Archive for the ‘Strategic Sourcing’ Category

Managing Tail Spend

Wednesday, June 24th, 2020

 

 

Today’s post is by Dave Wenig, Senior Vice President of Sales and Services at SafeSourcing.

Along the same lines as my recent post about Procurement as a Service (PaaS), I thought I would focus on tail spend. Here again, the concept of managing tail spend isn’t new, but it has also been receiving more attention recently. I would argue tail spend is finally getting the attention it deserves.

I’ve often thought that tail spend is undervalued. I suspect the term tail spend gives the impression that the spend in the tail is insignificant. The reality is that the tail can be awfully long and represents a much larger percentage of overall spend than one might think.

To me, the ability to manage tail spend is essential. SafeSourcing’s approach to tail spend management starts with our SafeSpendAnalysis™ service to identify the categories and subcategories in which the spend can be found. Until you have gone through this process, it is easy to underestimate just how much purchasing is taking place on an annual basis that should be considered the tail. One-off purchases, rogue purchasing, and categories with many vendors providing the same thing are just a few of the common culprits. It’s all too easy for this type of spend to fly under the radar when an organization lacks a proper procurement policy and the ability to proactively manage against that policy.

Again, to SafeSourcing, the concept of managing this type of spend is nothing new. With our SaaS model and our tools and capabilities, we have been targeting tail spend for management and cost reduction since we started. Where others have marketing around this tail spend management, SafeSourcing has experience.

It’s really great to see the recent interest in tail spend and in controlling costs in general. Expense management is so critically important right now. The best strategy a company can have is one that considered their entire spend to be within the scope of their expense management initiatives and that includes the tail.

If you would like more information on how SafeSourcing can help you, please contact a SafeSourcing Customer Service representative.  We have an entire team ready to assist you today.

 

 

 

 

 

Procurement As A Service (PaaS)

Tuesday, June 16th, 2020

 

 

Today’s post is by Dave Wenig, Senior Vice President of Sales and Services at SafeSourcing.

In the past, we’ve talked repeatedly about how SafeSourcing delivers our services in a Software as a Service (SaaS) model. As a refresher, here is a post from 2014 that details our SaaS software suite. We also often talk about how we treat our SaaS offering as full-service and have done so for a long, long time. Here’s another quick read from 2017 talking about our full-service approach. The way we combine our tools with our expertise and the way we actually deliver the services to achieve our customers’ goals have pretty well always been what you might describe as procurement as a service (PaaS).

I mention this because it seems to me that I am hearing more and more about PaaS recently as if that is a new or emerging trend and it surprises me greatly. SafeSourcing has always operated as an extension of our customers’ own procurement capabilities in order to allow them to outsource much or all of their needs to us. We’re comfortable delivering against this model and we rarely operate outside of it.

The entire procurement process can be managed by SafeSourcing beginning with spend analysis. In all reality, the process never really ends because procurement is truly cyclical. There are other buzzwords as well and just like with PaaS, there will be a marketing campaign that will rise to the occasion. As a term like PaaS gains momentum, more and more companies will roll out their offering. While there isn’t anything wrong with that, it can make it harder to identify which companies are actually experienced in delivering a PaaS offering.

Anyone interested in offloading more of their procurement function should be careful to find a partner that can truly take on the load in a SaaS model. Many lack the expertise needed in their services teams to truly deliver on the wide variety of categories that need to be addressed. SafeSourcing has this expertise and delivers strongly in the as a service model. To be effective you really need a partner that has the people, the intellectual property, and the software to drive savings in an efficient outsourced model.

Procurement as a service isn’t a new concept and we like to think we’ve been doing this all along. Personally, I would be leery about choosing any provider that talks about PaaS like it’s a new concept. If you would like more information on how SafeSourcing can help you, please contact a SafeSourcing Customer Service representative.  We have an entire team ready to assist you today.

 

 

 

 

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

Wednesday, June 3rd, 2020

 

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.

