Archive for November, 2008

Wal-Mart issues supplier mandates. What can other retailers do to keep up?

Wednesday, November 5th, 2008

When we launched SafeSourcing Inc, beyond quality e-procurement tools, product safety and a social consciousness relative to the environment were and continue to be two important key stones to building this company.

In this case, we may be specifically discussing Chinese suppliers as it relates to Wal-Mart, but this is not new information for the world?s largest retailer by revenue. Last year they held suppliers accountable to level one certification of the Global Food Safety Initiative or GFSI by July of 2009.

According to the Wall Street Journal on October 22nd, during its global supply chain summit held in Beijing, Wal-Mart would indicate that it is also focusing on environmental and labor laws in its Chinese locations in addition to their safety focus.

It is well known that Wal-Mart is one of the most technologically advanced companies in retail if not the world. So when Wal-Mart makes claims as to what it will do, suppliers generally line up to comply. The issue this creates for other retailers is that without the tracking technology a Wal-Mart has they can not keep up with what suppliers have done or plan to do to support the many emerging standards. And more importantly, retailers do not have a readily available view of alternative sources of supply where they might take their business if these important conditions are not met by their present suppliers.

Wal-Mart is also expected to require it?s suppliers to provide the name and location of every factory they use to make their products. As a by product, this is a great step to support 10 + 2 and one forward one back traceability for products that leave China particularly for North America.

An alternative for North American based retailers is the supplier databases that are offered for their use by supply chain; spend management and other e-procurement companies with whom they already do business. At SafeSourcing, our North American Supplier Database includes over 240,000 retail suppliers that are held accountable to twenty eight safety and environmental certifications such as Keep America Beautiful, SQF, Eco-Logo and GFSI. These tools should be made available via cloud computing or in the form of software as a service (saas) on a subscription basis for both individual searches and periodic use. If your provider can not demonstrate these tools, it might be time to look elsewhere.

We look forward to an appreciate your comments

Part II of II. The Word “CHANGE” Is Not Only Applicable to Politics’ These Day’s!

Tuesday, November 4th, 2008

The impact of the results discussed during Part I of this blog post on Monday November 1st suggests the following.

What the results discussed during yesterdays blog post indicate is that World Class Companies are adapting their procurement practices in accordance to lowering their cost of goods while simultaneously adjusting other costs resulting in savings directly to the bottom line. We are not advocating a lesser workforce to aid in the bottom line savings, however we are suggesting that more and more responsible professionals within procurement organizations need to acknowledge that change is a coming and they need to adapt to e-procurement tools such as Requests for Information or RFI’s, reverse auctions and user friendly reporting tools.

One of the most frustrating daily activities for most e-procurement professionals is winning a new opportunity via the direction of a compaies CEO or CFO and then getting nothing but push back from buyers within the organization when tools such as reverse auctions are mandated. Now we realize that the pushback can mean many different things….does the responsible buyer not have product specifications, does he or she not know more than one or two vendors that can provide the product or service to his or her company… or is he or she simply resistant to change and unwilling to change the way he or she has procured the goods or services for the last 25 years?

The benefits to running reverse auctions are many and far outweigh continuing to do the same things the same way and expect different results. These benefits include but are not limited to the following:

– Maximize your visibility to additional suppliers

– Make better informed decisions

– Reduce sourcing time

– Lower cost of goods

– Streamline internal processes

– Excellent medium for aggregating

– Increased pricing visibility in the marketplace

– The retail industry is actively using this tool and improving
Competitive position

Make no mistake, this blog post is not a way of pointing a finger at any particular organization, however there is a common trend that when an e-procurement program is adapted within an organization it is very predictable that resistance to change will emerge and remain until someone is strong armed by senior management and the results prove that support for this process is best for the company. E-procurement tools such as reverse auctions are a different way to gather pricing in a quicker fashion, from more vendors, with your specifications and timelines with results typically 18 to 20 percent less in cost of goods which drops directly to your bottom line.

Change is uncomfortable but inevitable and requires acceptance in order for companies to stay competitive and retain the market share that one so diligently worked for in the past!

We appreciate and look forward to your comments.

Part II of II. The Word ?CHANGE? Is Not Only Applicable to Politics? These Day?s!

Tuesday, November 4th, 2008

The impact of the results discussed during Part I of this blog post on Monday November 1st suggests the following.

What the results discussed during yesterdays blog post indicate is that World Class Companies are adapting their procurement practices in accordance to lowering their cost of goods while simultaneously adjusting other costs resulting in savings directly to the bottom line. We are not advocating a lesser workforce to aid in the bottom line savings, however we are suggesting that more and more responsible professionals within procurement organizations need to acknowledge that change is a coming and they need to adapt to e-procurement tools such as Requests for Information or RFI’s, reverse auctions and user friendly reporting tools.

One of the most frustrating daily activities for most e-procurement professionals is winning a new opportunity via the direction of a compaies CEO or CFO and then getting nothing but push back from buyers within the organization when tools such as reverse auctions are mandated. Now we realize that the pushback can mean many different things?.does the responsible buyer not have product specifications, does he or she not know more than one or two vendors that can provide the product or service to his or her company? or is he or she simply resistant to change and unwilling to change the way he or she has procured the goods or services for the last 25 years?

