as every single supplier. Many retail customers do not have products to fill orders and many suppliers do not have product capacity to bid on new business.

There are creative ways to work around these situations. They may not fix all your issues, but they well may fix or solve many of them and keep customers from looking elsewhere.

Is it secret sauce you might ask? In some sense yes, because companies like SafeSourcing, a SaaS based sourcing platform for all categories know where alternative sources of supply are because we deal with more of them than you do on a regular basis. We also must produce temporary solutions for the current situation of which you may not think.

I am however not going to share any detail with you. If you think I addressed some of your issues, please contact a SafeSourcing customer services representative and we can talk. We might save your people invaluable time that can be used in other areas. If you would like to speak with me directly, Contact SafeSourcing and they will transfer the call.

Best of Luck!

Sourcing Project Fingerprints

Tuesday, October 26th, 2021

 

Todays 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.

Prices going up or cannot get enough Product to satisfy demand?

Wednesday, September 29th, 2021

 

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

If used properly a large supplier database like SafeSourceIt™ Global Supplier Database provides companies with   readily accessible data that supports growing their spend with e-procurement tools

Companies should have continuing success when running prior e-procurement events over again, one area of commonality that has historically made this difficult is a lack of new sources of supply.

There is a proper way to ensure the sustainability of your eSourcing events such as RFI’s RFP’s and RFQ’s or Reverse auctions going forward. Since you have already conducted or should have conducted a detailed discovery the 1st time around a robust supplier database like the SafeSourceIt™ Global Supplier Database Query Tool with over 500,000 supplier companies will allow you to do the following based on up to date vetted data.

  • Conduct a detailed supplier discovery
    • Rank the suppliers
    • By Size
    • By Experience
    • By References
    • By Environmental certifications
    • By Safety Certifications
    • By Location
  • Develop a three-year supplier game plan
    • Identify suppliers for each category over the sourcing horizon
    • Develop a three-year supplier rotation bidding schedule
  • Ask the following questions
    • What suppliers will I invite and why
    • Keep in mind the unique benefits of distributors vs. manufacturers
    • Discuss potential award of business strategies

If you don’t have a reliable new source of supplier information and only use the same suppliers that you originally used to conduct your category sourcing events, don’t expect continuing savings as you really don’t have the appropriate leverage points. If you don’t know where to access this type of data, please contact SafeSourcing.

We look forward to and appreciate your comments.

 

This post is from a year ago! I know that your costs are going UP! And they still are!

Friday, September 24th, 2021

 

Today’s post is from Ron Southard, CEO at SafeSourcing Inc.

Its amazing to me that with all the increases in spending resulting and continuing  from COVID-19 Pandemic, some of which would have been classified as tail spend that companies continue to not use tools available to them that will help to keep these and other costs down. Please contact me personally if you’d like to discuss.

At SafeSourcing, we help buyers save considerably on costs by providing tools that enhance the ability to do business in a better, safer, smarter, more streamlined and cost-effective way. Our flexible service offerings and suite of e-procurement tools deliver savings that can be referenced that are greater than 10 times the cost of our services and often much higher. Our annualized savings across all customers and all categories over the last 24 months are greater than 24%. You can not do better on your own!

We can help Improve your profitability and increase your efficiency. Both areas that  should and can help during these stressful times.

Here’s what one of our customers had to say. “We would not be where we are with our Indirect Spend if it were not for SafeSourcing.” SR. VP FINANCE OF $20B DISTRIBUTION COMPANY.

If you’d like to discuss our risk free trial, please contact a SafeSourcing Customer Services professional.

We Wear the Masks

Monday, September 20th, 2021

Today’s post is written by Ivy Ray, Senior Procurement Specialist at SafeSourcing Inc.

We have gotten used to regular mask wearing while in an enclosed space with others, and it appears that we will be wearing them for a while longer than expected. I believe we have all heard numerous conflicting facts regarding mask wearing and their various levels of protection.

Most of us have been used to wearing a cloth mask, which is intended to trap respiratory droplets that are released when we talk, cough or sneeze, and provides a barrier to protect us from inhaling droplets released by others.  The most effective cloths masks are made of multiple layers of tightly woven fabric like cotton. A mask with layers will stop more droplets from getting through your mask or escaping from it.

The more commonly available surgical face masks are generally graded through ASTM (American Society for Testing and Materials), but not all masks are graded. You need to make sure that you are purchasing a mask that is graded by the ASTM and it is from a reputable manufacturer. It will have the ASTM level printed on the box and are rated numerically.

  • Level One: Low barrier protection. Only for general use, not used for aerosols, spray or fluids.
  • Level Two: Moderate barrier protection. Use for low to moderate levels of aerosols, spray and/or fluids.
  • Level Three: Maximum barrier protection. Use for high risk of fluid, spray and/or fluids.

Masks are tested to five key performance criteria, bacterial filtration, particulate filtration, fluid resistance, breathability, and flammability. The more resistance it provides, the higher the grade. Surgical masks are loose fitting and do not provide a reliable level of protection from inhaling smaller airborne particles and is not considered respiratory protection because leakage can occur around the edges of the mask.

A respirator mask is designed to reduce the risk of inhaling hazardous airborne particles, gases, or vapors. These are graded by The National Institute for Occupational Safety and Health (NIOSH). The most commonly used respirator is the surgical N95, which has been tested to filter out at least 95% of airborne particles, and must be fit-tested for each individual to ensure proper protection.

Although the availability of surgical and respirator masks have improved, there is still a limited supply.  Let SafeSourcing help you source the right masks from a reputable manufacturer.  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.

We look forward to your comments.

 

Fail Quickly!

Tuesday, August 31st, 2021

 

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.