 

Optimism and Procurement

Friday, April 17th, 2020

 

 

Today’s blog is by Margaret Stewart, Director of HR and Administration at SafeSourcing.

With so much going on right now, many people are scared or concerned with what will happen and what things will be like when this is all over. While we may not yet know what, if anything will change, there are some areas that have already been affected. In fact, there is at least one particular area that has actually improved.

Many years ago, it wasn’t uncommon for a family to only own one car or even no cars. Now, that has changed a lot. Many Americans each have their own car and it has been a necessity for people to get where they need to, whether it is work, school, or shopping. With the current virus situation people are no longer driving to work as often and most schools are closed. This has greatly reduced the number of vehicles on the road.

There are a few silver linings here. With fewer people driving, there have been fewer accidents. This means there are less people being injured or dying in vehicle accidents. Because there are fewer accidents, insurance companies haven’t had to pay out as much money for repairs and medical expenses. In fact, there have been several car insurance companies that have begun refunding premiums because they have paid out so much less.

With fewer drivers on the road, another silver lining is less traffic and this can greatly help truck drivers and other aspects of logistics. Fewer cars mean more room for truck drivers, fewer distractions, and again, fewer accidents that can cause delays. This can mean transportation of goods is quicker and more efficient.

Another silver lining is a decrease in pollution. With fewer cars, there are fewer emissions from exhaust. In addition, truck drivers’ ability to drive with fewer delays, means they are also emitting less. Even more than the reduction of exhaust fumes, with fewer vehicles, there is fast less gas and diesel consumption. This means production can slow down, which can additionally help reduce pollution.

While we wait to get through this and for life to return to normal, we can know that there have been some silver linings to this dark cloud of a virus.

For more information on how SafeSourcing can help your supply chain of sourcing needs, or on our Risk Free trial program, please contact a SafeSourcing Customer Service representative. We have an entire team ready to assist you today.

 

Knowing Who Your Suppliers Are – Onsite Visits – Part II of II

Friday, April 3rd, 2020

 

Yesterday we posted  about the importance of onsite visits with your suppliers, how to prepare, what to look for, and the value of performing these visits.  This week we will be taking a look at some of the additional things that you need to think about when visiting a supplier in another country.

Visits to international sites will need to encompass the same types of information gathering as a domestic one such as reviewing the cleanliness of the facilities, observing production, logistic and storage processes, but there 3 important areas that must be considered in addition to these that may determine the success or failure of the visit.

Language – Assuming you are visiting a supplier that is not located in a predominantly English-speaking country, the capability to communicate onsite is an important one that should be addressed well in advance of the visit.  Many times the supplier will have staff that is fluent in more than language and can act as an interpreter, however procuring your own interpreter is also a suggestion and possibility. Also, some basic considerations of your own communication style would be to speak more slowly than usual and pause in between sentences to be understood more easily.

Culture – This is an important area to prepare for because in some countries seemingly minor things can create a tense atmosphere.  Determining whether to bow and the details surrounding when and how, if the country shakes hands when they greet and which hand they shake with are all important items in some countries and should be learned prior to your visit.  On the other hand, it is equally important to note the things that are normally unaccepted behaviors in the U.S. which many times are not viewed the same way in other countries.  Americans would generally never answer a phone call in a meeting or show up to an appointment late, but in other countries these behaviors are far less important and frequently occur during the course of doing business.

Capturing the details – Visits to international suppliers generally come with a price tag that is not insignificant to your company, so capturing as much data as possible is important on these visits.  Wherever you go during your visit take a notepad and camera with you to record what you see and hear while on the visit.  Many manufacturers will allow you to take occasional pictures as long as you ask in advance and have it cleared.  Some may not allow it and others may allow it as long as no employees are included in the pictures.  Capturing these details will be very useful to you and your team in the future and can potentially save trips for other employees in the future.

Onsite visits to your suppliers are incredibly valuable and important to your organization and are a terrific tool for knowing who your suppliers are and how they do business.  They are also important forums to gather details necessary for later contract negotiations.

