Archive for the ‘Strategic Sourcing’ Category

Better Business Outcomes

Tuesday, April 23rd, 2019

 

Today’s post is from Alex Borbely, Vice President of Sales at SafeSourcing, Inc.

Over 30 million Americans don’t have access to modern broadband. The Federal Communications Commission announced that it would hold the biggest spectrum auction in U.S. history, aimed at bolstering 5G network deployment. The bidding will see roughly 3,400 megahertz across three spectrum bands auctioned off for commercial use. The auction is scheduled to start in December 2019 and may be the largest in the country’s history. The FCC also stated that there would be more auctions after this one. Three rounds of clock-phase bidding will be held each day at this stage in the auction. The clock auction format being with a “clock phase” that lets participants bid on generic blocks in each Partial Economic Area in successive bidding rounds, followed by an “assignment phase” that allows the winners of the generic blocks to bid for frequency-specific license assignments. Thirty-eight bidders qualified to participate in the auction.

In an auction, the activities are targeted towards researching/inviting suppliers and ensuring that any existing supplier has an opportunity to propose keener prices and better terms. The auction is usually held via e-procurement and has a number of activities concluding with a short time period with dynamic bidding ensuring the pricing moves rapidly downwards. This type of auction provides any number of advantages including:

  • Suppliers are encouraged to bid low and provide good terms in order to win the contract.
  • The process is seen as a fair way of awarding government contracts as well as those from large monopolistic companies.
  • It is a low cost, much quicker method of finding new suppliers.
  • Negotiation costs are almost zero.

SafeSourcing eProcurement, particularly reverse auctions, is a relatively new way to increase your bottom-line and enhance the spend process. Utilizing new technologies will add profit dollars without selling one new customer buying your products or services. The savings are traditionally 10X your investment in e-Procurement tools. You’re just accepting a different way to silicate bids/pricing even with your incumbent vendors that you currently work with.

For more information on how SafeSourcing can help in your procurement efforts, or on our Risk Free trial program, please contact a SafeSourcing Customer Service Representative

 

 

 

 

How to tell when you need to simplify your processes

Wednesday, April 10th, 2019

 

Today’s post is our archives at SafeSourcing

Finding the right balance of complexity in your processes is a tough thing to juggle for businesses large and small. I’ve worked in companies where you literally had to read through and comply with hundred page manuals for every email sent, phone call made, or lunch break taken. On the other end of the spectrum, were companies who had so little structure that no one had any idea what standard procedures were, roles were not identified, and whether or not you were performing well was determined more by the owner’s mood than any objective metric.

The problem is similar to the dilemma of Emergent vs. Deliberate strategy[1]. Each side of the argument carries its own merits; highly process oriented organizations are usually highly efficient, and low risk. The tradeoff however, is that adaptability and innovation suffers. The more flexible and open ended your process, and the more you give your team the authority to deviate from those processes, the more they are able to deal with crisis, unexpected changes, or to innovate in order to meet the needs of the business. So how do we determine if our organization is leaning too far in one direction?

A basic rule of thumb is:

If the cost of your process > the value of the process, you may need to re-balance.

This of course, requires that you have a correct understanding of the cost of all your processes.

Many businesses have a hard time wrapping their heads around the true process capacity of their workforce. Typically this results from not having an up to date or objective measurement of all processes rate of finite resource consumption. Do you have an accurate listing of every activity performed by each member of your team? Have you found averages for all costs of each of these activities, in time, money, and materials? Most likely each of your team positions specializes in a certain activity, and will be aware of activities associated with executing that position that no one else is. Performing this evaluation will identify your process capacity “budget” if you will. And of course, all things that consume finite resources must have a budget of that resource.

Once you have a clear and objective picture of your activity costs, you can evaluate the costs and value inherent in your processes. Do you have redundant processes that only add marginally increased value? Do you have processes so narrow in scope that a large number of activities get bypassed? Do you have activities whose execution is so sensitive that a miss-step would shut down your business? You may need to add processes or capabilities that eliminate these risks (For more on that topic, see my blog “Mistake-proofing your business”).

In summary:

  1. Objectively measure your organization’s process capacity
  2. Evaluate the cost to benefit balance of your processes
  3. Appropriately budget your process capacity to maximize overall value/decrease risk

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.

