Archive for the ‘Supply Chain Procurement’ Category

Understanding the Synergy of Culture and Procurement

Wednesday, September 12th, 2018

 

Today?s post is?from our?SafeSourcing. Archives

The follow-up question to the one above could be, ?Do you even KNOW what your company?s culture is versus what they intended for it to be??

I recently attended a local ISM meeting where the guest speakers from VAP Packaging did a terrific job (with a number of their team members) explaining the importance of culture not only within their organization but for other organizations as well.?? The culture they have developed has empowered their entire team with the confidence to think outside the box and a system or rewards when they do so effectively.? It was impressive.? For a long time, the culture of a company and how that company handles its supply chain have not always been on the same page.? Unity and Teamwork are preached to operations while procurement is still told to SAVE MONEY and CUT COSTS.

Opportunity not just Order Taking ? As procurement professionals we are tasked with assisting the business to run more smoothly, to help save money and to help foster business partnerships that will grow the company.?? In many companies this translates to ?Rick, I need a million widgets.? Go get me some quotes and samples of the best ones out there.? After we decide what we want you can beat them up on price and write up the contract.??? While this does provide some value to the organization by freeing operations time to do what it needs to do, it does not account for the fact that maybe ?Rick? could have presented 2 new options to the business that switch to ?dongles? at half the cost, half the volume and can improve operational efficiency by 25%.?? Not all companies will embrace outside the box thinking from its procurement team so understanding where the current culture stands is an important part of improving that.

Value of cost reduction ? There are so many times people get enamored by the numbers.? They hear about a solution or product that has an ROI of 5x in 6 months or that can generate $500,000 in savings, and they instantly seek for ways to implement that service or bring that product into use.? What can be ignored in the process, is the fact that by introducing this new product that is going to save $500k to operations, internal procedures and personnel must now change what they are doing, resulting in a drop in efficiency of 40%, costing the company $1M over 9 months.? There can be a cost of change to achieve savings and understanding the pressure points with the organization is critical to weighing the value of a new change.

Understand the Relationships ? Many professionals will see this point and think ?See, don?t mess around with the vendor relationships I have spent years developing.?? This is not saying that.? The point being made here is to understand completely what relationships are currently in place so that they can be reviewed for improvement. Partnerships can be good.? They can provide security and assistance in emergencies and they can help strengthen companies when the fit is right.? Partnerships are not always good when they are defined by ?I have been doing business with Jim for 10 years and he has never let me down.? I am sure he is giving me the best prices he can give me.? He even stops by once a month to take me to lunch where I hardly see other vendors.?? These types of relationships have the tendency to cover years of price increases and terms that have benefitted only the vendor.? Understand the relationships in place so that facts and research can be done to either challenge or support the value they bring to the organization.

At SafeSourcing we understand the value of understanding your company culture and have been doing it for our customers to help them effectively structure projects for years.? For more information on how SafeSourcing can assist you 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.

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Reverse Supply Chain Management or Reverse Logistics!

Wednesday, June 20th, 2018

 

Today?s re-post is by Mike Figueroa,?Project Manager at SafeSourcing.

We?ve spent years perfecting how to get ?stuff? from in the dirt where we found it, make it more useful, and put it into consumers hands. This is called ?logistics?. But now we?re faced with the task of figuring out how to do the opposite, without destroying the planet we got it from.

Enter Reverse Supply Chain Management (RSCM) or ?Reverse Logistics as it?s sometimes called. The short definition of RSCM is to capture value from end of life products, and to take them backwards into the supply chain and/or reintroduce them into the biosphere/technosphere through a sustainable and profitable system. This can include activities such as reacquiring ownership of used products from the end user back to the manufacturer or reseller, transportation of used products for sorting, evaluation and designation of products for their most profitable use, remanufacturing or refurbishing, creating secondary markets for reclaimed products, recycling back to base components and responsible disposal.

One example of RSCM is the relatively new business of ?Deconstruction?. In this process buildings are taken apart based upon material component value. These materials are either re-used in new construction, recycled into raw materials, or disposed of through environmentally sustainable means. Total annual building materials (C&D debris) disposed of in landfills in the US each year is not tracked by the EPA, but estimates range between 170 and 600 million tons disposed of in landfills currently, typically with only certain metals ever being collected and recycled from the debris. Organizations pioneering this field can be found at http://www.bignyc.org/, http://www.lifecyclebuilding.org/, and www.bmra.org.