If you are interested in locating potential new sources of supply, please contact SafeSourcing.  The SafeSourceIt™ Supplier Database contains 457,000 globally.

We look forward to and appreciate your comments.

A timely repost! Contrarian, or just hipster?

Monday, March 30th, 2020

 

Today’s post is from our  SafeSourcing Archives

It’s popular these days to be contrarian, thanks largely in part to the disruptive entrepreneurs of silicon valley that have become just as well known for the products they create as any A-list celebrity. Reading business articles on the topic makes it sound like being contrarian is never a bad thing. However, while “contrarian” can mean just someone who goes against popular opinion, doing so just for the sake of being contrarian can be very dangerous. While there is some merit to the notion that doing something which everyone else thinks is crazy might just seem that way because it’s a hugely innovative idea, there are far more people who do crazy things that simply are monumentally bad ideas[1]. The way tech and investment entrepreneur Peter Thiel puts it, what matters is being “contrarian and right[2]. Being contrarian just for the sake of being contrarian makes you a hipster[3], being contrarian and right makes you innovative.

The common thread that runs through these instances of unpopular opinion is the need to have the skills to identify a good idea. For some reason, business journalists repeatedly fail to see the obvious when they praise a business leader’s being different as the means to the success, without realizing that it was the business leader’s ability to find truths that lead them in a non-conventional direction that led to their success. The obvious danger here is that you can just as easily think differently from popular thinking, and be wrong. So how do we avoid falling into the trap of believing that thinking different is always a good thing, without missing the possible opportunities of truly innovative thinking?

    •  Slow the conversation: Contrarians thrive on rapid fire dialog, with the intention of getting your buy-in of their first point, by moving on to several other points before you’ve had a chance to think of reasons why their first idea might be a bad idea. Don’t allow anyone to gain your tacit approval by not giving you time to object.
    • Don’t fall for “mood bullying”: At times, a contrarian thinker will push to get their idea accepted not based on its merit, but by making it uncomfortable for anyone else to reject it. Don’t fall for bad ideas just because you don’t want to deal with the drama that will ensue for questioning someone’s ideas.
    • Contrarian and argumentative: A telltale sign that someone is being contrarian just to be hip rather than for the merit of an idea, is to observe how argumentative they are. If someone will argue against every idea that isn’t theirs, and perhaps even argue against their own previously mentioned ideas, there’s a good chance they aren’t trying to bring value to your organization, but to their own ego.
    • Fail quickly: If you come across an idea that goes against conventional wisdom, but the reasoning behind it is solid, iterate its implementation. Today it’s easier than ever to create prototypes quickly. Commit a small project to an innovative idea, and let it prove itself by succeeding or failing quickly and in a low risk environment.
    • Evaluate the foundation/first principles: When Pokemon Go™ exploded onto the scene; investors saw the trend and invested heavily into Nintendo™. However, in this case the contrarians were right to go against the flow: Nintendo™ didn’t actually create the Pokemon Go™ game, and once it became obvious, Nintendo™ stocks plummeted[4]. However, having the skill to identify underlying principles that lead to a market bubble for instance is a contrarian skill based on an understanding of economics that can be objectively evaluated.

Contrarianism should be a byproduct, not a goal. Innovation entails thinking differently about something because there is an assumed truth being bought into that is wrong, or an underlying truth that by and large everyone else has missed. There were contrarians in the 90’s after all, who thought the internet was a fad, and whose businesses were destroyed by other contrarians that understood the fundamentally exponential potential of network externalities and brought us internet connected devices of every shape and size. The act of understanding more deeply, having a wider breadth of knowledge, and learning a wider toolset of logical and critical thinking skills will result in having views that differ from others in ways that add value without even trying.

