Archive for November, 2011

Rebranding: Sourcing Nightmare or Opportunity – Part I of II

Monday, November 14th, 2011

Today’s post is by Mark Davis; Vice President of Operations and CTO at SafeSourcing.

Last week there was an article in Progressive Grocer about how Haggen, a 28 store independent grocer in the state of Washington, was leading a rebranding effort in their stores to focus on the concepts of homemade products and community.  Decisions like these are always major changes for a company and ones that are not made lightly, and there are many things to consider in the planning of these moves.

Over the next two days we will be taking a look at the sourcing points to consider while rebranding is being planned and the types of categories that need immediate focus after the process is set in motion.

Marketing-Procurement Planning – With re-branding changes being driven primarily by marketing departments it is important that a collaborative meeting with procurement happen early so that the scope of the re-branding can be discussed and timelines shared for the different stages in the process.  Armed with the scope of what the re-branding will change and the timeline within which it is to happen, proactive steps can begin so that the procurement team is ready to source the products needed to handle the change.

Categories Affected – One major piece that the procurement team will determine early in the scope discussion will be to detail all of the categories that will be affected by the re-branding.  This will be a topic covered in more detail in tomorrow’s blog and at a high level will include major categories such as uniform related items, external marketing items, construction related items and transportation related to name just a few.

Matching Categories with Contracts – As mentioned above, the scope and timeline are critical pieces of information for the procurement team to know because with that information and the category research above contracts can begin to be examined to determine which categories have contracts that can be leveraged against the re-branding.  There is significant spend associated with re-branding efforts and it should be used when examining contracts for items that will be affected and that expire within the timeline milestones.

Communication – Understanding how the re-branding effort will be communicated within the timeline is a final piece of information that will be needed by the procurement team so that they know what and much of the re-branding can be communicated when doing their job.  Often the re-branding effort comes with other organizational changes that need to be kept confidential so understanding how the organization plans to communicate the re-branding is important.

In tomorrow’s blog we will discuss more about the categories affected by a re-branding effort.  For more information on preparing your sourcing projects related to a re-branding effort, please contact a SafeSourcing Customer Service Representative.  

We look forward to your comments.

I’m proud to be a Veteran

Friday, November 11th, 2011

The background for my career began in base supply in the U.S. Airforce during the Vietnam era. My AFSC was that of an inventory management  and logistics specialist. I still use those tools today and think often of all the brothers and sisters in all branches of the service both past and present on this day.

Thanks to all of you for what you have done  and continue to do for our country.

We appreciate all of your contributions.

Suppliers; do your handlers, packers and processors have a Food Alliance Certification?

Thursday, November 10th, 2011

Food Alliance provides comprehensive third-party certification for social and environmental responsibility in agriculture and the food industry.

Today, there are more than 320 Food Alliance Certified operations, and over six million acres managed by Food Alliance Certified producers throughout North America.

Food Alliance Certified products include meats, eggs, dairy, mushrooms, grains, legumes, a wide variety of fruits and vegetables, and prepared products made with these certified ingredients.

With clear standards and criteria, Food Alliance certification is a practical, credible, and effective way for farmers, ranchers, and food companies to demonstrate their commitment to sustainability in agricultural practices and facilities management.

We look forward to and appreciate your comments.

Specifications need to be specific! So, what is Recycled Material Content?

Wednesday, November 9th, 2011

When developing a specification for a product you are planning to source such as copy paper, asking for post consumer content is a great opportunity to support your company’s support of a more environmentally friendly workplace. However you need to be specific (that’s why they call it a specification) because post consumer content while being a recycled material is not necessarily the only type of  recycled material that could be used and as a result may confuse you suppliers. So be specific.
 
Recycled material content is the portion of a product made with recycled materials consisting of pre-consumer materials (waste), post-consumer materials (waste), or both. This figure is important because the term recycled does not mean that a product contains 100% recovered materials. Nor does it mean that a product contains solely post-consumer materials. Recycled means that a product contains some recovered materials. Recycled content can vary from small percentages of pre-consumer to 100% post-consumer materials.

The easiest route to take when trying to develop user friendly detailed specifications is to have your sourcing partner do it for you or at least review what you have put together. If you’d like to view a detailed product specification library, please contact a SafeSourcing customer services representative.

We look forward to and appreciate your comments.

Do you support the Forest Stewardship Council or FSC?

Tuesday, November 8th, 2011

Unfortunately as we discussed in more detail this companies environmental programs or support there of, that was pretty much it. To be fair, there was a little bit more to the conversation which was centered on how the company could do more in their purchasing programs.

Although we support a large number of environmentally focused programs at SafeSourcing as part of our supplier due diligence we try to insure that they are also supporting programs and certifications that pay forward our customers CSR and environmental programs.

The Forest Stewardship Council (FSC) is just such an organization that deserves support. Our paper products come from our forests. The Forest Stewardship Council certifies wood and wood products and promotes responsible forest management. Its certification ensures wood is harvested sustainably and then tracks the wood through manufacturing to the store. Considered the leading standard for responsible forestry management.

To learn more please visit their website at www.fsc.org.

