Archive for the ‘Strategic Sourcing’ Category

How are you dealing with your overstock issues?

Wednesday, June 8th, 2022

 

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

What you do with your overstock can decrease shrink and improve margins.

Many retailers loaded up their back rooms and warehouses with product due to the pandemic and inflation induced supply chain issues. Now the overstock inventory is causing a problem to current financials.

The term overstock refers to products that have been over ordered.  It is the responsibility of the buyer along with the warehouse inventory management team to manage this type of overage. Overstock or excess stock would result in additional operating capital.  Additional operating capital would create a huge impact on profitability due to the need for more storage space, which leads to higher overhead.

Online forward auctions are an ideal way to get the best price for capital equipment, materials, overstock, and services you may want to sell, such as when you need to liquidate excess inventory.

There are two basic types of forward auctions. The first is a liquidation auction where sellers are reducing inventory from overstock or liquidation and buyers are seeking to obtain the lowest price for items, they have an interest in for resale and other purposes. The second type is more of a marketing auction where sellers are trying to sell unique items and buyers wish to obtain unique items. This is typical of an eBay type of offering.

Much of retail shrink happens in the back room or receiving area of retail stores. It just so happens that this is also the location of much of the overstock in the retail community. Much of this product sits there month after month resulting in significant margin hits to quarterly and annual earnings and as such to a company’s stock price. Due to recent supply chain issues, it is now also an issue at Warehouses and Distribution Centers.

SafeSourcing is an eprocurement company that operates across multiple industries. As such we have specific experience in helping our customers reduce shrink through the forward auction process. To learn more, please contact a SafeSourcing customer services associate.

 

 

Horizontal Mergers and Such!

Tuesday, June 7th, 2022

 

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

So now what do you do? You have been acquired or acquired a similar business.

A horizontal merger is a business consolidation that occurs between firms who operate in the same space, often as competitors offering the same good or service. Horizontal mergers are common in industries with fewer firms as competition tends to be higher and the synergies and potential gains in market share are much greater for merging firms in such an industry.

This type of merger occurs frequently because of larger companies attempting to create more efficient economies of scale. The amalgamation of Daimler-Benz and Chrysler is a popular example of a horizontal merger.

Conversely, a vertical merger takes place when firms from different parts of the supply chain consolidate in order to make the production process more efficient or cost effective.

SafeSourcing is an eprocurement company that operates across multiple industries. As such we have specific experience in collaborative sourcing which is often needed during these times. Through the use of our SafeSourceIt™ Template library, SafeSourceIt™ Supplier Database and our SafeSourceIt™  eprocurement platform we can often aid in consolidation that ensures the lowest price available in the market today,

If you are involved in any type of merger, and would like assistance in consolidating your spends, please contact a SafeSourcing customer services associate.

 

 

 

E-Procurement

Tuesday, May 24th, 2022

 

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

How does your procurement department define E-Procurement today?

The following is a generally good definition of E-Procurement. However, complete SaaS offered end to end solutions have continued to evolve over the years. Often solutions today are used across multiple solution providers as they can be turned on and turned off and integrated in a truly brief period.

eProcurement is a business to business exchange of goods or services facilitated by the internet. A complete set of e-procurement tools can include products for management of correspondence, bids, questions and answers, previous pricing, contracts and email. Although many Enterprise Resource Planning suites offere-procurementsolutions, the current generation of software is typically purchased on-demand or as software-as-a-service (SaaS). Elements of e-procurement can include request for information (RFI)request for proposal (RFP), and request for quotation (RFQ), which together are categorized as “RFX”.

If you’d like to learn more about SafeSourcing’s additional E-Procurement solutions that are part of our SaaS offered esourcing suite like SafeContract™, SafePO™, SafeContract™ and the SafeSourceIt™ Supplier Database please contact a SafeSourcing customer services associate.

Logistics Service Provider

Thursday, May 19th, 2022

 

 

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

Logistics outsourcing involves a relationship between a company and an LSP (Logistic Service Provider) which, compared with basic logistics services, has more customized offerings, encompasses a broad number of service activities, is characterized by a long-term orientation, and, thus, has a rather strategic nature.

An LSP is really what most people would see as a traditional 3PL provider offering a combination of warehousing and transportation services or one or the other. As global and multi-national providers enter the game, things have certainly changed, but the Logistics Service Provider at its core is fundamentally the same.

Third-Party Logistics Provider (3PL) involves using external organizations to execute logistics activities that have traditionally been performed within an organization itself. According to this definition, third-party logistics includes any form of outsourcing of logistics activities previously performed in-house. If, for example, a company with its own warehousing facilities decides to employ external transportation, this would be an example of third-party logistics. Logistics is an emerging business area in many countries.