[1] “Balancing Deliberate vs. Emergent Strategy: SafeSourcing …” 2015. 15 Dec. 2015 <http://blog.safesourcing.com/2015/06/01/balancing-deliberate-vs-emergent-strategy/>

Super-chickens are bad leaders

Tuesday, April 2nd, 2019

 

Today’s post is from our  SafeSourcing Archives

In 2013, William Muir published a study on the social behavior of chickens[1] and measuring their productivity based on how the groups were configured. They thought that if they bred selecting for all the most productive chickens, putting those chickens into one group should only scale up that productivity into one “super-chicken” flock. To their surprise, they found that the “average” chicken flocks repeatedly out-produced the super-chicken flocks, because the latter group had pecked many of the other birds to death. The parallels in experiences between human and chicken team-building became immediately obvious, and so MIT started experimenting to try to understand how collective intelligence works, and can be optimized in humans[2].

Experiments were performed where individuals of varying intelligence profiles were put together in groups, and given an assortment of problems to solve as a group. What the researchers found was that individual intelligence or productivity was not the leading indicator of team success. The three traits associated with the best group performance were:

  • High ability to read other people’s emotions
  • Giving everyone a chance to talk, and
  • High number of women in the group

What they found with the groups of “super-stars” was that while intelligent/productive individuals may do well solving problems on their own, if they don’t have the social intelligence to interact with others well they will only bring the group performance down. This should be obvious for anyone who has had to work with team members that may look good on paper or to external management, but then internal to the group, is a terrible leader. Intelligence and raw talent are great attributes, but putting together the high-producers that don’t play nice with others can end up creating a team that pecks itself to death. There are online tests that measure your ability to read people’s facial expressions[3], and some experimental tests for measuring a team’s collective intelligence. But at the moment, the most effective and inexpensive test is seeing how teams perform together, and of course simply asking the team who they would follow, and who they feel “pecked” by. For all the experimental procedures with chickens confirming what we already intuitively know about human nature, it’s usually pretty easy to spot who inspires cooperation, and who inspires in-fighting just by asking around.

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.

 

[1] Grandin, Temple, and Mark J Deesing. Genetics and the behavior of domestic animals. Temple Grandin & Mark J Deesing. Academic press, 2013.

[2] “Measuring Collective Intelligence – MIT Center for Collective …” 2014. 15 Feb. 2016 <http://cci.mit.edu/mciresearchpage.html>

[3] “Reading the Mind in the Eyes Test – Question Writer Tracker.” 2013. 15 Feb. 2016 <https://www.questionwritertracker.com/quiz/61/Z4MK3TKB.html>

Information about Cyber Security Part II

Friday, March 22nd, 2019

 

 

Today’s post is by Ashley Riviello, Account Manager at SafeSourcing, Inc.

To recap fairly quickly with some key points from my blog last month, I stressed the importance of cyber security. We probably hear something or read something about breaches happening every day. In this blog, I would like to focus on the three main principles of cyber security: confidentiality, integrity, and availability. Before I explain each principle, understanding the role of cyber security is very important. Per Transunion, anything that relies on the internet for communication, or is connected to a computer, or other smart device can be affected by a breach in security. This includes, but is not limited to, government databases like social security numbers, educational systems like grades and reports cards and transportation systems like traffic control and airplane navigation systems. Any of these can be hacked or breached.

Again the three main principles behind cyber security: confidentiality, integrity and availability. Per Transunion here are their explanations for all three:

  • Confidentiality involves any information that is sensitive and should only be shared with a limited number of people. If your credit card information, for example, was shared with a few criminals, your credit rating and your reputation could suffer very quickly.
  • Integrity involves keeping information from being altered. When malware hits a hospital’s computer systems, it can scramble patient records, lab results and can prevent staff from accessing a patient’s allergy or drug information.
  • Availability involves ensuring those who rely on accurate information are able to access it. Availability is often related to integrity, but can also involve things like a cyber attack preventing people from accessing specific computers, or from accessing the internet.

Here are some tips to help protect you from hackers, viruses and malware:

  • If you receive an email that you do not recognize, do not open it. Certain links can cause your computer to be infected with a virus.
  • When you receive warnings on your computer that are unfamiliar to you, do not click on these. They are known as scareware. They also can cause your computer to become infected with a virus. These can be sent through email or can be pop ups on in your browser windows.
  • Always make sure you have the most updated antivirus and anti-malware.
  • Never give out any personal information to anyone that you do not know or websites that are unfamiliar to you. People can use it to hack your personal information and steal your bank info or any other personal info that you have.