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] “A Painful Year for Contrarian Trades – A Wealth of Common Sense.” 2016. 15 Aug. 2016 <http://awealthofcommonsense.com/2015/12/contrarian/>

[2] “E525: Peter Thiel (Founders Fund, PayPal, Palantir, Facebook) on …” 2015. 14 Aug. 2016 <http://thisweekinstartups.com/peter-thiel-launch-festival/>

[3] “http://www.bullbearings.co.uk/ 2014-12-18 monthly 0.5 http://www …” 2011. 14 Aug. 2016 <http://www.bullbearings.co.uk/sitemap.xml>

[4] “Nintendo shares plummet after investors realize it doesn’t … – The Verge.” 2016. 15 Aug. 2016 <http://www.theverge.com/2016/7/25/12269466/nintendo-stock-plunge-pokemon-go>

REMINDER! CIO Applications Magazine Honors SafeSourcing

Friday, March 13th, 2020

 

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.

 

Musings on Making Mistakes and why we have E&O Insurance!

Thursday, March 5th, 2020

 

Today’s post is from our archives at  SafeSourcing.

“Freedom is not worth having if it does not include the freedom to make mistakes.” ― Mahatma Gandhi

“Anyone who has never made a mistake has never tried anything new.” ― Albert Einstein

“Good judgment comes from experience, and experience comes from bad judgment.” ― Rita Mae Brown

Mistakes are inevitable, we all make them. In fact, life would be incomplete without them; and yet many of us waste valuable time and energy covering them up or even denying their existence. Making a mistake is not the worst thing we can do. I believe it is how we react to and reflect upon our mistakes that can make all the difference. In my opinion, our mistakes are some of the most well informed references in the library of our life’s experience. Once we are willing to embrace them for the lessons that they provide, we are able to learn that they contain a wealth of data about how best to conduct our lives moving forward. If only we could spend more time and energy extracting the gifts of wisdom from our mistakes and less time regretting them, we might also be more likely to extend that same forgiveness and compassion to others, thus contributing to an overall kinder and gentler world. Where’s the mistake in that?

And speaking of mistakes, here are just a few of my favorite mistaken song lyrics:

Hold me closer Tony Danza… Count the head lice on the highway – Elton John

I’ve got two chickens to paralyze – Eddie Money

This is the dawning of the Age of Asparagus – the 5th Dimension

There’s a bathroom on the right – Creedence Clearwater Revival

Donuts make my brown eyes blue – Crystal Gayle

Do you like bean enchiladas and getting caught in the rain? – Rupert Holmes

The sheep don’t like it… Rock the catbox! Rock the catbox! – the Clash

Interested in learning how SafeSourcing can help your company run more efficiently? Like to try a risk free trial? Please don’t hesitate to contact SafeSourcing. Our team is ready and available to assist you!

There are 7 steps of the strategic procurement process!

Thursday, February 13th, 2020

 

Today’s post is our SafeSourcing Inc Archives.

Only being with Safe Sourcing for a few days and knowing absolutely nothing about the company prior to my hire, I have learned a great deal of information in a very short amount of time. In order to fully understand what it is we do I have been doing a little research out side of work. According to sources, no pun intended, there are 7 steps of strategic procurement process.

Step 1: Conducting an internal need of analysis

To start you need to identify exactly what the needs are of your client. You need data including but not limited to, current performance, resources used, costs and potential growth.

Step 2: Collect Information

It is extremely important for you to collect as much information as possible, so you are able to help your client as best as possible. Look for specific requirements that are needed and see exactly what their goal is and how you can help them achieve that goal.

Step 3: Collect Supplier Information

Not only do you need information from your client, you also need to get information form your suppliers. You need to select suppliers carefully. You should only pick certain suppliers that are going to benefit your clients needs. It would also be helpful to learn a little bit about their company.

Step 4: Develop a Sourcing/Outsourcing Strategy

After all, 3 steps are complete you are in need of your Request for Proposal (RFP) or a Request for Quote (RFQ) to all the selected suppliers. You will also need to get your agreement and documents finalized and sent to your suppliers. Getting your business strategy in order will keep you organized.

