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Archive for the ‘Supply Chain Procurement’ Category

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All the policies in the world don’t necessarily make us safer.

Friday, January 27th, 2012

I read two articles today. Most people would not connect them. I do. The first was on the front page of USA TODAY titled Scientists engineer bioterror fears by David Vergano. The subtitle was New mad-made bird flu strain raises prospect of deadly pandemic. The second article was in the business section of THE ARIZONA REPUBLIC and titled Obama plan would protect goods headed to the U.S by John Heilprin.

I’m not sure I need to tell you how these articles are tied together, but an army is only as good as its supply chain and a population is pretty much the same from a product availability and safety persepctive. If you’d like proof, Think North Korea vs. the U.S.So where does the work need to be done. 

This picture is just product safety oriented without adding in any of the other concerns realted to the articles

Big job. Lots to be done

We look forward to and appreciate your comments

Posted in B2b Supply Chain, E-supply Chain, Supply Chain Procurement

The pilgrims also ate a lot of seafood during their Thanksgiving festival.

Friday, November 25th, 2011

I was watching television report lat night about the safety of gulf seafood as a result of the BP oil spill from last year. Don’t worry, most of our seafood comes from elsewhere.

Do you ever wonder where the sea and lake food that you eat comes from and whether or not it is safe to eat? Are the seafood buyers at your local grocery or restaurant concerned for you?

Almost three years ago during my first post I promised that The SafeSourcing Blog would call attention to and comment on safety concerns within the global supply chain that may impact your customers, employees, families and other stake holders. I’m sure like me; many of you have been impacted by safety inconsistencies in our supply chain. Personally I have had issues like this impact me, members of my family and my pets.

I recently was watching a little snippet from YouTube attributed to ABC News about the origin and quality or lack there of regarding seafood we consume. As a kid growing up on the east coast near Cape Cod I kind of always assumed that all fish was fresh fish from our Atlantic, Pacific and Gulf waters. Well today, more than 80% of our seafood comes from foreign countries such as Thailand, Indonesia, China and Costa Rica to name a few. Of this, only 1% is tested by the FDA and most of it fails inspection because it includes chemicals, poisons, antibiotics and other additives and is even in some cases farmed in unsanitary conditions. The primary reason for the import to locally fished discrepancy is as you might suspect; price.

This author would hope that all seafood and lake food buyers for our restaurant and grocery chains would ask their suppliers a few of simple questions.
 
1. Where is the seafood you are selling us coming from?
2. Where will the incoming shipments be tested before you deliver it to us?
3. Is it safe for our consumers to eat this fish?

If the answer is not to your liking and documented, don’t buy it. Your consumers will thank you.

We look forward to and appreciate your comments.

Posted in B2b Supply Chain, Sourcing Safe Foods, Supply Chain Procurement

Thanksgiving is really a story of a supply chain found and developed!

Thursday, November 24th, 2011

One hundred and two pilgrims and crew arrived in Massachusetts after a 3,000 mile trip from England on the Mayflower. It is safe to say that as a result of that distance there was no existing supply chain to leverage, so one had to be developed and quickly. This began with basic hunting and gathering and later included trading with the areas indigenous peoples known as the Wampanoag’s for corn, seed and foraging and planting techniques.

The Thanksgiving holiday we celebrate today really stems from the feast held in the autumn of 1621. Since the pilgrims had only arrived on November 21st of 1620 they had really not been there long enough to develop a fully reliable and renewable supply source. They had however established collaborative relationships with the local Wampanoag people who became regular trading partners and who helped them celebrate the colony’s first successful harvest.

The most detailed description of the “First Thanksgiving” comes from Edward Winslow from A Journal of the Pilgrims at Plymouth, in 1621:”Our harvest  being gotten in, our governor sent four men on fowling, that so we might after a special manner rejoice together after we had gathered the fruit of our labors.