Another example of businesses capturing value from RSCM is Dupont, which achieved zero-landfill status at one of their facilities that allowed them to realize $2.2 million in revenue in 2011 from the sale of waste by-products, and $400,000 in cost avoidance (http://www2.dupont.com/inclusive-innovations/en-us/gss/sustainability/employee-engagement/landfill.html). Similarly Subaru, GM, Honda, and Burt?s Bee?s have captured additional revenue or cost avoidance by repurposing waste through reverse logistical processes (http://www.greenmanufacturer.net/article/facilities/manufacturers-gone-zero-landfill).

The challenge is that reversing the supply chain for products that have been modified in an infinite number of ways over their usage life is exponentially more complex than taking virgin material to end consumer product. The premise to that problem however, should be that not engaging this process now while it?s optional, only makes what will certainly become a necessity more complex the longer it?s postponed, and presents a large opportunity cost every year potential new savings/revenue is not captured.

We at SafeSourcing have a knack for finding markets and cost avoidance opportunities that most don?t aren?t even aware exist. 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.

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HAPPY NEW YEAR 2018 from Safesourcing; Your GLOBAL SOURCING PARTNER!

Monday, January 1st, 2018

picture of world

If you’d like to learn more about alternative sources of supply around the world or locally, contact a SafeSourcing customer services account manager to learn more about SafeSourceIt? our 427,000 global supplier database and let us translate it into increased profits for you.

We look forward to and appreciate your comments.

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

Wednesday, November 22nd, 2017

 

Todays post is by Ronald D. Southard, CEO at SafeSourcing Inc.

Happy Thanksgiving Weekend from SafeSourcing

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.

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What is a stock out and what are some of its effects?

Monday, November 13th, 2017

 

Today?s post is?from our ?SafeSourcing?Archives.

A stock out, or out-of-stock (OOS) is defined as ?a term used in product manufacturing or distribution to describe an inventory shortfall arising from unexpected demand, ineffective inventory management, production delays or replenishment disruptions.? This leaves obvious undesired effects for both the business and the customer.

If merchandise is not available for a customer there may be many possibilities. Your customer may decide to wait to purchase the product. If the product is essential to the customer, then they may be prepared to wait. Even with the willingness to wait, there might be a considerable downturn to the customer’s satisfaction level.

The customer decides to purchase from another vendor or retailer. If the customer is able to obtain the product elsewhere or does not need the item immediately, this is the normal outcome. It is still possible that the customer will do business with you in the future, but this may be detrimental to their customer satisfaction level.

The customer is no longer a customer. This is the potential worst case scenario of a stock out. If a customer is unhappy being unable to immediately purchase the desired product then they may also be willing to permanently purchase or procure this product from another vendor or retailer.

We enjoy bringing this blog to you every week and hope you find value in it. We want to help keep your shelves stocked, with the products your customers need. 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.

 

 

 

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What?s the genesis of your supplier database and how was it built?

Tuesday, August 8th, 2017

 

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

All databases have their start as an information gathering exercise that ultimately is enhanced by those characteristics the owner or developer determines to be useful to the community of interest the database is to be offered to. The information then becomes part of a data model where information sets can be accessed or searched based on a variety of queries or questions. Most developers follow a process called Universal Description, Discovery, and Integration or UDDI? as this process.

Universal Description, Discovery and Integration or (UDDI) is a standard established for building online databases of companies and the goods and services they provide, similar to Yellow Pages for the Internet. UDDI is intended to help businesses locate suppliers and products. Sourcing companies supplier databases go well beyond this definition.

Data models can be extremely complex and that is where they become more than a simple on line yellow pages. In fact high quality supplier databases should be able to provide much of the data you might find in the opening pages of a detailed RFI. A simple query like show me all companies within a 500 mile radius of your home office zip code that provide a set of products that meet the following safety certifications.? A next step might be summarizing all company information for these companies by a list of attributes such as company description, sale, years in business, officers etc.

How easy would that make your life?

If you’d like to find more qualified and vetted suppliers to support your sourcing efforts of any product or service, please contact a SafeSourcing Customer Services Account Manager

We look forward to and appreciate your comments.

