Want real cost controls? Start getting strategic about procurement.

November 20th, 2019

Strategic sourcing achieves better results than tactical sourcing every time.

 

 

Today’s post is by Dave Wenig, Vice President of Sales and Services at SafeSourcing, Inc.

Most will agree that reducing and controlling costs within an organization is important. Certainly, all of SafeSourcing’s customers leverage our services to generate savings and they all do that fairly well. However, just like in many things, the results will vary.

Success in cost control is a spectrum. On the one side, results are good, but may be limited. On the opposite end, the results are spectacular and widespread. As would be expected, SafeSourcing has customers across the entire spectrum. We’re always coaching and pushing our customers to move toward the spectacular savings end of the spectrum.

So, if we identify the spectrum as ranging from “good” to “spectacular,” then what is it that determined where on that scale a customer will fit? One answer is how their organization has approached sourcing with eProcurement. Customers that find good results, meaning they will source some spend and find some savings are typically utilizing eProcurement as a tactical tool. They select an individual category and focus on that alone to find savings. Any use of eProcurement is better than none and their results will be good for that category. This customer will then start to consider what they would like to source next. Again, this approach will deliver good results. We’re always going to try to push this type of customer to do even better and achieve more.

Customers that get closer to spectacular results will invariably have a very strategic approach to sourcing and their approach to eProcurement. As a strategic sourcing company, SafeSourcing is very deeply engaged with these customers to help make sure their results are meeting their objectives. How strategically an organization manages their sourcing will directly correlate to how close to spectacular their results will be. SafeSourcing has a full set of procure to pay solutions and our customers who achieve spectacular results don’t just run RFPs and RFQs. These customers leverage our SafeSpendAnalysis™ to build a roadmap, they utilize our SafeSourceIt™ suite of eRFQx tools to negotiate pricing, they continue that control with our SafeContract™, SafeCatalog™, and SafePO™ tools and more. Customers on this end of the spectrum see results that truly have an impact on the bottom line. The level of cost control available to customers that take this strategic approach, or even part of it, will always be greater than what customers will get with a tactical approach.

Again, with a spectrum ranging from good to spectacular, the point is that participating in eProcurement either with a tactical approach or a strategic approach is better than not using eProcurement. The question an organization needs to consider is; do they want to have good results, or do they want spectacular results? We can’t answer that, but we’ll always try to push them to do more and better.

For more information, please contact SafeSourcing

Sourcing Travel Accommodations part IV of IV!

November 19th, 2019

Ok, amenities are one thing! But and it's a big but...…………………………………………..

 

 

This week’s blog series has been our archives at  SafeSourcing.

During Part III of this post we discussed organizing your data and looking at amenities offerings and programs that when supported by your corporate travel policies drive value and assist in establishing the goals for your event.

Ok, amenities are one thing, but how data relative to individual locations, chain or corporate discounts and rebate programs interact is key to making sure that what looks like value really is.

Today we will be exploring the importance of these additional data elements.

1. Location Rates
2. Chain Discounts
3. Rebate Programs

The Location rate – The most ideal scenario in any accommodations eProcurement process is to negotiate the rate at individual properties based on a spend estimate (usually more than 100 nights a year).  Regardless of what the goal of the project eventually ends up being, being able to focus on the top 8-10 locations where you have significant recurring use  to reduce your rates is something that should be considered as long as you have the estimates to provide the properties; which is not always the case. There are ways to extrapolate this data if it is not yet consolidated that a solutions provider should be able to help you with.

The Chain or Corporate Discount – In many cases, company’s lack the visibility into their accommodation spend to be able to let vendors know much more than the overall amount they spend each year.   There are times in these cases, when a company is beginning to establish its travel policy and tracking mechanism that trying to get a chain discount across all properties may be a good place to start.  Selecting 2 or 3 preferred chains will help you get a good discount and will provide you with partners who can begin helping you track the activity from their side as well.

