Archive for the ‘Supply Chain Procurement’ Category

Is your procurement team keeping up with the times?

Friday, May 1st, 2015

 

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

Why not apply the same strategy that you would for your personal health when reviewing your first four month e-procurement results.

Listed below  are  12 questions that companies can ask themselves with the resulting answer going into either an assets or liabilities column in order to provide a semi-annual health check of your e-procurement progress or lack there of. Hopefully the former.

1. How many new suppliers were reviewed to provide new or existing products and services during the past four months?
2. How many of those suppliers were actually selected to provide new products or services during the past four months?
3. How much of your total spend was assigned to e-procurement tools such as RFI’s RFP’s and Reverse Auctions or RFQ’s.
4. How much of your private label spend was assigned to e-procurement tools such as RFI’s, RFP’s and Reverse Auctions or RFQ’s.
5. How much of your services spend was assigned to e-procurement tools such as RFI’s, RFP’s and Reverse Auctions or RFQ’s.
6. How much of your supplies spend was assigned to e-procurement tools such as RFI’s, RFP’s and Reverse Auctions or RFQ’s.
7. How many of your category managers and or buyers have on line accessible product and services specifications for each product or service they buy.
8. How much time is now being invested in gathering existing or new product specifications?
9. How much were your total cost of goods reduced during the last 4 months through the use of e-procurement tools.
10. How much was your gross margin improved by reduction in cost of goods during the last 4 months as a result of using e-procurement tools.
11. How much time do your category managers and suppliers spend doing supplier research weekly.
12. How many suppliers have been contributing greater than 75% of specific category volume for a period of greater than 5 years?
13. Of those suppliers, how many provide multiple products and or services to your company?
14. Are you satisfied with the product safety of all products from all sources?
15. How much was total company net profit improved by the use of e-procurement tools last four months?

It’s important to remember with eight months left to go in the year that if a company assigns just ten percent (10%) of their cost of goods to e-procurement tools, net earnings can improve by up to 82% or more. You can not accomplish this without advanced tools that extend your productivity.

If you don’t believe it, email me at ronsouthard@safesourcing.com and let me prove it to you. you won’t be sorry!

We appreciate and look forward to your comments.

Successful supplier relationships

Thursday, March 19th, 2015

 

Today’s post is by Tyler Walther, Account Manager for SafeSourcing

When searching out new suppliers, or assessing the performance of current suppliers, companies should consider many aspects when evaluating their options.  Several factors should be taken into consideration, some listed below:

  • Commitment to quality—Product quality is normally regarded as the most critical factor when selecting a supplier.  Specifics in this area  include the suppliers’ process control methods, their quality control certifications, its approaches to preventive maintenance, and its methods of equipment calibration
  • Communication—Suppliers that do not maintain a policy of open communication—or even worse, actively use deceptive tactics—should  always be avoided.  The issues of dealing with these companies will normally result in negative effects. Additionally, allowance of such tactics will have an adverse effect on internal staff.
  • On time delivery—Businesses planning is frequently forecasted on schedules, which in turn are based on receiving shipments at agreed-upon times.  When those shipments are late, business plans suffer. This can be particularly problematic if the supplier is inattentive or late in reporting the delay.
  • Financial stability—Businesses that allot large amounts of money for purchasing materials often prefer to contract deals with suppliers that are financially stable.  These relationships not only bring security, but they allow companies to learn about the other and gain a better understanding of each business’s needs, wants, operating processes, and planned goals.
  • Flexibility and special services—Many purchasers express their thankfulness for suppliers that take extra steps to satisfy their customer’s needs.  These benefits can range from after-hours availability to training or inventory support.
  • Ability to offer technical assistance—Suppliers with worthy technical support capabilities can be quite valuable to purchasers, providing them with substantial savings in both cost and quality.

For more information on how SafeSourcing can assist you in exploring your procurement solutions for your business, 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.

Successful supplier relationships

Monday, March 9th, 2015

 

Today’s post is by Tyler Walther, Account Manager for SafeSourcing.

The relationship between a supplier and buyer can be multifaceted with each party wanting to maximize its time, resources and cash investment. Often times these may be competing priorities that can add stress to the relationship.

What’s required to sustain a mutually beneficial relationship is an understanding of each other’s business needs. That does not necessarily mean driving for the lowest price but actually realizing that the success of one partner helps the success of the other.

