Archive for the ‘Supply Chain Procurement’ Category

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

Friday, November 29th, 2019

 

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.

Retailers should have continuing success when re-running prior e-procurement events.

Monday, August 12th, 2019

 

Today’s is a short post from Ron Southard, CEO at SafeSourcing in response to a customers question.

There is a proper way to insure the sustainability of your strategic sourcing or reverse auction events going forward.  Since you have already conducted or should have conducted your detailed discovery and analysis, a robust supplier database should permit you to do the following.

1. Conduct a detailed supplier discovery
a. Rank suppliers by
i. Size
ii. Experience
iii. References
iv. Environmental certifications
v. Safety Certifications
vi. Coverage area
2. Develop a three year supplier game plan
a. Develop a three year time line  for all categories
b. Identify suppliers for each event over the three years
c. Develop a three year supplier rotation schedule for those suppliers.
3. Role play internally  each year for a test category
a. Ask the following questions
i. Who will you invite and why
ii. Keep in mind the unique benefits of distributors and manufacturers
iii. Discuss award the business strategies
iv. Review alternative scenarios
v. Review impact on non awarded suppliers
vi. Determine which suppliers will be invited back and why
vii. Determine what new suppliers from your database search will be  invited next year.

If you’d like some help building this into a process that will work over and over again, please contact a SafeSourcing customer services representative.

We look forward to and appreciate your comments.

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

Wednesday, August 7th, 2019

 

Todays repost is fro Ronald D. Southard, CEO at SafeSourcing Inc. in 2014 and still relevant today.

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? If you’d like some guidance before you just jump in and get overwhelmed, please contact a SafeSourcing Customer Services Account Manager.

We look forward to and appreciate your comments.

Reverse Supply Chain Management or Reverse Logistics!

Friday, July 12th, 2019

 

Today’s re-post is from our SafeSourcing Archives.

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.

Effective Supplier Data Management Improves Procurement Process

Thursday, July 11th, 2019

 

This may be old, eight (8) years in fact. Its still no less true today then it was then.

The following excerpt is from the above titled article.

There is more to an effective e-procurement program than cost reduction.

While buyers frequently record cost reductions in the range of 30% to 40% when utilizing an e-procurement or reverse auction process, the issues of quality and performance cannot be overlooked.

The foundation for successful e-procurement is the supplier database
that has been developed and is maintained by the e-procurement service provider. Significant time and capital investment goes into the development of an effective supplier database. It provides the buyer with a recognizable advantage in terms of classification of supplier capabilities, historical performance and the quality of the products provided.

The scope, accuracy and functionality of the supplier database are critical components for buyers when using e-procurement. These elements allow buyers to identify the best sources of supply quickly and cost-effectively, oftentimes uncovering alternative sources that were previously not even considered. This is one of the major advantages of including the services of an online reverse auction service provider like SafeSourcing in the procurement process.

Supplier data management is an excellent example of pairing technology advancements with intellectual property to produce an effective, economical support tool that benefits both suppliers and buyers – better pricing,better quality and better sources of supply.

Click here in order to view the entire article.

We look forward to and appreciate your comments.

Understanding the Relationship Between Procurement and Marketing

Thursday, February 7th, 2019

 

Todays post is from our SafeSourcing Archives

The relationship between a retailer’s Marketing and Procurement Departments has been one struggling to maintain cohesiveness in many companies for quite some time.

While the Marketing team is continually trying to find creative and cutting-edge ways to increase sales within a retail organization, Procurement is constantly looking for ways in which to not only reduce costs, but find the best fit of suppliers with their company.

In many cases, marketing will expend a good deal of effort to find vendors to work with them on projects that when turned over to the procurement team can’t even be considered because their price is too high.  In the end this costs the company money, creates continued division between departments, and causes unnecessary lost time and sales.

Studies and reports have shown, and we at SafeSourcing agree, that the involvement of the Procurement department, even at the most basic level, into marketing projects can reap huge benefits as both departments work toward finding partners in their suppliers to achieve both their marketing and procurement objectives.

Retailers whose Marketing departments can leverage the database of the Procurement department’s suppliers will find a positive effect on their spend while achieving the ROI they are looking for on their campaigns and will create a better team environment within the company to achieve like-minded goals.

For more information about how the SafeSourcing database of known suppliers can help your company’s marketing and procurement departments work together to achieve these goals, please contact a Customer Service representative today.

We look forward to and appreciate your comments.

HAPPY NEW YEAR 2019 from Safesourcing; Your GLOBAL SOURCING PARTNER!

Tuesday, January 1st, 2019

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.

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.

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.

 

 

 

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.