The Rebate Program – Unfortunately when you can’t provide the level of detail you want to the vendors on the portion of business they stand to gain while at the same time you may even be starting a new travel policy program internally; getting everyone to commit to the project can be difficult.  The vendors don’t want to go out on a limb because they don’t know how much business they are really going to get and the employees may not follow the process because they see no reason to do so.

Establishing an annual cash rebate program with the vendors based on volumes can address both of these issues.  Vendors have the opportunity to commit to additional savings when they get the volume of spend they are seeking and since tracking volume becomes the means by which this rebate is achieved, the employees and company have a strong reason to maintain use of the new processes.

If you do have good consolidated information, there are ways to leverage all three of these data elements in order to optimize your savings opportunities and reward your frequent travelers and traveling vendors at the same time.

Hopefully this four part blog series points out that there are a number of variables (data) to consider when sourcing Hotel Accommodations, individually they all can add value and potentially reduce costs or mitigate increases, combined as a complete strategy where each element is leveraged there is significant potential  for your company.

If you’ve enjoyed this four part post on sourcing accommodations, please pass it on to others that may have interest. If you like more information about sourcing travel related categories like hotel accommodations; please contact a SafeSourcing Customer Service Representative.

We look forward to and appreciate your comments

Sourcing Travel Accommodations part III of IV!

November 18th, 2019

It's critical to assemble your available data and focus on amenities and features in order to drive true value.

 

This week’s blog series is from our Archives at SafeSourcing.

In todays part III we will be exploring the following data elements.

1. The Data
2. Amenities & Features

The Data – After you have established your goals for your events it’s time to review the data you have available to you in order to get your project off the ground. Don’t be disturbed if there isn’t much.  Having no visibility into how many nights you stay at a specific location can certainly make negotiating rates with that location more difficult but not impossible.  In many cases companies have rates established with properties and do not even realize it.  Simply making some phone calls to the hotels near your offices is a simple way to start. You might be surprised with what you have in place currently with these properties.  At the very least a picture of what your accommodation spends as a whole is needed so that the chains and properties know how to provide you with something that is valuable for you and worth their investment. Between these phone calls, some internal surveys and some expense statement reviews, extrapolating your spend is entirely possible.

The Amenities & Features – You may not have a policy that details the amenities a specific property or brand needs in place in order to be a “preferred” site but gathering those details is critical so that you can sort out your true cost profile once the project has been completed.  One property in Phoenix, AZ may provide lower rates than another but may charge for internet access and is not able to provide the free continental breakfast another property with higher rack rates does.  It  may be preferable to conduct an RFI as a precursor to any pricing work that is done so that  your company can understand which properties will fit the criteria you require of a preferred location.

During tomorrow’s final post in this series we’ll be discuss Location Rates, Chain Discounts, Rebate Programs and how to leverage them to your best advantage during your event.

If you can’t wait for tomorrows Part IV or this IV part post and need more information sooner about sourcing travel related categories like hotel accommodations, please contact a SafeSourcing Customer Service Representative.

We look forward to and appreciate your comments

Sourcing Travel Accommodations part II of IV!

November 15th, 2019

Reviewing your policies and goals.

 

This weeks post Sourcing Travel Accommodations part II  of IV  is from our Archives at  SafeSourcing.

In yesterdays  post we discussed the types of data required to effectively negotiate Hotel Stays on behalf of  your company?

Today we will be exploring the following data elements.

1. The  Corporate Travel Policy
2. The goal of your sourcing effort

The Policy – Before anything gets done with a travel related category it may be an appropriate time to revisit the company’s entire corporate travel policy in order to determine if any updates are required.  If you do not have a formal travel policy that covers the entire company, establishing one should the be the first step in this sourcing endeavor.  Details that should be included in this document become the  foundation for the Terms & Conditions that drive as well as the contracts that ensure your results and will also determine how best to set the next step of the process: The Goal.

