Archive for April, 2011

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The importance of RFx in the Procurement Process – Part II of II

Tuesday, April 12th, 2011

This is a continuation of my last post where we began to discuss the importance of running a Request for Proposal/Information before a competitive pricing event is run.  The last post talked about being specific in the information requested and not being afraid to run an RFx on an existing spend.  Here are some additional details to keep in mind.

• More than a template.  To obtain truly great RFx results the process should involve more than a template off the internet.  Having a team that knows how to properly run an RFx will ensure the right formatting is used; answers will be collected quickly; full results analysis will be conducted; as well as an assurance that the right companies are invited to the process to provide a mix of leaders; innovators and up-and-comers.

• If you use an online tool, go beyond the basic survey providers.  Providers that give access for creating free or inexpensive surveys are good for basic questionnaires but often lack the flexibility and post-survey analysis that a company used to handling RFP/RFI responses can provide.

• Remove the bias.  If at all possible try to find an independent company that can handle the entire RFx process all the way through to the final results and analysis, ensuring your results will show the best company with no bias.

• Integrate with the Reverse Auction.  Having an RFx process tightly integrated with the initial quote gathering and final competitive pricing event means that your company as well as all of the suppliers can get comfortable with one system for everything and not have to go from one tool to another to deliver the information you need.

For more information about the SafeSourcing RFx tools and professional services, please contact a Customer Service Representative today.

We look forward to and appreciate your comments.

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What impact will the Hours-of-Service (HOS) Proposed Rulemaking have on transportation costs?

Tuesday, April 5th, 2011

In December of 2010 the Federal Motor Carrier Safety Administration or FMSCA a part of the U.S. Department of Transportation proposed changes to the hours of service for Commercial Motor Vehicle Drivers (CMV) with comments due by March 4th of 2011.

These rules are an example of a good thing and potentially a bad thing for companies that ship or receive overland freight as part of their business. In general when drivers are required to work less hours, more drivers will be required to transport products and more trucks will be required to support the increased driver population. So, more jobs and increased sales of CMV?s; is probably good for the economy. The off side of this conversation is an increase in shipping costs in an industry that has seen prices climb steadily over the last few years that result in reducing their customer?s profit margins.

All companies will need to keep abreast of these potential rule changes, because this author is sure that these expenses were not planned for in anyone?s budgets.

We look forward to and appreciate your comments.

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Is retail barter better? Maybe not if you can find willing participants for a forward auction of the same merchandise.

Friday, April 1st, 2011

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. Many companies that may have large amounts of excess or slow-moving inventory use corporate barter transactions to move this inventory. This author thinks that a forward auction may drive better cost recovery.

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.

Ask your e-negotiation solution provider how they can help reduce your overstock and shrink with forward auction tools, and who they would invite as buyers. You company stakeholders will applaud your efforts.

We look forward to and appreciate your comments.
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