Supplier relationships are different from simple purchasing transactions in many ways.  First, there can be a sense of commitment to the supplier. For example, if a supplier sells farm feed, he can feel confident that the buyer will use him the next time the company he represents requires a new shipment of farm feed. Another element of these supplier relationships is advanced planning. Buyers don’t just communicate with suppliers when a purchasing need arises; they also contact them in order to discuss their future needs and to determine how best to fulfill those needs by working cohesively.

One key is a supplier’s knowledge of the buyer’s business. When suppliers are viewed as commodity providers, they generally don’t take the time or are not given the opportunity to learn the details of the business or its future business strategy. Consequently, suppliers that are deemed to be partners are encouraged to become knowledgeable about the company, its procedures, its products, and its goals. The result is greater buyer satisfaction with the services provided by the supplier.

Overall, suppliers and buyers are better served when they come together to form strong, mutually beneficial, secure business relationships. When these relationships exist, they can drive the growth and profitability of both organizations and prevent purchasing difficulties.

If you’d like to learn more, please contact a SafeSourcing Customer Services Account Manager.

We look forward to and appreciate your comments.

 

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

Wednesday, January 14th, 2015

 

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?

Tuesday, July 1st, 2014

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

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.

Let’s play supplier poker!

Friday, June 20th, 2014

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

If this were a real poker game, I’d raise our big supplier data versus your existing supplier data.

Locating, managing and updating supplier information that companies choose to do business with has never been more difficult. How many companies that you used to do business with 4-5 years ago are no longer in business? How many new companies have taken their place? I already know the answer you are going to give me. It’s I don’t know.

We keep hearing about big data. With new regulatory requirements emerging daily, economies failing, the supply chain shrinking in some places and expanding in others,  changing  safety factors and  environmental factors ( think LEEDS), detailed supplier information and traceability are but a few of the issues that require regular maintenance in order to mitigate a company’s risk.

Solution Providers like SafeSourcing that provide supplier databases (SafeSourceIt™) that are part of automating the procurement process, need to step up and make sure that their data support these changes on a regular basis to the greatest extent possible by providing tools that interacts with both regulatory agencies and suppliers to insure consumer safety and environmental impact as more new sources of supply and new products enter the supply chain on a daily basis.

Actions that solution providers can take should include but are not limited to:

1. Monitor daily alert data as to product recalls and safety warnings.
2. Trace warnings back to the original source of supply automatically and maintain history.
3. Require that suppliers meet certain safety certifications in order to participate in their database.
4. Require that suppliers meet required environmental certifications or programs in order to participate in their database
5. Provide a regular purge of suppliers that do not comply with necessary standards.
6. Validate the entire database regularly for companies no longer in business
7. Adhere to a strict RFI process for new suppliers requesting participation in their database.
8. Provide a rating system for suppliers that are offered to companies as new sources of supply.
9. Monitor regulatory agencies such as ISO for new standards and include them as further requirements in supplier databases.
10.Conduct on going category research for evolving sources of supply.
11.Compare your best customers GL to your database for additions deletions.

Ask your solution provider what their process is to grow manage and maintain their supplier database for your benefit.

If you’d like more information on the SafeSourceIt™ Supplier Database of over 427,000 cleansed global sources of supply, please contact a SafeSourcing customer services account manager.

We look forward to and appreciate your comments.

Lean business practices create a weighty issue.

Tuesday, May 6th, 2014

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

This author tires of the desire of businesses that are trying to reinvent themselves and in so doing constantly coming up with new buzz words, industry terms and business jargon in order to try and prove that they are thinking differently and as such should be trusted to be on the right path. Maybe their original business plan was just flawed and they are not deserving of our trust.

Lean in any functional area of a business simply means producing more or getting more done with fewer resources. I’m not sure this is a great message for companies that are just launching, trying to grow or improve. If you’ve been around for while, and your customer reads between the lines properly, this may just mean that you did not plan your launch properly or react properly to market indicators in the past.

We all know that lean practices were originally a move to reduce costs in the manufacturing process and since it worked for manufacturing where we are typically talking about thousands if not millions of pieces and parts, other companies began to think why not for our business. As such let’s apply the term lean to the supply chain or the procurement space. Any one that knows the procurement space already understands the lack of resources.

The goal of every business should be to provide the end user or customer with what they want or what you have promised them at a fair price. If you do so, that customer and others that hear about that customers experience should buy more. When this happens, if the business plans appropriately they should grow and grow profitably. And this should create new and sustainable jobs. So, how is this any different than the way businesses were run 50 years go or even 100 years ago? The truth is that it’s not.