The Goal – There are generally two kinds of hotel accommodations that companies should gather data for during the eProcurement process. They depend on the structure of your company.  The first is to gain the best rates you can for company associates that travel as part of doing business for your company. These can location specific if used frequently enough or they may be in the form of a program that gets established for all locations within a specific hotel brand. The variety of stay should be dictated by the corporate policy.  The second goal is to secure the best rates and service for a company’s locations or location for their associates as well as vendors and customers visiting your offices.  These two goals can happen independent of each other or as part of the same process.

During tomorrow’s post we’ll discuss additional data elements such as amenities, features and services.

If you can’t wait for tomorrows Part III or this IV part post and need more information sooner about sourcing travel related categories like hotel accommodations, please contact a SafeSourcing Customer Service Representative.

We look forward to and appreciate your comments

Sourcing Travel Accommodations part I of IV

November 14th, 2019

What are the levels of information required to effectively negotiate Hotel Stays for your company?

 

Todays post is from our Archives at SafeSourcing.

Negotiating hotel accommodations for your company can be a tricky business because many vendors will want to understand your goals and your projected spend with them before they will seriously consider awarding you aggressive discounts.  Couple this with the fact that many franchise properties like to negotiate their own rates independent of their national brand and you have what appears to be a complex low return category. When In fact, this not the case.

Over the next several days we will be taking a look at some of the data companies require before they will seriously consider awarding you aggressive discounts.

Over the course of this post series we will be exploring the following data elements.

1. The  Corporate Travel Policy
2. The goal of your sourcing effort
3. The Data
4. Amenities & Features
5. Location Rates
6. Chain Discounts
7. Rebate Programs

If you can’t wait for tomorrows Part II or this IV part post and need more information sooner about sourcing travel related categories like hotel accommodations, please contact a SafeSourcing Customer Service Representative.

We look forward to and appreciate your comments

Fall is falling – You should already be deep into your procurement planning for 2020!

November 13th, 2019

Now that fall is approaching its midpoint and the holidays are around the corner, how are you planning for 2020?

 

Today’s post is from the archives at SafeSourcing.

Procurement professionals our success is dependent on how well we are continuing to think forward to the coming months so that we are prepared when the business is ready to go out and make spend decisions.  This usually can’t be done in just a few weeks, it requires looking months in advance at new projects, new spends and existing contracts and reviews of the market for the best offering.

Typically this type of planning involves sitting down with your department heads to understand what their budgets, spends, and plans for the business are in the future so that you can get ahead of what is coming.

With fall just beginning and the holiday season right around the corner, now is the time to begin scheduling those sessions with the departments and looking at the contracts that are due to expire in the first and second quarter in 2020.  Coordinating these meetings can take time and the larger your company, the more lead time you are likely to need to get on the appropriate peoples’ schedules.

Waiting until after the first of the year to do this when budgets have officially been set may be too late to get this done, as people are generally coming back from the holidays and catching up on the other items that have been awaiting their attention.  It can be the end of January or early February before you get your meetings scheduled which will likely mean you will lose an opportunity to help them source some items in the first quarter.

Get your meetings scheduled by the end of November at the latest.  Using a three step approach like the one followed by SafeSourcing Managers, look for those departments which have a higher number of easy, high opportunity categories.  This includes spends with fast approaching contract deadlines.  Also look at those departments that have more complex projects but with high dollar spends followed by the departments involving the most complex spends but with high opportunity.  This last group can generally take more time to gather information and strategize so make sure you include time with these departments to get ahead of the projects.

Going through the projects these departments have planned for 2020 is a great exercise in understanding how the procurement department can help them select the right products and services for your company providing better overall value.

For more information on scheduling your internal department head planning sessions or for templates you can use during those sessions to help collect the data you need, please contact a SafeSourcing Customer Service Representative.

We look forward to your comments.

CIO Applications Magazine Honors SafeSourcing

November 6th, 2019

SafeSourcing Inc. Honored as One of the World ‘s Top 10 Auction Platforms.

