Archive for the ‘Strategic Sourcing’ Category

Joe, Dirt, Java, Brew, Cuppa, Go Juice, Jitter Juice, Bean Juice, Brain Juice, etc.

Friday, April 21st, 2017

 

Today’s post is by Gayl Southard, SafeSourcing Administrative Consultant,

There are many names for coffee, with people making up their own pet names for the beloved brew. With the warmer weather approaching, iced coffee becomes very popular with the coffee-drinking crowd.  But why is iced coffee more expensive than hot coffee?  Depending upon where you buy your coffee, iced coffee can be as much as 60% higher than hot coffee.  A Starbucks grande cup of Nitro Cold Brew averages $3.60, much more than the company’s regular cold brew, which cost $3.25, and over a dollar more than a hot drip coffee of the same size.

Cold brew coffee is brewed with cold or room temperature water instead of hot water. The lower temperatures mean the extraction is slow and take hours to make – often half the day.  It also requires more coffee.  A standard water to coffee ratio might be 17:1.  For cold brew, it might be 4.5:1.  This coffee, labor and time simply make it a more expensive process.  What is left after this process is a concentrate that is cut down with water.  Other things to consider when ordering a cold brew is that plastic cups cost more than paper cups – also factor in the straws.  Ice is also very expensive.  “Ice is a fortune, Michael Pollack of Brooklyn Roasting company told Gothamist last year.  If you think we go through coffee fast, double that for ice.  We actually store ten gallon refrigerator boxes of ice because our needs are so tremendous.”1

SafeSourcing has a lot of experience sourcing coffee and coffee products. It is a category that is sourced regularly.  For more information on how SafeSourcing can assist you or on our “Risk Free” trial program, please contact a SafeSourcing Representative we have an entire team waiting to assist you today,

Resources:

[1] Ethan Wolff-Mann, Money, 5/31/2016

Why should I schedule a HVAC maintenance appointment?

Thursday, April 20th, 2017

 

Today’s post is by Troy Lowe; Vice President of Development at SafeSourcing.
Spring is here and the temperature will soon be rising.  That means we will be turning on our air conditioners for the first time in a few months.  One thing to consider before it gets too warm is scheduling your annual HVAC system maintenance.  This will ensure that your system is running efficiently, help prevent costly breakdowns, and give you piece of mind during the warm season ahead.  During the inspection the technician will inspect the unit and make sure that everything is clean and running correctly.

There are many benefits for maintaining your HVAC units, such as lower energy bills.  Just because the unit is cooling and heating does not mean that all is well.  A system that is not well maintained slowly loses its ability to keep the same temperatures at the same efficiency it once did, therefore leading to slightly more expensive energy bills over time.  Regular maintenance will also prolong the life of the unit.  Units that are not maintained will become dirty which makes some of the parts work harder and shorten the lifespan of those parts.  Below are some benefits of a having a well maintained HVAC unit.

➢ Increased Energy Efficiency

➢ Extended Lifespan

➢ Decrease in Repairs

➢ Early Warning of Worn Parts

➢ Improved Air Quality

➢ Better Humidity Levels

➢ Safer Operation

If you need help finding a trained HVAC technician, feel free to contact SafeSourcing.   We can gather all the necessary information for you and help you decide which company meets your needs.  If you would like more information on how SafeSourcing can help you, please contact a SafeSourcingCustomer Service representative.  We have an entire team ready to assist you today.

 

How are you spending your hours?

Wednesday, April 19th, 2017

 

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

There are just not enough hours in the day! Everyone has heard or said this phrase at least once in their life. Sometimes this phase is true and there is simply not enough time to complete a project in one day. However, more often than not, it is a product of poor time management. I am going to give just a couple of tips to better help with your time management.

First, we must understand what time management is.  Dictionary.com defines time management as “the analysis of how working hours are spent and the prioritization of tasks in order to maximize personal efficiency in the workplace.” An easy way of defining time management is to simply say, “How to utilize the 24 hours that a day provides you?” Simple right? Not so much.  It is very easy to get carried away with a project and to put something else on the back burner. To ensure you are utilizing your 24 hours properly, simply stop and perform a few of these tricks:

1) Write down the task you would like to see accomplished in one week.

2) Prioritize those tasks by importance.

3) Write down the task you should be able to complete in one day.

4) Order your daily task by importance.

5) Put an estimated time limit you expect each task to be completed.

6) Schedule your day according to your task.

7) Buckle down and complete the task on your list.

8) If unable to complete a task, make it your top priority for the next day.

I truly believe that if you follow the above task list you will find yourself getting more accomplished in a single day than you thought was possible. This is why at SafeSourcing we have a daily morning meeting where we prioritize the tasks we must complete in a day. Give us a call so you can witness firsthand how quickly we can get an event complete and start saving you money.

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.

Source:

“time management”. Collins English Dictionary – Complete & Unabridged 10th Edition. HarperCollins Publishers. 17 Apr. 2017. <Dictionary.com http://www.dictionary.com/browse/time-management>.

Tactical and Strategic Sourcing

Monday, April 10th, 2017

 

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

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.

 

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.