The fowl referred to above certainly could have included a wide range of fowl that was plentiful in the area such as wild turkey, pheasant, goose, duck, and partridge and unfortunately by today’s standards even eagles.

The pilgrims probably didn’t have pies or much of anything sweet at the harvest feast because they did not yet have ovens. They had brought some sugar with them on the Mayflower but by the time of the first Thanksgiving, the supply had probably run out.

Their meals also included many different types of meats. Vegetable dishes, one of the staples of today’s Thanksgiving, didn’t really play a large part in the feast. Other items that may have been on the menu certainly included sea food such as clams and lobster, Indian corn, wild fruits and nuts, meats such as venison and seal and certain dry herbs and spices.

The Thanksgiving meal that has today become a national holiday is a symbol of supply chain cooperation and interaction between English colonists and Native Americans.

We look forward to and appreciate your comments.

Happy Thanksgiving.

Posted in B2b Supply Chain, Supply Chain Procurement

Just what is a Private Label product and where do you source it?

Wednesday, October 26th, 2011

Probably the best source of information on private label or store brand products is the PLMA or Private Label Manufacturers Association. This is actually a global organization.

According to their website, their show this year in Chicago from the 13th -15th of November will present more than 2,000 exhibit booths, featuring food, snacks and beverages, household and kitchen products, GM, and health and beauty. Exhibitors range from large, well-known store brand makers to small and medium-size companies. More than 35 countries will be represented on the show floor, including ten national pavilions.

If you’re not happy with your current private label offering or have never had one, this show is a must. There are also a number of educational workshops. In fact, PLMA sponsors workshops throughout the world annually. You can find a little more information on these at their website http://plma.com/.

We look forward to and appreciate your comments.

Posted in B2b Supply Chain, Supply Chain Procurement

You just got a great price on an inventory of goods; now how do you protect it?

Monday, October 24th, 2011

One of the ways that SafeSourcing helps its customers is to find ways to allow them to reduce their Cost-Of-Goods by sourcing smarter through the use of tools and services that give them total insight into what they are purchasing and from whom.  As is often the case, customers are able to find a vendor they feel comfortable with (many times the incumbent) at prices that help their bottom line.  The issues lie once the contract is signed, the new pricing is in place and the product begins to get scheduled for delivery.

Today we are going to take a look at some of the potential supply chain holes and what you can do to ensure that the great deals you have completed are not offset by process, theft and damage problems that can be monitored and controlled.

Vendor issues – One of the common misconceptions about Loss Prevention professionals is that they primarily deal with activity that is fraud or theft when in reality it is often honest mistakes, but mistakes nonetheless, that contribute much of the loss when product comes from a vendor.  One of the best ways to combat this is to engage a Loss Prevention software company to analyze the data of what is being delivered (which includes quality control) against the invoice in an automated system that allows for real-time analysis.  Ensuring that the product quantity, style, and quality is what you paid for is the first step to plugging your supply chain holes.

Transport issues – Transportation is becoming one of the most alarming areas of loss of your product, especially in bigger cities where organized crime is routinely stealing entire trailers full of merchandise.  RFID and GPS pallet monitoring are two of the ways that companies are using to monitor their shipments from the time they leave the vendor until they arrive at their warehouses.  Speak with your transportation company about new ways to monitor shipments and controls your loss in theft and damages and if you are approaching a contract, now may be the time to begin seeing what other companies are offering by running an Request For Information.

Internal Issues– If you can get your shipments to your offices or warehouses without much damage or loss then you have only won half the battle, especially if the product you received will need to go from a warehouse or distribution center to another location.  CCTV systems are regularly employed in warehouses to monitor the flow of goods coming and going but require an employee or service to assist in the effective monitoring.  Many times the practices you enforce for the workers in your facilities can be an effective tool as well such limiting the access an employee has to their purses or bags until they are in a secured area. Monitoring what happens to the product you purchase once you receive can be just as important as making sure it gets to you safely.

