Archive for the ‘Strategic Sourcing’ Category

Time versus Effort

Monday, March 13th, 2017

 

Today’s post is by Rob Rice, Account Manager at SafeSourcing Inc.

This may not seem to be a big deal, but I’ve been told on many occasions and in different scenarios, “make sure you have the right tool for the right job.” Believe it or not, but on Ace Hardware’s website, there are 57 choices of hammers and that’s just from the Ace line.

My point is there are a lot of choices out there when deciding how you will purchase goods and services for your company. It is not as simple as one might think. For example; you need a cleaning crew for your office. Simple enough, google cleaning crews, call 3 or 4 of them and compare prices and go with the most economical, right…..not so fast. Did you take in account if they are bonded, green conscience, the type of chemicals they use, did they conduct background checks on the workers, what type of reputation do they have and can they provide references? These are some of the questions you need to have answered. Now here’s the big question, do you have the time?

Time is the real monster that rears its ugly head. How much time and effort are you willing to commit to ensure you get the quality of service and supply that will meet, if not exceed the standards set by your CEO? In my experience, one “simple” procurement can consume a day or days which caused me to fall behind on more serious issues, projects or other purchasing needs. This can lead to frustration and a huge waste of valuable time. Unfortunately, you may skip some or all of the vetting process and just hope it all works out. 

If you don’t have the time, that means either two things; hire more people, or find a company with the expertise, technology and dedicated staff to assist you with your purchasing needs. E-procurement tools can assist and enhance the way you do purchasing all the while saving money and time. SafeSourcing is just that company, an e-procurement company offering a complete procure-to-play suite of applications, a dedicated staff and access to over 450K global suppliers.

It boils down to, how much time you can afford versus getting the supply and/or service in a timely fashion and under budget. 

Robert or any member of the experienced team at SafeSourcing would be happy to discuss how SafeSourcing can help you with your eProcurement planning. For more information, please contact SafeSourcing.  

We look forward to your comments.  

 

 

Taking the proper time to prepare for your sourcing projects. The story of Ray and John!

Thursday, March 9th, 2017

 

Today’s post is from our SafeSourcing Archives

This blog series details the story or Ray and John.  Ray and John are both procurement professionals who work for multi-billion dollar food manufacturers.  Both Ray and John have corrugated containerboard contracts that are about to expire and with a predicted rise in the pulp market, both professionals are looking to renegotiate their contracts in order to lock in the hopefully current lower prices.  Ray and John, however, took different paths in order to get this category sourced and, as expected, their results reflected their differing preparation time.

Over the course of this week we will be looking at five areas that Ray and John approached differently and how those decisions and time investment affected their final results.  These areas are:

•  Understanding the market

•  Understanding the suppliers

•  Understanding their own company

•  Understanding their goals

•  Understanding and interpreting the results

When Ray and John began reviewing the containerboard project each began with a similar set of information.  They knew how much they were spending and the locations the containerboard was being shipped to.  They had each received some feedback from the field relative to the quality and customer service of the incumbent vendors (of which each had multiple) and they had some part number information from the past invoices.

Ray jumped right in and began to reach out to the suppliers to coordinate meetings on renegotiating the upcoming contract pricing structure.  Ray had seen in one of his trade journals that the pulp index was on the rise and knew enough to know that he wanted to lock in prices before those increases started taking effect.  Outside of that information Ray really did not take any additional time  in order to research the market in order to try and understand what experts were saying about the trend over the next few years and any changes that were happening with technology or safety that may affect his company.

John had already been keeping up with the market for the past year and had been speaking to professionals about their opinion of where the industry was headed.  He had attended two online webinars and at the last industry trade show he made sure to make appointments with two different containerboard companies he had spoken with who were also going to be at the show.  Through his efforts he had learned of a new technology that was coming that was going to drastically affect the costs of production of containerboard.  While the technology was new it was a key point he would be discussing with his incumbents relative to their understanding of it and their plans to potentially implement it within their facilities.

