Archive for January, 2010

Bad sourcing practices can cause more than just “the cadmium blues.”

Friday, January 15th, 2010

According to Wikipedia cadmium has no constructive purpose in the human body. Cadmium and its compounds are extremely toxic even in low concentrations, and will bioaccumulate in organisms (that’s us) and ecosystems (that’s where we live).

This author posts frequently on safety issues and realities in sourcing practices. Particularly when you are buying from and unknown source, offshore or products for which you have no specific product specification. Consumers would be surprised how many products are bought offshore during buying trips that don’t have a specific specification. An example might be something as simple as a tiki lamp that comes under the category of seasonal, pool supplies or miscellaneous. Another that has been in the news recently is children’s costume jewelry. The issue that bothers this author is that for some of the largest names in retail that generally have great procurement practices there is really no excuse for these products making their way on to the shelves of our stores. There should be a check list of standards and certifications that suppliers have to adhere to in order for their products to come onshore in the first place. I can’t believe that a simple question like “Do these products contain any harmful chemicals in their makeup such as cadmium etc.” If the answer is we don’t know then don’t buy them or make the manufacturer provide a chemical breakdown of the product.

Inez Tenenbaum the head of the Consumer Product Safety Commission advises, “Do not allow young children to be given or to play with cheap metal jewelry, especially when they are unsupervised. This author whishes to paraphrase, DON’T ALLOW IT WHETHER SUPERVISED OR NOT. And further. Retailers don’t buy these products regardless of profit margins unless you know they are safe period.

We look forward to and appreciate your comments

Bad sourcing practices can cause more than just “the cadmium blues.”

Friday, January 15th, 2010

According to Wikipedia cadmium has no constructive purpose in the human body. Cadmium and its compounds are extremely toxic even in low concentrations, and will bioaccumulate in organisms (that?s us) and ecosystems (that?s where we live).

This author posts frequently on safety issues and realities in sourcing practices. Particularly when you are buying from and unknown source, offshore or products for which you have no specific product specification. Consumers would be surprised how many products are bought offshore during buying trips that don?t have a specific specification. An example might be something as simple as a tiki lamp that comes under the category of seasonal, pool supplies or miscellaneous. Another that has been in the news recently is children?s costume jewelry. The issue that bothers this author is that for some of the largest names in retail that generally have great procurement practices there is really no excuse for these products making their way on to the shelves of our stores. There should be a check list of standards and certifications that suppliers have to adhere to in order for their products to come onshore in the first place. I can?t believe that a simple question like ?Do these products contain any harmful chemicals in their makeup such as cadmium etc.? If the answer is we don?t know then don?t buy them or make the manufacturer provide a chemical breakdown of the product.

Inez Tenenbaum the head of the Consumer Product Safety Commission advises, ?Do not allow young children to be given or to play with cheap metal jewelry, especially when they are unsupervised. This author whishes to paraphrase, DON’T ALLOW IT WHETHER SUPERVISED OR NOT. And further. Retailers don?t buy these products regardless of profit margins unless you know they are safe period.

We look forward to and appreciate your comments

What consitutes a complex e-negotiation event or reverse auction.

Thursday, January 14th, 2010

Definitions are often tied to the concept of a set of parts or elements which have relationships among them differentiated from relationships with other elements outside the relational regime.

So how does one define a complex e-negotiation event? On the surface it may be an event with a large number of line items within a particular product set such as generic drugs in the retail space or raw materials used to manufacture components that require special handling, shipping and standards adherence.

This author would suggest that any event including multiple line items each with different specifications, order quantities, delivery locations, multiple suppliers not bidding on each line item, a split award of business and the size of the spend qualifies as a complex event. Adding to the complexity may be the overall strategy required when sourcing the right mix of suppliers to compress pricing properly and drive early and consistent bid activity…

The above example would qualify as organized complexity where there is a non-random, or correlated, interaction between most of the parts. In order to support? complex events, your supplier needs to have an understanding of the specific market place and practices and processes in place that allow these activities t bring complex events to market? in the shortest period of time. Generally this should occur within less than two weeks from event notification to event completion.