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A simple supplier scoring system may provide key performance indicators for the future.

Monday, August 7th, 2017

 

Todays post is by Ron Southard, CEO at SafeSourcing Inc.

Having a large international supplier database to drive sustainable results in e-procurement events such as ant e-RFX function is critical to that events success. Maybe even more critical is making sure that the suppliers once selected for participation in an event are of the highest quality, professional, responsive and have your best interests at heart. There are several areas in the early strategy stages of a? an e-RFX process which if properly monitored can be leading key performance indicators as to future performance. These KPI?s are; the initial supplier response and supplier training schedule adherence. If suppliers are not interested enough during these early stages, this may be an indicator of future performance in other more critical areas such as on time delivery, back order management, documentation and audit compliance.

A reasonable process for measuring these KPI?s would be to measure the number of days between the project start date or initial supplier contact and the event start date, where the supplier has been sent an invitation but has not responded either positively, negatively or given a reason? for their response. Maintaining an active status of response dates could be scored based on the number of days it takes invited suppliers to respond. The longer it takes a invitee to respond the lower KPI score that supplier would receive.? Another possible KPI measurement or filter once the invitation has been accepted would be the number of days between the date accepted and the event start date, where the supplier has accepted an invitation but has not completed their automated training.

These are not intended to be punitive measures. In most cases suppliers will perform beyond your expectations. Sustainability and quality require measurements regardless of how simple.

If you’d like to learn more about The SafeSourceIt? Supplier Database, please contact a SafeSourcing customer services account manager.

We appreciate and look forward to your comments.

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Supply Chain Management

Wednesday, May 31st, 2017

 

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

There is mounting pressure that distributors need to better align themselves with convenience store retailers to trim costs from the industry?s distribution network.

Cutting costs remains a challenge for convenience store chains big and small. Dealing with distributors and local foodservice providers,?c-store?s are learning ways to grow more efficiently without sacrifice of goods and services.?Some ideas they have implemented include maximizing product turns, reducing out-of-stocks, and removing slow-moving items to make room for better sellers.

It is very important to embrace category management and recognizing the potential of the store by stocking high-margin impulse items like candy and snacks in the highest traveled aisles.

Owners also need to make sure they have the best selling items. The top 50 SKUs, which only represent about six-tenths of 1% of all SKUs in the convenience store, drive 32% of the business. The key is to have a very good focus on the assortment of these core items.

Not Just Cost

Many c-store owners tend to focus on cost rather than all the elements that go into their purchases. This could include the terms they have set up, order quantities, delivery decisions and a host of support services. One of the most successful ways to control?costs is consolidating the number of vendors coming through your store, something 7-Eleven has perfected. They realized they had vendors with over-lapping items. By consolidating them, they reduced costs through volume purchasing with less vendors.

The challenges for convenience store chains and owners will continue but taking the time to evaluate your supply chain, the vendors you do business with and what items sell and which don?t could lead to huge savings.

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.

 

 

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What is the Certified Professional in Supply Management? (CPSM?)?

Monday, May 8th, 2017

 

Todays post is from our SafeSourcing Archives

The Certified Professional in Supply Management? is the qualification that supply management professionals strive to earn. The CPSM? will be relevant internationally and reflect the expanded knowledge, skills and abilities needed to be a successful supply management professional.

Certification for the CPSM is offered by The Institute for Supply Management or (ISM) which was founded in 1915 and is the largest supply management association in the world as well as one of the most respected. ISM’s mission is to lead the supply management profession through its standards of excellence, research, promotional activities, and education. ISM’s membership base includes more than 40,000 supply management professionals with a network of domestic and international affiliated associations. ISM is a not-for-profit association that provides opportunities for the promotion of the profession and the expansion of professional skills and knowledge.

Supply chain workers should be proud of their profession and earning your CPSM is one way to brag about it.

Please contact our SafeSourcing customer services team if you’d like assistance with any of your RFI’s, RFP’s or RFQ’s. It might just get you promoted for making a company changing decision.

We look forward to and appreciate your comments.

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

Friday, May 5th, 2017

 

Today?s post is?from our?SafeSourcing Inc.?archives

One of the many 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.

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