John also found out that there were three leading experts that felt that the increases that were coming in early 2013 would hold there for a while and be the last ones expected for a while.  This was great information because John now knew that when it came time to negotiate his new contracts that he would structure the language surrounding Index related price changes slightly differently because of that.

John’s process involved an intentional commitment to category education throughout the year and some additional time for research up front than Ray’s approach. As such John started his project fully prepared with an understanding of the status of the market before ever reaching out to a supplier.

Stay tuned the rest of the week as the story of Ray and John unfolds.  You may be like Ray but desperately want to operate like John but without the staff or the time to dedicate at that level.

At SafeSourcing we understand Ray’s frustration and that is why our customer services team works with you to achieve great results while removing much of the work from your plate.  For more information on how we can help you with your sourcing projects, 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.

Retail spend management basics.

Friday, February 10th, 2017

 

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.

Here are twenty-one reasons why all retailers should use E-Procurement tools.

Wednesday, February 8th, 2017

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

Since this is not Late Night with David Letterman, our list is not ranked in order of importance although many might argue that not much is more important than improved earnings.

1. Guaranteed to improve net earnings
2. Guaranteed to improve safety
3. Guaranteed to improve Corporate Social Responsibility.
4. Guaranteed new sources of supply
5. Retail has less spend assigned than any other industry
6. Streamlines the  procurement process
7. Holds suppliers accountable to your standards.
8. Improves quality
9. Cost avoidance in a volatile market
10. Creates a competitive environment
11. Drives reliable market pricing
12. Maintains a reliable history for future comparison
13. Educates suppliers as to how retailers wish to procure products
14. Supplier training eliminates questions
15. Improved and consistent product specifications
16. Improved negotiation.
17. Improve carbon footprint
18. Simple award of business process
19. Frees up time for other tasks
20. Works for procurement of all product categories
21. Provides a detailed audit trail.

This author is not sure why a derivative of this list could not become the mission statement for any procurement department. if you’d like help working on your list, please contact a SafeSourcing Customer Services Account Manager.

We appreciate and look for ward to your comments.

Happy New Year 2017. This year’s strategic sourcing plan should already be in place

Tuesday, January 3rd, 2017

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.

How SafeSourcing Saved Christmas…

Friday, December 23rd, 2016

 

Today’s holiday repost is written by Heather Powell, Director Customer Services at SafeSourcing, Inc.

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.

You can procure anything, including Candy Canes Part IV!

Friday, December 16th, 2016

 

Today’s post is by Heather Powell, Director of Customer Services at SafeSourcing Inc.

What does it take to make a candy cane, package it, market it, and distribution? All of these involve procurement. Today, the candy cane makes up a significant amount of the $1.4 billion Christmas candy market. In fact, billions of candy canes are made and consumed each year.

We have learned the history of the candy cane in part 1 and what ingredients are needed to make candy canes and how to procure the raw ingredients in part 2, and yesterday we learned how to make a candy cane and package it. Today we will cover how to market your product and how SafeSourcing can help you.

How to market your candy canes?

There are multiple companies out there who will help you in your areas of packaging, production and marketing. These companies can handle all of these areas in house for you or you can hire each area out individually. As with purchasing or procuring anything it is best to do your research.

Typically using a company who serves all your needs in house will be the most cost effective, however it is still worth running a request for proposal to find out who they are, who their current clients are, areas of service they can provide, examples of product they have created, a prototype of an idea for your product, their solution on how to market your product, and a pricing model. Even with this helpful tool, it is still beneficial to interview the company.

An in house company should be able to provide at a minimum:

Brand management:
o Data Management
o Project Management
Printer
Color Lab
Artwork
Proofing
Prepress
Brand Protection

In addition to having the best product, best packaging, and best marketing you need to have the basic business 101 logic to selling your product according toan article in entrepreneur.com

Get the correct buyer: One of your biggest challenges is finding the right buyer within a large organization, so do your homework. If you’re experiencing roadblocks, consider hiring a distributor or manufacturer’s rep who already has established relationships in your industry.
Be prepared: Develop a presentation and have professional-looking sell sheets ready. Your product should also have packaging that’s ready to go.
Know your target: Understand what products they already carry and how yours will fit in. Don’t waste your time pitching to a retailer who’s unlikely to carry your product.
Take advantage of special programs: Some mass retailers, such as Wal-Mart, have local purchase programs that give managers authority to try local items. And other retailers may have different initiatives, such as minority business programs.
Be patient: It can take up to a year or longer before you see your product on store shelves, so don’t get frustrated. And if the final answer is no, try to turn it into a learning experience.