I hope this at least helps one person be more aware of the information you put out there. Here at SafeSourcing, we take this very seriously and never give out any data or personal information with any of our clients or vendors that we work with on a daily basis.

For more information on how SafeSourcing can help in your procurement efforts, or on our Risk Free trial program, please contact a SafeSourcing Customer Service Representative. We have an entire team ready to assist you today.

 

 

 

How do you know if your Waste Management Programs are effective?

Tuesday, February 12th, 2019

 

Todays post is from our SafeSourcing Archives

On an old post that still has merit,  we presented a series of blogs about the Four R’s of Waste Management; Reduce, Reuse, Recycle and Rebuy, which went through the basics of each and how your company can take steps to becoming greener.  Today we will be focusing on how to measure the results of your programs for both accounting and PR purposes.

Tons of waste diverted from the landfill – By reusing and recycling products within your organization you are contributing to the reduction of tons of waste which is sent to landfills.  Your recycling partners many times can help track this metric with you.

Amount of disposal costs saved – Every company pays for the disposal of waste.  The less waste produced by your company the less frequently your waste disposal company has to pick up that waste which means lower costs for your company and an accounting bottom-line expense reduction.

Amount of purchase costs saved – Companies that focus on reusing and rebuying product can save millions of dollars when they do not have to purchase new products from vendors.  This is an important metric many companies use to measure the effectiveness of their programs.

Value of materials donated – In some cases the value generated by your waste management programs will be in the manner of credits that directly affect the company’s taxable income.  This is another key measurement factor especially in the recycling focused programs.

Revenues earned – Many programs lead to products that can be sold off to 3rd parties as used inventory.  Revenues earned is a metric with high visibility and importance to many companies’ executive level.

Jobs created or retained – In an economy where the country’s unemployment rate has been a much-watched indicator, many companies have integrated the number of jobs added or saved due to waste management programs into their corporate reporting.  Many times this metric is tied closely with revenues earned.

Families/individuals/organizations assisted – By donating or recycling products, businesses have the capability to help thousands of schools, families and other organizations with products they would have normally thrown away.  This applies frequently to technical products that the company may have outgrown but that still have useful lives.

These are just a few of KPI’s or metrics that you might use in order to report how effective your Four R programs are doing, both internally and externally.  For more information on the Four R’s  or companies that can help you with processes or programs relating to the Four R’s, please contact a SafeSourcing Customer Service Representative.

We look forward to your comments.

Happy New Year 2019. This year’s strategic sourcing plan should already be in place

Wednesday, January 2nd, 2019

 

What specific short term tactics will you deploy that support your plan and drive immediate and measureable results.

One example of the above might be to augment the manual processes that many  sourcing professionals use today in order to find new sources of supply interested in bidding for their business rather than continuing to live with the same small, known group of suppliers they have used for years. Historically this has been a very time consuming practice that results in few if any new sources of supply. This represents a great opportunity to deploy a tactic that can have an immediate impact for an organization without the need for the implementation of a complete new sourcing strategy.

There is a specific process to follow that will encourage new sources of supply to want to bid for a companies business beyond just being invited. Simply having your buyer assigned the task of picking up the phone and calling new sources of supply will not result in new suppliers agreeing to bid for your business. There are specific objections to overcome and questions to answer that require a specific skill set.  This is a perfect opportunity for Software as a Service providers that offer supplier research. Skilled providers in this area can provide companies with as many as a half dozen or more willing new sources of supply in as little as thirty minutes  that may in fact reside within a companies existing marketing  area.

Sourcing tactics can be isolated procurement related actions or events that take advantage of opportunities offered by the gaps within strategic plans such as lack of new sources of supply mentioned above.  So our tactic here would be to find additional sources of supply that we can invite to compete for a companies business in a variety of categories. The fact is that additional sources of supply competing for a companies business results in compressed pricing and often better quality products.

We appreciate and look forward to your comments.

Welcoming the New Year Resolutions Part I of V

Monday, December 31st, 2018

 

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.

Tactical and Strategic Sourcing

Wednesday, November 14th, 2018

 

Today’s post is from our SafeSourcing Inc Archives

Let’s define each one then note the differences. This will aid in better understanding how procurement professionals justify adopting one sourcing method or the other.

