Speaking ill of the competition is not something this author does. I have always been an advocate of deserving business from my customers by providing the best products and services at the best possible ROI. Whether a company is new or evolving from a prior way of doing things should not matter. Where was Microsoft 30 years ago? Had anyone ever heard of Whole Foods? What was Intel? There has always been next generation companies made of leaders that are, thinkers and visionaries that do the same things we?ve done every day in very different ways. The goal of these companies is to drive increases in productivity, create new jobs, better work environments and focus on making the world a better place for those that follow. There have always been early adopters, and there have always been followers. One has to choose their own path.

Today, there is an epidemic in our world as a result of unsafe products. Not enough is being done about it. The global supply chain is growing larger every day and traceability which does not exist is critically important. As consumers we have become far too familiar with terms like listeria, salmonella, ecoli, botulism, noroviros and staphylococcus aureos etc. There are additional issues with non consumable products such as lead in toys, BPH, flammable liquid issues and other hazardous materials to name a few.

Our environment is also suffering. We can do something about it. By us, I mean our collective sourcing community of retailers, suppliers, brokers, growers, manufactures and others. Every day conversation includes terms such as global warming, recycling, biodegradable, alternative fuels, pollution, conservation, green living and dozens of others eco focused phrases.

When you look at a company name, look at the statement it makes. Is it clear what the company stands for? Visit the company?s website and see if its message is clear and supports the brand image they espouse. If you meet with the company insure that their messaging supports at a detailed level what their brand indicates because it is their promise.

Our company is SafeSourcing. We absolutely do things that other companies do such as e-negotiation events. However we do it in a far different way. We have streamlined the process with new technology, and added intelligent functionality. We have added a critical focus on safety and the environment with the largest retail supplier databases in the world which also supports a traceable history beyond one forward one back. And, we do it less expensively because our technology allows us to.

What?s in a logo? Ours is SafeSourcing..

We look forward to and appreciate your comments.

Social responsibility and the environment

Another blogger on the supply-chain front is Ron Southard, who started SafeSourcing
last year. It?s a company based in Scottsdale, Ariz., geared for retailers who need
help in procuring merchandise and want supply-chain advice, focusing on environmental
and social-responsibility practices as well as other issues.

Southard said there has been an increased focus on supply-chain management because
of the added profit it can generate for businesses if they take cost-effective steps and
use the chain wisely. ?It is a well-known fact that the supply-chain section hasn?t been the most highly respected profession in retail.

Operations, loss prevention and marketing have always gotten more attention,? Southard said. ?If you are going to have an impact on your profitability, this is certainly an area that should get attention.?

The company?s blog, published Mondays to Fridays, discusses a number of topics, from how to improve your corporate social responsibility to handling the logistics of shipping products and dealing with U.S.Customs? 10 + 2 rule.

SafeSourcing has a database with 300,000 suppliers that support the retail community. The company?s Web site, at www.safesourcing.com, also has its own Wiki, named after the online encyclopedia Wikipedia. It defines terms commonly used in the supply chain industry.

In fact, there has never been a better time to save money. Suppliers that are hurting want your business and incumbent suppliers don?t want to lose your business. What a great time to have suppliers compete for your business?

There could not be a better environment for using hosted e-negotiation tools. And, when you are using a full service hosted tool, your valuable resources and associates are free to tackle other issues. This really is a common sense approach. If during hard economic times, you were to put more of your spend under the management of these types of tools, your customers just might thank you with more loyalty in the way of increased wallet share. It?s time for creative sourcing professionals to look for alternative sources of supply and place a larger percentage of spend their under management. This is an area in which Retail lags all industries.

In a study released last year by the Aberdeen Group titled Strategic Sourcing in EMEA, the study revealed that top-performing enterprises utilize e-sourcing solutions for a remarkable 56% of their addressable spend. This study included an evaluation of an astonishing 230 EMEA based sourcing programs. In addition, the best in class organizations realized cost savings 40% higher than all other organizations.

It is time to look at how we do things in retail and make some needed changes. If a super market company?s total cost of goods were 72% of revenue, and supermarket net profitability averaged 1%. What type of net profit improvement might we anticipate if a $500M supermarket retailer were to assign just 10% of their total spend to these types of tools? The math is pretty simple. Existing net profit at 1% would equal $5M. Present cost of goods at 72% would equal $360M. If 10% of total spend were assigned which is $36M to these tools and savings averaged only 10% which is well below e-negotiation averages, this retailer would reduce cost of goods by $3.6M or an astonishing improvement in net profit of 72%. Theoretically these savings should drop straight to the bottom line minus certain switching costs associated with new suppliers and savings timing based on actual delivery timeframes.

The cost of these types of tools, are so minimal in a hosted environment or SaaS implementation that they almost do not impact the financial model listed above. Remember in the Aberdeen report, best practices companies assigned 56% of their available spend. Their cost models may differ based on the Industry. In retail, what in the world are we waiting for? Most of your suppliers are using these tools to reduce their costs.

We appreciate and look forward to your comments.

A good friend of mine that works in retail procurement recently had safety and green initiatives added to his list of responsibilities. We discussed some of what that entails and other thoughts as to how designing a program that supports safer and more eco-friendly procurement.

1. Be pro-active in driving not for resale and for resale product safety within your company, and also supporting eco-standards in the procurement process.
2. Pay it forward with all of your trading partners by sharing what you are doing, and asking what they do to support yours or similar initiatives.
3. Educate your employees and trading partners about common safety standards and guidelines such as the SQF Certificate www.sqfi.com and the Global Food Safety Initiative www.ciesnet.com.
4. Educate your employees and trading partners about common eco-standards such as Green- Energy National Standard www.green-e.org or EcoLogo www.ecologo.org.
5. Point associates and trading partners to free educational websites such as www.safesourcing.com to use their free SafeSourcing Wiki or the Sourcebook professional social network for procurement professionals.
6. Only use trading partners that follow your lead.
7. Train your team to understand and use all available tools that insure supply chain safety such the free daily safety in sourcing blog at www.safesourcing.com or the low cost SafeSourceIt Supplier Database and Reverse Auction Tools.
8. Impose a system of measures and controls to monitor performance against clearly defined goals.
9. Start at the top and engage all levels of your company.

We appreciate and look forward to your comments.