The supply chain can be a place full of pitfalls for your purchased goods if you are not monitoring it properly but you have many good options and tools to help you do that. When you build your T&C’s, list the policies and tool requirements that you want your vendors to adhere to in order to mitigate after the negotiation leakage.  For assistance in finding companies and products to help do this, please contact a SafeSourcing Customer Service Representative.  

We look forward to your comments.

Posted in B2b Supply Chain, Sourcing Strategy, Supply Chain Procurement

Back To The Future!

Thursday, October 13th, 2011

Companies and individuals enter into contracts based on the future price of a market or commodity. Manufacturers that use a variety of commodities in their manufacturing process constantly balance the swing of many commodities in order to drive blended costs that most benefit their future needs. Futures can be monitored on future markets like Bloomberg amongst others.

A very simple example of how this data might be useful to a buyer is that of a retail real estate – construction buyer that is looking at construction of new stores for the upcoming year. If we continue with the Bloomberg example, they report futures prices on energy, agriculture, industrial metals etc. If a buyer were to look at the future price for lumber within the agriculture category based on 1000 board feet, as of this report the cost for this commodity is down 3.46%. This reduction in price might be used as a negotiation point for upcoming stick builds versus prefab on concrete structures that are in your plan for the particular future month being sold. It does not take very long to look at these reporting tools in order to understand trending in commodities that affect your sourcing. Another example would be looking Diesel futures as they impact your distribution costs and those of supplier’s providing products to you.

A simple step you can take is to pick three market views such as Bloomberg, CME etc. Pick a half dozen commodities that impact the products you are sourcing. Now take 10 minutes per day to review them so that they become second nature to you.

If you’d like help in this process or are interested in track a commodities price versus your particular purchase points, please contact SafeSourcing.

We look forward to and appreciate your comments.

Posted in Business Sourcing, Sourcing Strategy, Strategic Sourcing, Supply Chain Procurement

Is the inclusion of freight in an e- bid or reverse auction equal to the net landed cost?

Friday, October 7th, 2011

Sourcing freight lanes or shipping lanes is a project all its own. A shipping lane simply put is the general movement of products between two areas. The first is the departure area and the other is the arrival area. This gets more complicated when we start to discuss full loads versus less than full loads and haul back opportunities that accomplish the optimum in a transportation cost model.
 
When you structure your e-bid simply asking for a net landed cost or assuming that means free freight or free freight within a certain radius of the origination point,  is just not that easily accomplished.

If you really want to understand your net landed cost, then you should have line items in your event that are specific, measureable and bid on separately. When a company says they want a net landed cost what they are referring to is the cost of a product or products plus all of the relevant logistics costs, such as transportation, warehousing, handling etc. In other words, what’s my cost when it gets here or where we want it?

If you want to drive the best pricing and service possible you need to understand what you are asking for and make sure it is clear in your specifications and terms and conditions.

We look forward to and appreciate your comments.

Posted in E-supply Chain, Sourcing Strategy, Strategic Sourcing, Supply Chain Procurement

We’ve all heard about the wild blue yonder. But what is Blue Ocean Strategy?

Thursday, September 15th, 2011

4PL’s or fourth generation logistics providers are the newest (although not that new) of logistics providers and typically they are a consulting firm that brings together the resources of other providers such as 2PL’s and 3PL’s to drive world class logistics performance. This might include global or local companies that are focused on air transportation; ground transportation as well as ocean bound freight. The goal of these organizations is to piece together solutions rather than to develop or own them. Without assets, 4PL’s can change quickly as performance and demand dictates.

With a good 4PL in place companies typically are not bound by their traditional marketing areas and can create new demand in areas they may have never conducted business in before. This is referred to as Blue Ocean Strategy.