Strategic Sourcing

Strategic sourcing is a precise, long term approach to acquire supplies and or services for an organizations current need at the lowest total cost of ownership (TCO) and the lowest risk to the supply chain. This process creates a relationship between the customer and vendor that will ensure continuous improvement in quality, delivery, cost and service while providing the means to attain ideal proficiencies with both parties. There are three key components of strategic sourcing; spend analysis, market research and supplier evaluation and relationship management. These steps require a specifically trained staff using a specific software tool to achieve desired outcomes.

Tactical Sourcing

Tactical sourcing is a short term, transactional activity practiced in small to medium companies. This approach to purchasing goods and services uses quick quote and order processing to support the company’s production or needs. This approach does require management within the company to ensure the right material is purchased at the right price and at the right time. Unlike strategic sourcing, companies are not concerned with the vendor’s core capabilities or creating a long-term relationship.

So based on the two sourcing methods one might think that the strategic approach makes for best practices compared with the tactical method. So why do many companies choose the latter of the two.

Consider a small to medium sized company where purchasing has the ability to use just about any supplier that fits their need. Typically, buyers will use their own best judgement to find the right supply that meets both their pricing and best shipping dates. This is very common in companies that don’t have the luxury of time or technology to assist them from shifting form tactical to strategic purchasing. Their biggest concern is to keep things moving while keeping an eye on costs, hence why tactical sourcing makes the most sense.

Now compared this to a larger company where they could have a suite of ERP technology and a dedicated team of purchasers. They have the time and resources to properly vet suppliers, develop reports, perform a spend analysis, and conduct market research. With these capabilities, procurement can negotiate lowest total cost of ownership (TCO), taking into consideration, quality, price, delivery and lead times. These buyers will have a deeper understanding of the company’s overall needs and requirements. Taking a strategic sourcing approach makes the most sense in these cases.

Finding the best sourcing method for any size company should be a priority, yet time and time again, companies fail to implement any thoughtful process or policy costing them time and money. SafeSourcing, with its dedicated staff and E-procurement suite of tools could do just that. Lower your risk and increase savings without hiring additional staff or buying expensive software. It’s a win-win!

For more information on how SafeSourcing can assist you in exploring your procurement solutions for your business 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

Wednesday, October 10th, 2018

 

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.

Selective Exposure

Thursday, September 6th, 2018

 

 

Today’s post is our SafeSourcing Archives

Mark Zuckerberg once famously said “A squirrel dying in front of your house may be more relevant to your interests right now than people dying in Africa”. Along those same lines, Eric Schmidt of Google fame proclaimed “The power of individual targeting—the technology will be so good it will be very hard for people to watch or consume something that has not in some sense been tailored for them”. Often times statements like these disquiet our fears of artificial intelligence, or of Google powered robots taking over the world. But I think there’s a much bigger, and more immediate cost to what is being described above.

Have you ever noticed how many of the news feeds, search results, and advertisements that you don’t have a choice in seeing are often customized to your interests? What kind of long term effects do you think this will have on a society, especially one that is only getting more and more embedded into online networks of all types? Some believe it will necessarily lead to us only seeing the information we agree with, and that can be a dangerous thing.

This is why Eli Pariser, executive director of moveon.org, believes that opinions are becoming both more polarized, and more narrow minded. One way this problem seems to be manifesting itself is through the increasing polarization of opinions in topics ranging from global warming, gun control, ISIS, and vaccines. The claims of both sides of any argument seem to get more extreme and certain of their views, and rarely ever less. This is because the algorithms that review our history and populate our search results, also tailor our information feeds to what we want to see. But how then will we learn things we need to know, without being limited to the things we want to know?

Right now, the options are limited. All of your Facebook and Google results go through algorithms that customize their outputs to your activity. Google gives some tips for how to prevent that in PC browser searches by deactivating your history[1], but that option is not available for mobile browsing. Don’t forget, these companies are advertising revenue based, so they’re incentivized right off the bat to give you output that will sell ad space, which is more effective with personalized marketing. In this case, although there doesn’t seem to be a black and white answer, age old advice seems to be the most useful: Never stop learning, listen to opinions different than yours, be humble, and never assume you are right without considering the alternatives.

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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[1] “Search and browse privately – the Google Help Center.” 2014. 14 Dec. 2015 <https://support.google.com/websearch/answer/4540094?hl=en>