The benefits to running reverse auctions are many and far outweigh continuing to do the same things the same way and expect different results. These benefits include but are not limited to the following:

? Maximize your visibility to additional suppliers

? Make better informed decisions

? Reduce sourcing time

? Lower cost of goods

? Streamline internal processes

? Excellent medium for aggregating

? Increased pricing visibility in the marketplace

? The retail industry is actively using this tool and improving
Competitive position

Make no mistake, this blog post is not a way of pointing a finger at any particular organization, however there is a common trend that when an e-procurement program is adapted within an organization it is very predictable that resistance to change will emerge and remain until someone is strong armed by senior management and the results prove that support for this process is best for the company. E-procurement tools such as reverse auctions are a different way to gather pricing in a quicker fashion, from more vendors, with your specifications and timelines with results typically 18 to 20 percent less in cost of goods which drops directly to your bottom line.

Change is uncomfortable but inevitable and requires acceptance in order for companies to stay competitive and retain the market share that one so diligently worked for in the past!

We appreciate and look forward to your comments.

Part I of II. The Word “CHANGE” Is Not Only Applicable to Politics’ These Day’s!

Monday, November 3rd, 2008

As most everyone is well aware, the days ahead are filled with lots of rhetoric regarding “change” politically in both Washington as well as in our local elections.

I asked Alex Borbely SafeSourcing Inc. Vice President of Sales and Services to collaborate with me on a blog post as to his thoughts on the use of e-procurement tools in retail and what may be impacting their use in the retail market. Alex chose to speak about change; which became a great collaborative subject for this blog post.

Regardless of the elections outcome, I would bet that “Change” is something that we’ll all become more accustomed as the economic times require all of us to realign ourselves with reality. Reality can mean a variety of things to all of us, smaller homes, less traveling around town in our cars, and even less extravagant dinners on Saturday nights!

The concept of “change” also applies to what we all do in our daily work lives as we realign ourselves as to how to procure goods and services whether for resale or not for resale. Procurement today can mean many different things depending on who we are speaking with at the time.

One of my favorite Blog posts for e-procurement is Spend Matters where Jason Busch recently wrote “According to a recent press release on the subject of a Hackett Research Alert , Hackett’s research shows that world-class organizations, “now spend 22% less than typical companies on procurement operations (.64% of spend for world-class companies versus .82% for typical companies), and operate with 37% fewer staff (48.4 per billion US$ of spend for world-class companies versus 76.4 for typical companies). World class companies also generate 129% higher spend cost savings, including reduction and avoidance while also delivering greater stakeholder satisfaction and support for initiatives in sustainability, innovation, working capital improvement, and other areas. At a typical Global 1,000 company (with annual revenue of $22 billion and annual sourceable procurement spending of $8.9 billion) would have more than $16 million in incremental annual savings on procurement operations, and over $263 million in additional annual spend cost savings.” What does this mean to the retail market? Please visit Part II of this blog post tomorrow .

As always we appreciate and look forward to your comments.

Part I of II. The Word ?CHANGE? Is Not Only Applicable to Politics? These Day?s!

Monday, November 3rd, 2008

As most everyone is well aware, the days ahead are filled with lots of rhetoric regarding ?change? politically in both Washington as well as in our local elections.

I asked Alex Borbely SafeSourcing Inc. Vice President of Sales and Services to collaborate with me on a blog post as to his thoughts on the use of e-procurement tools in retail and what may be impacting their use in the retail market. Alex chose to speak about change; which became a great collaborative subject for this blog post.

Regardless of the elections outcome, I would bet that ?Change? is something that we?ll all become more accustomed as the economic times require all of us to realign ourselves with reality. Reality can mean a variety of things to all of us, smaller homes, less traveling around town in our cars, and even less extravagant dinners on Saturday nights!

The concept of ?change? also applies to what we all do in our daily work lives as we realign ourselves as to how to procure goods and services whether for resale or not for resale. Procurement today can mean many different things depending on who we are speaking with at the time.

One of my favorite Blog posts for e-procurement is Spend Matters where Jason Busch recently wrote ?According to a recent press release on the subject of a Hackett Research Alert , Hackett’s research shows that world-class organizations, “now spend 22% less than typical companies on procurement operations (.64% of spend for world-class companies versus .82% for typical companies), and operate with 37% fewer staff (48.4 per billion US$ of spend for world-class companies versus 76.4 for typical companies). World class companies also generate 129% higher spend cost savings, including reduction and avoidance while also delivering greater stakeholder satisfaction and support for initiatives in sustainability, innovation, working capital improvement, and other areas. At a typical Global 1,000 company (with annual revenue of $22 billion and annual sourceable procurement spending of $8.9 billion) would have more than $16 million in incremental annual savings on procurement operations, and over $263 million in additional annual spend cost savings.” What does this mean to the retail market? Please visit Part II of this blog post tomorrow .

As always we appreciate and look forward to your comments.