Finally, remember there are other sales channels besides the traditional brick-and-mortar retail store. Catalogs, TV shopping networks and online stores can also be excellent methods to enable you to learn how to market a product online.

SafeSourcing, Inc. can help you source your packaging, production, and prepress services, create and run a Request for Proposal and compress the suppliers pricing by running a Request for Quote. 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.

You can procure anything, including Candy Canes Part III!

Thursday, December 15th, 2016

 

Today’s post is by Heather Powell, Director of Customer Services at SafeSourcing Inc.

What does it take to make a candy cane, package it, market it, and distribution? All of these involve procurement. Today, the candy cane makes up a significant amount of the $1.4 billion Christmas candy market. In fact, billions of candy canes are made and consumed each year.

We have learned the history of the candy cane in part 1 and what ingredients are needed to make candy canes and how to procure the raw ingredients. Today we learn how to make a candy cane and package it.

How are candy canes manufactured and packaged from madehow.com

1. The first step of production involves blending the ingredients together in a large vessel. Typically, a stainless steel kettle is used that is equipped with automatic mixers. Ingredients can be poured or pumped into the batch by workers known as compounders. At this step, the water, sugar, corn syrup, and other processing ingredients are combined. They are then heated to over 300°F (141.5°C) and allowed to cook until they form amber liquid.
2. While it is still hot, the sugar mixture is poured on water-cooled tables. The candy cools slightly and is sent to the working machines. These devices are equipped with arms that stretch the candy repeatedly until it looks silky white.
3. While the candy is being stretched, a line worker adds the proper amount of flavoring. Also, coloring may be added at this point.
4. Another worker then takes a large portion (95 lb [43 kg]) of the warm candy and forms it into a loaf. Part of the loaf is put off to the side, dyed, and cut into strips. For the traditional candy cane, this portion is dyed red. It will become the red stripes in the final product. The 4 in-long (10 cm) red strips are then pressed at set intervals into the white loaf.
5. The loaf can then be sent to the extruder machines to convert it into a candy cane. The loaf passes through the extruder and comes out the other side on a conveyor as a long strand of candy. The strand runs under cutters that slice it at set intervals to produce individual candies. They are then passed through a device that bends the candy. Since the candy is still slightly warm it can still be shaped as desired. Some extruders can handle over 2,000 lb (907 kg) of candy an hour.
6. After the candy cane is formed, it is put into its packaging. Some manufacturers wrap the candy cane in a clear plastic. This is done right as it is exiting the extruder. The plastic is then wrapped around the candy cane and sealed by a heat sealer.
7. In most instances, a set amount of candy canes are collected and boxed in secondary packaging. These boxes are passed through a shrink-wrap machine and sealed. This extra layer of packaging ensures that no moisture damages the product. The boxes are then put into shipping containers, put on pallets, loaded on trucks, and delivered to stores around the country.

Quality control is an integral part of all candy production. The first phase of control begins with tests on the incoming ingredients. Prior to use, lab technicians test ingredients to ensure they meet company specifications. Sensory evaluations are done on characteristics such as appearance, color, odor, and flavor. Other physical and chemical characteristics may also be tested such as liquid viscosity, solid particle size, and moisture content. Manufacturers depend on these tests to ensure that the ingredients used will produce a consistent batch of candy canes.

The next phase of quality control is done on the candy cane paste. This includes pH, viscosity, appearance, and taste testing. During production, quality control technicians check physical aspects of the extruded candy. A comparison method is typically used. In this method, the newly made product is compared to an established standard. For example, the flavor of a randomly sampled candy cane may be compared to a standard candy cane produced at an early time. Some manufacturers employ professional sensory panelists. These people are specially trained to notice small differences in tactile, taste, and appearance properties. Instrumental tests that have been developed by the confectionery industry over the years may also be used.The process of making candy canes can be done on a much smaller level at home or in the instructions above on a large scale.