We look forward to and appreciate your comments.

Are you spending enough time looking at your Indirect Spend?

Monday, November 7th, 2011

Today’s post is by Ryan Melowic; Director of Customer Services at SafeSourcing.

In the past not a lot of attention or respect was given to the buyer which was responsible for purchasing indirect spend items such as supplies and hired services.  Their products do not always have the high visibility that the spend of other departments do such as For-Sale items.

Today, businesses are realizing the cost reductions that can be achieved by the indirect spend departments. 

The indirect spend category can be just as complex and in some cases even more complex than the other categories.  An example of the complexity of the category is measuring value of the supplier and the service they provide.  The best solution for that complex issue would be a detailed understanding of the category or the market.

When given a category like Temporary Labor, buyers must understand how  fees are broken down.  As an example, some pieces of the fees cannot be controlled  or bid down as they are mandated by the State or Federal government.  If you break those fees out from the ones that can be compressed, however,  the end result of your total project will be cleaner and ultimately more successful. 

If you would like to know more about procuring Temporary Labor Services or other complex service categories, please contact a Customer Service Representative at SafeSourcing.

When using e-procurement tools are you just driven by a reduction in price?

Friday, November 4th, 2011

The real question you should be asking is just what makes up total cost to begin with. A good friend of mine who has been a fortune 100 retail CFO helped to crystallize my thinking in this area. As such we look at cost differently today than we did a year ago. So, when we run an RFX event for our customers at SafeSourcing we think of cost in the form of three basic dimensions that cause a different type of thinking during discovery and strategy. They are as follows.

1. Price: This is the unit cost. It is expressed as an amount per unit. Price involves vendor comparison and negotiation.
2. Use: This is the consumption of a product or service. This is driven by the activities or needs. Authorization and control processes are key elements. Without these, you may not derive all of the savings from negotiating price alone
3. Mix: This is the inclusion of similar products or services to achieve a similar result. Company policies support this.

Certainly there are many more aspects to running a successful RFX like making sure the T&C’s are clear and that the process is managed through the award and contract stages. These steps or KPI’s along with the ones mentioned above collectively serve to insure that your strategic sourcing strategy uncovers all of the clues that have or may cause leakage to your sourcing events. They also proved the basis of a scorecard system that can track progress over time

We look forward to and appreciate your comments.

Executive Teams, are you thinking through e-procurement self service? Think Again!

Thursday, November 3rd, 2011

Let’s also assume that you want to drive the greatest possible savings across the broadest range of categories in the shortest amount of time, like the next budget period; and have a sustainable process moving forward.

If all of the above is true, you should consider what constitutes developing full service events and whether you have the requisite headcount, specifications, strategy and research skills as well as new sources of supply to conduct the service yourself. Then there is always the question of what tool sets to use.

The question one needs to ask is; what type of event services can an e-procurement provider offer to help us get ready if we did want to do it ourselves? What we are talking about is to be 100% self-sufficient. A provider should offer readily available classroom education that can be conducted on-site in order to train your team in all the nuances of event creation and support. These skills are the foundation that allows e-procurement providers to support large volumes of events in a full service mode, which drive greater savings over the long term. They should be able to provide reference to where they have done it in the past and how much staff the reference needed to add. Ask the reference what their average savings were in year one versus what a full service provider can drive. Remember, knowledge transfer in this area is one thing; the passion, skill and headcount to carry out these practices on a day by day basis are what drive results.

This process is normally provided by people behind the scenes with a very specific skill set. If you plan to do self service it would be very wise to make sure you have them covered at the same quality level.

We look forward to and appreciate your comments.

How to manage your budget by managing your print program

Tuesday, November 1st, 2011

As the end of the year is approaching, future budgets are discussed and analysis of current budgets are dissected. 

One of the most important questions for consideration is how you can reduce your costs? One sometimes overlooked area of the business that should be highlighted is company and employee printing; how much volume does an entire business print in a year, and how much does an individual print? 

Looking more closely, you may find yourself asking, “Have we currently implemented a managed print service program? “  If your answer is “no” and you want to decrease costs, such a program should be considered.

Numerous companies specialize in managed print services, of which any could assist in adopting an initiative for your company.   Such programs have proven to save companies millions of dollars within five years following implementation.  Think of the many ways you could use that saved money!

What are the steps for implementation?

Assessment is the most important step in this process.  The service provider looks into your current infrastructure.  The next steps require a design plan that identifies the opportunities to reduce costs, improve performance and create efficient operations.  Next, implementation begins with support provided during the entire transition process.  After implementation is achieved, the service provider will manage and monitor your program remotely, assisting in repairs, achieving supply levels, etc.

After implementation how do we achieve cost savings?
  • Reduction in operational costs
  • Standardization through device models and a networked platform
  • Optimization of all print assets
  • Reduced administrative tasks
  • Increase employee productivity

Managed print services not only leaves room in your budget, but it increases efficiency and provides the ability to regain control.  

If you would like to know more about managed print services providers, or how to involve companies who can help you reap the benefits of a larger budget through cost savings, please contact a Customer Service Representative at SafeSourcing.

We look forward to and appreciate your comments.