According to Wikipedia, Blue Ocean Strategy is a business strategy book first published in 2005 and written by W. Chan Kim and Renée Mauborgne of The Blue Ocean Strategy Institute at INSEAD. The book illustrates what the authors believe is the high growth and profits an organization can generate by creating new demand in an uncontested market space, or a “Blue Ocean”.

How are you managing your logistics requirements?

We look forward to and appreciate your comments.

Posted in B2b Supply Chain, Supply Chain Procurement

Purchasing through a Cooperative Part I of V

Monday, August 22nd, 2011

Today’s post is by Mark Davis; Vice President of Operations and CTO at SafeSourcing. 

Throughout the years many industries have discovered that their smaller companies and independents can benefit greatly from cooperatives; business organizations that are owned and operated by their members for the mutual benefit of pooling their resources in a more productive manner.

As time has gone by, and more and more companies merge and consolidate into huge super-corporations, these cooperatives become even more important for their members as they try and compete with companies 10 times their size.

This week we are going to take a deeper look at some major cooperatives in different retail verticles and focus on some of the similarities and differences between them as well as some of the unique things that each is doing to provide greater purchasing power for its members.

Although there are some obvious differences between retail “co-ops” that coincide with how their industries work, there are a few items that are shared by all.  We will start today by looking at some of those common advantages.

Economies of scale – One of the main reasons companies join a cooperative is to be part of an organization with the purchasing power of a large corporation, benefitting from the lower prices achieved by purchasing much higher quantities of goods than they could on their own.

Group Training/Education – In many cases smaller companies must either forego much needed training and education opportunities because of the cost or they must settle for online or webinar courses.  As a cooperative, the group can easily schedule and host multiple training and education sessions throughout the year that would normally be available only to the biggest companies in that industry.

Enterprise product/service opportunities – As mentioned above, purchasing as part of a larger group can reduce the cost of things you are already buying.  As a cooperative, companies also have the opportunity to purchase enterprise products and services such as enterprise software that they could never possibly have afforded on their own.  With so many software companies offering Software as a Service (Saas) models, this is becoming a more important benefit of cooperatives every year.

These are just a few of the basic advantages for becoming part of a cooperative.  The rest of this week we will be taking a closer look at some of the different retail industry cooperatives and what they are doing to help their members with purchasing different products and services.

For more information on the retail industry’s cooperatives or how your cost-of-goods can be positively affected by joining one, please contact a SafeSourcing Customer Service Representative.  

We look forward to your comments.

Posted in Sourcing Strategy, Strategic Sourcing, Supply Chain Procurement

Still having supply chain issues?

Friday, July 15th, 2011

It has been 125 days since the devastating earthquake and tsunami hit Japan, yet many companies are still struggling to cope with the fallout of their supply chain. Hopefully, our readers are not in this situation. However, if your company is still struggling with a supply chain issue or if you would like to be prepared for a future disaster, please read on.

Yesterday, I spoke with a vendor that had to sit out of a $2.9M opportunity due to such an issue. What’s worse; they told me that they have taken steps to source their products in North America, but that they are still six to eight months away from considering new business. No matter who you are, you simply cannot afford to walk away from sales opportunities of this (or any) size.

So, how could they have mitigated their exposure to this risk?

There are a variety of resources and processes that could (and should) have been in place long before any disaster struck.

1.Only purchase using an RFx service. Hosting an RFI, RFP, or an RFQ would have identified additional sources of supply with contacts in the event that a vendor change is required.

2.Implement a contract management service. In the example I have used, they have had this same source of supply for years. Using contract management, this company would have been prompted to source this product several times during this timeframe based on the appropriate schedule and contract terms.

3.Consult with your strategic sourcing partner. Whether you want to be prepared for the future or work through a current supply chain issue, call on your partner for advice. Their job is to help you succeed.

For more information on SafeSourcing and supply chain interruption preparedness, please contact a Customer Service representative.

We look forward to and appreciate your comments.

Posted in B2b Supply Chain, Supply Chain Procurement

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