 

SafeSourcing Inc., a leading eProcurement company offering a complete Procure to Pay suite of applications, has been recognized as one of the World‘s top auction application companies by CIO magazine.

CIO magazine has listed SafeSourcing, Inc. as one of the top ten auction platforms in its recent magazine edition. The article recognizes SafeSourcing as being a one-stop e-procurement and sourcing center, striking a balance of quality, affordability, product, and service.

“A strategic sourcing firm, SafeSourcing is at the forefront of offering a full suite of procure-to-pay tools under the SafeSourceIt™ banner which helps in reducing costs and improving efficiency” ~CIO magazine

CIO sat down with SafeSourcing CEO, Ronald D. Southard, to discuss the company’s value proposition, solutions, customer base, and future plans. In addition, the featured article elaborates on how SafeSourcing plays a role in e-procurement and how it accelerates efficiency and innovation.

SafeSourcing, Inc. provides cost effective tools under the SafeSourceIt™ product family that allows companies to dramatically reduce cost of goods, capital spending, and expenses in a timely manner while also reinforcing environmental and product safety programs. Focus is placed on a company’s entire spend for all products and services.

SafeSourcing’s early stage client engagement is specifically focused on cost reduction through the use of a white glove service based  on a detailed six step process using the SafeSourceIt™ e-RFX application suite.

Please visit www.safesourcing.com in order to  learn more.

 

How are you attacking your shrink?

October 31st, 2019

You're probably watching those tried and true KPI’s and building cases huh? Good Luck with that!

 

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

Shrink never goes down. Read all of the trade rags and the numbers stay pretty constant even with the newest technologies and services offerings. And, turnover is as high as ever so unless you have great awareness campaigns in place problem will just recycle itself.

If you want to have a huge impact and have it immediately, clean out those back rooms and move your overstock items using a forward auction. We all know that with all of the new products, store resets, aged inventory and poor sell through that most backrooms are full of items you did not receive money for. That is also shrink!

The first benefit if this strategy is it will force you to look for it. The second benefit once you find it is that it will reduce your inventory shrink.

Why is it that we never hear of retailers running forward auctions? There are dozens of sources waiting to buy your overstock which all retailers know will reduce shrink and improve bottom line profitability.

If you go to any internet search engine and type in the term overstock, the data returned is in the millions of pages. Many of these links are locations  for Business to Business (B2B) and Business to Consumer (B2C) companies that will gladly agree to participate in e-negotiation events in the form of a forward auction to purchase your overstock or liquidated products for resale through their on line offerings.

Online forward auctions are an ideal way to get the best price for capital equipment, materials, overstock and services you may want to sell, such as when you need to liquidate excess inventory.

There are two basic types of forward auctions. The first is a liquidation auction where sellers are reducing inventory from overstock or liquidation and buyers are seeking to obtain the lowest price for items they have an interest in for resale and other purposes. The second type is more of a marketing auction where sellers are trying to sell unique items and buyers wish to obtain unique items. This is typical of an eBay type of offering.

Much of retail shrink happens in the back room or receiving area of retail stores. It just so happens that this is also the location of much of the overstock in the retail community. Much of this product sits there month after month resulting in significant margin hits to quarterly and annual earnings and as such to a company’s stock price.

Contact a SafeSourcing customer services representative to see how we can help reduce your overstock and shrink with forward auction tools.

We look forward to and appreciate your comments.
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Nested if/then Statements for Everyday Use

October 30th, 2019

Logic that goes beyond the spreadsheet....