The decision to not hire, to try and do more with less and to reposition resources rather than firing someone is a better way to run a business. Unfortunately they do not teach this in business school. This author has been through many mergers, acquisitions, downsizings and the like over a lengthy career. One thing you can always count on in these scenarios is let’s cut expenses. You can call it lean, but it’s not.

So, let’s not hide behind the term lean or other business jargon or buzz words.

If you’d like to learn more about how SafeSourcing can help you reduce costs without reducing headcount, please contact a SafsSourcing Customer Services Account Manager.

We look forward to and appreciate your comments.

The Snow Affect

Monday, March 3rd, 2014

Today’s post is by Mark Davis; Sr. Vice President and COO at SafeSourcing.

The winter of 2013-2014 will rise to new heights after the latest storm ravages the entire country.  The full effects of this winter will not felt in their entirety until later this year but reports in some areas are already known and will begin to change the procurement landscape before the winter is even over.

Logistics Availability – Recent studies and statistics have reported that the availability of Third Part Logistics (3PL) companies to handle the shipping demands of their customers is already starting this year with an alarming trend.  The supply of vehicles to handle shipments is grossly inadequate compared to the need.  As with any situation where the demand outweighs the supply the prices will not only rise but availability to even cover some of these shipments is suspect.  This affects when product arrives to a location causing a ripple affect across the supply chain.  With temperatures dropping so low, the option of using dry van vehicles in the winter to keep things cool has gone away as product in extreme cold can be damaged in the same way that heat can in the summer.  This has caused an increase in variable temperature equipment that has far outpaced the supply for this time of year.

Adjusting to buyer patterns – It is no secret that harsh weather not only affects when and if we are buying, but also what we buy.  Studies such as the one by Vikram Somaya, have analyzed weather and consuming buying data to develop correlations between what people buy and the weather.  This idea of weather changing buying patterns creates serious impacts in the business world as products with inventories reflecting normal weather go untouched while other products are in high demand and quickly out of stock (a retailer nightmare).  On top of the changes in buying, many parts of the country are faced with consumers staying in not purchasing anything.  Restaurants sit empty, stores void of shoppers and state and local governments missing millions of dollars in tax revenues.  Looking at historical trends and missed opportunities will allow businesses to more accurately create demand forecasts and contingency plans for supply if/when the weather goes bad.

Personnel Issues – One other problem area that comes from severe weather is the affect it has on personnel, not only within a company but within the suppliers and vendors that company does business with.  The world has become a much more “remote capable” place in which to operate but winter storms still affect the quality of work and availability for many people and can still result in power outages that bring work efforts to a standstill.  While businesses may not be able to control power outages or employees that are physically unable to get into work from their side or their suppliers side, they can control the urgency with which they address their projects in advance of inclement weather.  This means that on a Friday afternoon before a big potential storm they may stay an extra hour or two to ensure they work with everyone they can to be ready for potential bad weather instead of waiting and getting stuck with the effects of bad weather. 

Severe weather is a part of the world we live and out of our control but steps can be taken to minimize the effects those storms have on a business and supply chain.  For more information on how SafeSourcing can assist your team with planning for these occurrences 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.

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

Tuesday, November 19th, 2013

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 week ending today the 19th in Chicago  presented 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.

You might think that suppliers understand that a reverse auction is a great opportunity for new business.

Friday, November 15th, 2013

The easiest way to do this it to keep the communication open friendly and non adversarial. At SafeSourcing we have a training class for this that we have with our customers and for all new associates as the join our company.
A friend of mine that is a manufacturer said it this way. ?Openly communicate with our supplier?s because their relationships are important to us. Make sure they understand everything and are comfortable with it. Make sure they have no lingering questions.

Here although not all inclusive is a list of sample questions one might consider when inviting a supplier as a new participant.

1.?Does the supplier understand that there is no cost to them to participate?
2.?Do they understand they will be trained at know charge?
3.?Do they understand event timing and requirements?
4.?Does the supplier understand the terms being used and how they apply to a reverse auction event such as?
a.?Reserve Price
b.?Low Quote Indicator
c.?Max quote
d.?Funds
e.?Terms & Conditions
f.?Notes
g.?Extensions
h.?Matching quotes
i.?Event? rules
j.?Product specifications
k.?Samples
l.?Award of business
m.?Letter of Intent
n.?This is an opportunity for new business
o.?Event communication strategies

At the heart of it, it comes down to something we all know but don?t always practice and as such negatively impacts the sustainability of processes that just make good sense. That would be open clearly articulated communications.

If you’d like to know why SafeSourcing has a customer satisfaction rating greater than 99%, please contact a SafeSourcing customer services account manager

We look forward to and appreciate your comments.