Step 5: Implement the Sourcing Strategy

Having an Expression of Interest (EOI), a prepared RFP or a RFQ and solicit bids from identified potential suppliers as part of the bidding process is very important at this stage. The RFP should include:

  • Detailed material
  • Product or service specifications
  • Delivery and service requirements
  • Evaluation criteria
  • Pricing structure
  • Financial terms

Step 6: Negotiate with Suppliers and Select Winning Bid

Your procurement team will then evaluate the received proposals, quotes or bids, and use the criteria and a process to shortlist the bidders to provide detailed proposals and give reports to your client. After the evaluation process is complete, your procurement team will then enter contract negotiations with the first selected bidder.

Step 7: Implement a Transition Plan

Winning suppliers should be invited to participate in implementing improvements. A communication plan is a must when developing a system for measuring and evaluating performance.

These are a few things I have learned in the few days working for this great company and I feel that if you follow these few steps you and your team can develop and implement a strategic procurement plan.

Please contact a SafeSourcing customer Services team member about our risk free trial

We look forward to your comments

 

 

 

2019 SafeSourcing Top 10 List

Thursday, January 2nd, 2020

 

 

Todays post is from Dave Wenig, Sr. Vice President of Sales and Services at SafeSourcing Inc.

It’s the end of the year and that means many of your favorite entertainment and news sources are publishing their top 10 lists for the year. In that same spirit, I’ve pulled together a list of my Top 10 SafeSourcing moments in 2019. Let’s get right into the top 10.

10. SafeSourceIt™ Event View now features a graph view. Using this view, SafeSourcing customers have a powerful way to monitor their RFQ Events in real time at a high level that delivers valuable insights.

9. Bottled Water RFQ Events. SafeSourcing customers hosted many RFQ Events for bottled water savings between 16% and 23%. This represents an increase in category savings versus 2018.

8. Waste Removal continues its streak. Waste Removal has historically been a wildly successful category for SafeSourcing customer and that held true in 2019 with the average savings holding steady at about 35%.

7. Reruns won big. SafeSourcing customers that held rerun RFQs at the end of their contract terms beat expectations significantly. Typical expectations for rerun RFQs is about 50% of the savings from the initial RFQ Event.

6. Snow Removal and Landscaping. 2019 was a big year for customers hosting Snow Removal and Landscaping RFQ Events. Often overlooked as a competitive category, SafeSourcing’s customers saw between 16% and 42% savings. Wow.

5. Mobile Phones and Broadband were big. We noticed a huge increase in customers eager to explore their options for mobile service plans and broadband. Good for them, because each of them was very successful.

4. Flyer Distribution (Retailers). Nearly all of our larger retail customers throughout North America sourced their flyer distribution and uncovered savings. In some markets, customers often consider this impossible to source competitively and see it as a monopoly. We disagree and so do our customers who benefited from our assistance.

3. Incumbent margins. 2019 was a year full of focus on incumbent margins. We noticed a fantastic trend where incumbent vendors were awarded business after RFQs at a higher rate than is expected. This is a win for the incumbent who gets to keep their business at rates more in line with the market, and a win for the customer who gets the best pricing available and does not have to go through the process of changing vendors.

2. SafeSourcing in the Top 10. SafeSourcing was recognized as one of the world’s top auction application companies by CIO magazine. Link here.

1. Our customers and partners. We’re truly lucky to have some of the best customers and partners that any business could ask for. 2019 has been a fantastic year of working closely together with all of you. We’ve enjoyed the time spend and our visits and it has been our pleasure to work with you. If you’ve worked with us on a category named on this list, I’m sure you would agree on its inclusion. I look forward to working with all of our current customers and partners and can’t wait to make new connections in 2020. Thank you for an excellent 2019 and see you in 2020.

I hope you’ve enjoyed my picks for the Top 10 list. I’d be interested to hear what I missed and whether you agree with my ranking.

For more information, please contact SafeSourcing.