 

Today’s post is from our  SafeSourcing Archives

Most problems don’t have solutions as simple as yes or no, such as “if A, then ‘yes’. If B, then ‘no’”. Solutions are more often evaluated through multiple sets of dependencies, such as “if A+B is greater than C, then find the average of X-Z”. Of course these statements aren’t intuitive, so if we don’t understand how to use them formally in logic equations or computer code, we are much less likely to get them right in real life situations. So here’s a crash course in Excel “IF” statements:

The basic description of the “IF” function is “If something is True, then do something, otherwise do something else”. To see it in action, start with typing “=IF” in an Excel cell of your choice. You’ll see Excel suggest the full formula as “=IF(logical_test, [value_if_true], [value_if_false])”. Each of those statements within the parentheses is a variable that does something specific, and they have to be separated by a comma so that Excel knows when you are entering a new variable. Here is how each variable behaves within the function:

  • “logical_test”: This means there must be an active function. Let’s go with an example of “A1>B1”.
  • “value_if_true”: Whatever value you include in this variable, will populate the cell you’re programing the formula for, if the “logical_test” variable is true. Such as if A1 = 2, and B1 = 1.
  • “value_if_false”: Whatever value is in the false variable, will be populated if “logical_test” is untrue. Such as if A1 = 1 and B1 = 2.

So if we insert some example variables into the formula like so: “IF(2>1, “Yes”, “No”)

This function would insert a “Yes” into the cell being programmed, and is one of the more simple ways to use the function. However, you can swap any of the aforementioned variables for other formulas as well. This is called “nesting”.

For example, you could write a formula like this: “=IF(K5<K6,”YES”,IF((COUNT(H7:H10>2)),”HIGH”,”LOW”))

Let’s describe what this function is doing in sentence form, with a context of evaluating vendor proposals: If Vendor 1’s cost is lower than Vendor 2’s cost, enter “YES” into the cell, if Vendor 1 is not lower than Vendor 2, then if the number of DC’s the new vendor carries is greater than 2, enter “HIGH” into the cell, otherwise enter “LOW” into the cell. This tells me either to select Vendor 1, or to evaluate several other dependencies to make a final decision.

This level of specificity is not normal in everyday speech, but is absolutely critical in procurement. If you have a vendor proposing an agreement, a full evaluation of the value proposition can’t be based on just one variable. Practicing this and other logic functions in Excel and other tools is an excellent way to hone your ability to evaluate complex procurement problems.

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.

Balance the power in your negotiations

October 29th, 2019

Executing your procurement strategy when negotiation power seems out of balance.

 

 

Today’s post is by Dave Wenig, Sr. VP of Sales and Services at  SafeSourcing.

Dave considers how best to navigate a purchasing decision when external factors are the key drivers.

There are times when a purchaser may feel as though the balance of power in a negotiation is stacked in favor of the seller and factors such as limited sources of supply or external factors are strongly influencing the decision.

Let’s revisit a situation that retailers were facing a couple of years ago!

Retailers had been navigating through the process of implementing EMV solutions and were expected to have completed this process by October of 2015 for their in-store POS terminals. EMV, which is short for Europay, MasterCard, and Visa, is a standard for payment cards that is meant to be a more secure replacement than the magnetic stripe cards that we’re used to; although these chip cards do still have the magnetic stripes.

Their next deadline for EMV compliance was to affect the forecourt. For gas station retailers, the deadline to implement EMV capabilities at the pump was October 2017. After the deadline, the liability for fraudulent transactions will shift to the retailer if the retailer is not leveraging EMV. What this means for the retailer is that they are faced with a significant purchase with what seem to be limited options for implementation based on their existing equipment and other factors.

When faced with a decision such as this, it’s helpful to have a partner with the tools and experience to help guide you through the decision process. This is particularly important when your options seem limited or controlled by external factors like the EMV deadlines. Experience provides the confidence and the competence to develop and execute your commercial negotiation strategy. Your partner’s tools provide the capability and the leverage to balance the power in the negotiation.

In the case above, many companies contacted SafeSourcing for assistance.

At SafeSourcing we are devoted champions of saving money on just about any category that you can come up with. In fact we probably source it more often than your buyers or category managers do. All of our team member at SafeSourcing, would be excited to discuss how adding e-Procurement to your sourcing projects can improve your negotiation process. For more information, please contact a SafeSourcing representative.

We look forward to your comments.