In the large scale, items to be purchased or procured would be the candy kettles, stainless steel tables, working machines, extruder, conveyors, cutters, plastic wrap machine, heat sealer, various types of cardboard, shipping containers, pallets and hand pallet jacks as well as fork lifts. In addition, you can procure hiring services of standard and seasonal workers, fork lift drivers and temporary delivery truck drivers, janitorial/sanitation workers, certified engineers and lab technicians and quality control supervisors.

SafeSourcing, Inc. can help you source your manufacturing goods and services, create and run a Request for Proposal and compress the suppliers pricing by running a Request for Quote. 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.

Tomorrow we will discuss how to market candy canes and how SafeSourcing can help in this area.

One or the other; Efficiency vs Effectiveness

Thursday, December 8th, 2016

 

Today’s post is by Steven Belvin, Account Manager at SafeSourcing

Many believe you must sacrifice effectiveness for better efficiency or vice versa. However, in the proper hands this could not be more wrong. As hard as it may seem there are ways to improve both at a company. BusinessDictionary.com defines Effectiveness as “The degree to which objectives are achieved and the extent to which targeted problems are solved. In contrast to efficiency, effectiveness is determined without reference to costs and, whereas efficiency means “doing the thing right,” effectiveness means “doing the right thing.” BusinessDictionary.com also defines efficiency as “The comparison of what is actually produced or performed with what can be achieved with the same consumption of resources (money, time, labor, etc.). It is an important factor in determination of productivity.” As you see from above effectiveness basically means doing the jobs that are assigned to you and handling any problems that may come up while working on those tasks. Whereas, efficiency basically means how fast you can correctly do your job or what resources can you utilize to help save time, money, material, or labor while completing the task. With this being said it is easy to assume that you must sacrifice one for the other.

However, believe it or not, some of the best ways to improve both is to slow down. Let me explain, the faster you move the more likely you are to mess up what you are working on and if you slow down too much you will not complete the task in the timeframe needed. This is why many companies like to utilize a Strategic Sourcing company like SafeSourcing as a resource. As I come to the end of my first month at SafeSourcing I realize I have been taught ways to improve both my effectiveness and efficiency. I have noticed the time it takes me to complete tasks is slowly starting to go down. It is easy to see why the SafeSourcing team can complete so many tasks in one day to ensure a quick turnaround of events with the highest ROI to the customer.

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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“What Is Efficiency?” BusinessDictionary.com. Business Dictionary, n.d. Web. 11 Nov. 2016.

“What Is Effectiveness?” BusinessDictionary.com. Business Dictionary, n.d. Web. 11 Nov. 2016.

The SafeSourcing Way

Tuesday, December 6th, 2016

 

Today’s post is by Jericia Stevens, Account Manager at SafeSourcing, Inc.

The Value of a Warm Welcome.

In a rapidly evolving world, are we losing the art of welcoming someone into a new situation? Is our culture too casual in the way we conduct business or form meaningful relationships? Have we taken for granted the meaningful notes and thoughtful extras that gives life meaning?

As of today, I’ve officially been employed at SafeSourcing for two weeks. As I reflect on the things that I learned over the last two weeks, it is only befitting to reflect on the warm welcome I felt on my first day; week. I walked into the office suite to notice a sign that read, “Welcome to SafeSourcing Inc. Jericia Stevens” sitting on the front desk.

SafeSourcing knows the value of a Welcome. We want to ensure that our customers feel welcomed while we manage their procurement needs.

Our procurement team works diligently to provide our customers with quality training and customer service. Our flexible service offerings and suite of e- procurement tools deliver the savings that can be referenced that are greater than 10 times the cost of our services.

We work closely together and make sure that we all have a role in providing our customers with the best value for their product and services.

I am glad to be a part of a company that knows the value of a welcome. Partner with us and experience The SafeSourcing Way. Let SafeSourcing manage your sourcing projects. 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.