If you’d like to learn more about how SafeSourcing can assist in managing your selection of a variety of logistics issues, please contact a SafeSourcing customer services associate.

 

 

 

Seller-Driven Auctions

Friday, May 13th, 2022

 

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

A seller-drive auction is an auction where sellers post goods for sale and buyers will bid on them. A good example of a seller-driven auction would be eBay©. A seller would place a particular item that they want to sell online, and buyers wanting to purchase that item will place bids trying to ultimately win the auction for the product (s).

An often-overlooked tool is an online Forward Auction. Forward Auctions can be used to reduce over stock and decrease associated loss prevention costs.

Online forward auctions are an ideal way to get the best price for capital equipment, materials, overstock, and services you may want to sell, such as when you need to liquidate excess inventory. There are two basic types of forward auctions. The first is a liquidation or Forward auction where sellers are reducing inventory from overstock or liquidation.

If you’d like to learn more about how SafeSourcing can assist in properly identifying and selling your overstock and other back-room accumulations through the use of a SafeSourceIt™ Forward Auction, please contact a SafeSourcing customer services associate.

 

 

High-Low Pricing Strategy

Wednesday, May 11th, 2022

 

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

According to Wikipedia, high-low pricing (or hi-low pricing) is a type of pricing strategy adopted by companies, usually small and medium sized retail firms. It is a type of pricing where a firm charges a high price for an item and later will sell it to customers by giving discounts or through clearance sales. The basic type of customers for the firms adopting high-low price will not have a clear idea about what a product‘s price would typically be or must have a strong belief that “discount sales = low price” or they must have strong preference in purchasing the products sold in this type or by this certain firm.

There are many big firms using this type of pricing strategy (ex: Reebok, Nike, Adidas). The way competition prevails in the shoe industry is through high-low price. Also, high-low pricing is extensively used in the fashion industry by companies (ex: Macy’s, Nordstrom…).  This pricing strategy is not only in the shoe industry but also in many other industries. But, in these industries one or two firms will not provide discounts and works on fixed rate of earnings those firms will follow everyday low-price strategy in order to compete in the market.

If you’d like to learn more about how SafeSourcing can assist in properly analyzing the total cost of your annual purchases, please contact a SafeSourcing customer services associate.

Sourced: http://en.wikipedia.org/wiki/High-low_pricing 

Collaborative Planning, Forecasting and Replenishment

Thursday, April 7th, 2022

 

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

With the supply chain being in the turmoil that it is today does this process still work and can mid-market companies even afford it.

Collaborative Planning, Forecasting, and Replenishment (CPFR) is a type of software system that enables businesses to interactively share production, inventory, and order information online with their partners. Its main concept aims to enhance supply chain integration by supporting and assisting joint practices. CPFR seeks cooperative management of inventory through joint visibility and replenishment of products throughout the supply chain. Information shared between suppliers and retailers aids in planning, satisfying customer demands through a supportive system of shared information.

What are your alternatives to Collaborative Planning, Forecasting and Replenishment? SafeSourcing has written about this subject many times. You can find them in our SafeSourcing Daily Blog that has published over 3500 articles on a variety of topics. Please check into these three or research the rest of our archive yourself. What is Collaboration? Part I. What is Collaboration? Part II and What is Collaboration? Part III of III.

If you would like to learn more about our daily blog philosophy please contact a SafeSourcing customers services associate.

Is your company getting the best rates for natural gas and electric?

Tuesday, February 8th, 2022

 

Today’s re-post is from many years ago and our SafeSourcing Archives

Since the Federal Energy Regulation Commission (FERC) chose to limit its power to wholesale transactions, the road was paved for states to choose how they would allow price competition. This is also known as deregulating, which, means that companies can choose the gas and electric that is used at their business locations. It doesn’t mean eliminating of laws that protect against fraud, but reduces how business is done, thus migrating towards a freer market.

Currently, there are only twenty-six (26) states that are deregulated. A number of those are listed in the chart below.

 

Natural Gas Electric

 

 

 

 

 

 

 

 

 

 

 

PC=Partial Choice

Online bidding has now become a best practice for energy procurement. By inviting multiple energy suppliers to your specific opportunity being hosted for you by SafeSourcing, all suppliers will be able to quote interactively during a set time which extends until the lowest rates are identified. The method ensures fair and translucent competition, these benefits suppliers who want to win more business and challenges the market to offer aggressive rates.

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.

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.