In a two part post from October of 2008, this author tried to define the relative complexity of the retail environment and its potential impact on the use of e-procurement tools. Specifically we identified the following areas of interlocking complexity.

1.?Supply Chain complexity.
2.?Rate of change in the global supply chain.
3.?Long term inherited supplier relationships.
4.?Lack of retail procurement staff.
5.?Lack of time.
6.?Multiple sources of supply.
7.?Limited view of new sources of supply.
8.?Confusion as to who?s the customer and who?s the supplier

Being comfortable that your solution provider understands your market place and has a well defined process for hosting Complex e-negotiation events insures that they are not difficult to host.

We appreciate and look forward to your comments.

Do your suppliers adhere to all of ISO’s environmental standards?

Wednesday, January 13th, 2010

ISO has published a new, updated brochure providing a basic introduction, as its title indicates, to Environmental management – The ISO 14000 family of International Standards. The 12-page, color brochure is the latest edition of a successful publication first released in 1998, two years after the launching of the first standards in the ISO 14000 family

The International Organization for Standardization widely known as ISO, is an international standard -setting body composed of representatives from various national standards organizations. Founded on February 23, 1947, the organization promulgates world-wide industrial and commercial standards. It is headquartered in Geneva, Switzerland. While ISO defines itself as a non – governmental, its ability to set standards that often become law, either through treaties or national standards makes it more powerful than most non-governmental organizations. In practice, ISO acts as a consortium with strong links to governments.

The SafeSourceIt™ Supplier Database holds it suppliers accountable to many ISO standards including 14000, 7002, 9001 and 22000.

We look forward to and appreciate your comments.

Do your suppliers adhere to all of ISO?s environmental standards?

Wednesday, January 13th, 2010

ISO has published a new, updated brochure providing a basic introduction, as its title indicates, to Environmental management ? The ISO 14000 family of International Standards. The 12-page, color brochure is the latest edition of a successful publication first released in 1998, two years after the launching of the first standards in the ISO 14000 family

The International Organization for Standardization widely known as ISO, is an international standard -setting body composed of representatives from various national standards organizations. Founded on February 23, 1947, the organization promulgates world-wide industrial and commercial standards. It is headquartered in Geneva, Switzerland. While ISO defines itself as a non ? governmental, its ability to set standards that often become law, either through treaties or national standards makes it more powerful than most non-governmental organizations. In practice, ISO acts as a consortium with strong links to governments.

The SafeSourceIt? Supplier Database holds it suppliers accountable to many ISO standards including 14000, 7002, 9001 and 22000.

We look forward to and appreciate your comments.

Creating a sustainable e-procurement or reverse auction program is based on more than just savings.

Tuesday, January 12th, 2010

Primary success in e-procurement programs such as reverse auctions of which there are many types is in many cases measured by cost reductions. That?s because within a budget period they drop directly to a company?s bottom line plus or minus some switching costs. On more than one occasion I have heard; ?did we hit a home run?? Less emphasis seems to be placed on cost avoidance in an up market and creating a sustainable process. This often results in less spend be assigned to these very effective tools then should be.

In order to ensure that results are sustainable; the strategies for all targeted e-procurement categories require consistent deployment across all departments throughout the host company. This is accomplished by utilizing a well planned repeatable process for category selection and discovery, supplier selection, and a solid strategy that is well understood by all buyers and category managers for negotiation and the award of business process.

Supplier selection and management is a critical stage that requires the understanding and participation of all sourcing professionals within an organization. One small mistake by anyone within the procurement or supply chain organization could negatively impact the potential results of an e-procurement event. Historical long term relationships that drive behind the scene comments like; ?don?t worry we?ll be fine? to a long term supplier may drive inappropriate bid behavior and lack of ongoing credibility with your program. Not to mention the potential legal implications.

If you are not having the results you would like to or have less than twenty percent your total corporate spend assigned to e-procurement tool?s that are offered in the form of? Software as a Service or cloud computing, ask your provider why?

We appreciate and look forward to your comments

Why is the use of reverse auctions by retailers up?

Monday, January 11th, 2010

From mid tier one retailers on down the use of reverse auctions has been very limited since their inception at the end of the 1990?s. The reason is because there was very little focus on the retail segment and the tools were also very difficult to use and expensive. If retailer?s think a tool is so complicated that they can not do it themselves, they won?t use them.

We are seeing a small uptick in e-negotiation tools in retail and this author believes that some of the following quotes from the folks watching a reverse auction last week may be the reason why.

1.??This was pretty simple to do?
2.??If we hired someone we could do these ourselves with you guys?
3.??This is fun?
4.??You mean the reports are already available?
5.??I love the sports concept?
6.??It was easy to follow the marquis and what was going on from one screen?
7.??The multiple color schemes were great?
8.??I can?t believe how fast you guys set this up?
9.??We saved that much money and only have to pay what we discussed?
10.??Can we do another one today?
11.??I may get a promotion out of this?
12.??I love that calculator at the end of the bid process?
13.??I like all of the supplier data that was accessible during the auction?
14.??Now I know how the big guys get the pricing they do?

So what does this all mean for retail procurement professionals? It means that today?s tools are easier to use, more interactive, maintain your attention during an auction,? integrate gaming technology to keep it fun and are lower cost than their predecessors.

This all adds up to a focus on retailers entire spend both indirect and direct as well resulting in increased utilization by middle market and large retailers alike.

If you would like to have fun, save money and do it quickly, please visit us at www.safesoucing.com.

We look forward to and appreciate your comments.

What is Green-e certification? Does your company’s CSR program mandate the purchase of renewable energy products?

Friday, January 8th, 2010

For over ten years, the nonprofit Center for Resources (CRS) has developed and implemented consumer-protection standards for the voluntary renewable energy market through the Green-e program.

What is Green-e? Green-e is the nation’s leading independent consumer protection program for the sale of renewable energy and greenhouse gas reductions in the retail market. Green-e offers certification and verification of renewable energy and greenhouse gas mitigation products. It is a program of the Center for Resource Solutions.
Green-e Energy certifies renewable energy products sold to residential, commercial, industrial and wholesale customers. Certification services are available to all companies selling renewable energy. The process to get a renewable energy product certified varies depending on the type of product seeking certification, based on the following two categories of companies offering renewable energy products.

Ask your procurement solutions provider if they can tell you what companies carry this certification. SafeSourcing can.

We look forward to and appreciate your comments.

What is Green-e certification? Does your company?s CSR program mandate the purchase of renewable energy products?

Friday, January 8th, 2010

For over ten years, the nonprofit Center for Resources (CRS) has developed and implemented consumer-protection standards for the voluntary renewable energy market through the Green-e program.

What is Green-e? Green-e is the nation’s leading independent consumer protection program for the sale of renewable energy and greenhouse gas reductions in the retail market. Green-e offers certification and verification of renewable energy and greenhouse gas mitigation products. It is a program of the Center for Resource Solutions.
Green-e Energy certifies renewable energy products sold to residential, commercial, industrial and wholesale customers. Certification services are available to all companies selling renewable energy. The process to get a renewable energy product certified varies depending on the type of product seeking certification, based on the following two categories of companies offering renewable energy products.

Ask your procurement solutions provider if they can tell you what companies carry this certification. SafeSourcing can.

We look forward to and appreciate your comments.

What is Green Seal Certification?

Wednesday, January 6th, 2010

At Safesourcing, Green Seal is one of the supplier certifications we monitor in support of our customers Corporate Social Responsibility initiatives.

Green Seal Certification ensures that a product meets rigorous, science-based environmental leadership standards. This gives manufacturers the assurance to back up their claims and purchasers confidence that certified products are better for human health and the environment

Founded in 1989, Green Seal provides science-based environmental certification standards that are credible, transparent, and essential in an increasingly educated and competitive marketplace. Their industry knowledge and standards help manufacturers, purchasers, and end users alike make responsible choices that positively impact business behavior and improve quality of life

Green Seal works with manufacturers, industry sectors, purchasing groups and governments at all levels to “green” the production and purchasing chain. We utilize a life-cycle approach, which means we evaluate a product or service beginning with material extraction, continuing with manufacturing and use, and ending with recycling and disposal.

To learn more about environmentally focused procurement programs please visit www.safesourcing.com.

We look forward to and appreciate your comments.