Archive for October, 2012

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When is a specification more than just a specification?

Wednesday, October 31st, 2012

A statement of work or SOW is another document that should be added to e-sourcing events in order to bring clarity to what is included in a bid. In essence the document lists the work activities to be agreed upon, the deliverables and a timeframe in which a supplier will be expected to perform against. The SOW requires agreement as do other documents prior to a supplier being allowed to place bids.  

Areas that are normally included in a Statement of work might include but are not limited to the following.

1. The actual scope of work to be completed
2. The time period in which it is to be performed
3. The location of work.
4. A list of the detailed deliverables
5. A Schedule of all deliverables
6. A standards adherence document.
7. Acceptance criteria
8. Other requirements.
9. Change request definition.

Make sure that when you are running e-sourcing events that you make sure that all of the above information is considered and captured before you approve of an event being passed on for suppliers to review. And then be prepared to make adjustments.

If you’d like to learn more about categories that absolutely require an SOW, please contact a SafeSourcing customer services representative.

We look forward to and appreciate your comments.

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Balance – An idea for the nation, an idea for your Procurement Department!

Tuesday, October 30th, 2012

Today’s post is by Debbie Wilcox, CPSM and Vice President of Sales and Marketing at SafeSourcing.

The Wall Street Journal recently revealed that a group of approximately 80 CEOs from top U. S. corporations have formed a non-partisan group to encourage our national leaders to come up with a plan. The group has raised $29 million dollars and has plans to put 30 people to work visiting key members of Congress in their home districts. They will host dinners that bring both Democrats and Republicans to the table along with budget experts and leading business executives. Ideas that will be discussed include a blended solution of raising taxes AND reducing expenses to help balance the budget. 

You can take a similar balanced approach to your sourcing and procurement requirements.  Maybe you’ve identified a number of projects with great savings potential but you just don’t have the personnel and bandwidth to get them completed. Or maybe you’ve heard of new vendors and new products for a project you have targeted but just don’t have time to do the research.

Working with a third party sourcing company to help you become more effective in your work is an option you should consider. At SafeSourcing, we help you analyze your spend and identify projects and areas for supplier consolidation. We’ll bring our list of international suppliers and our experience working with them, to bid on your projects to ensure you receive the best pricing available. We can complete the supplier research, identify comparable products and introduce service improvements.  In general, we complete the heavy lifting and present project results to you to make a decision. Yes, we will make our recommendation, but the supplier award decision is yours.

If your procurement department could use some help and balance, don’t act like Congress and hope that things will somehow miraculously change the longer you wait. Take charge of your procurement goals and even exceed your savings targets. You’ll be amazed at what you can achieve. We help our customers do it every day. We can do it for you too.

Contact a SafeSourcing representative to find out how we can design a program that meets your needs.

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It happened again yesterday! Really it did!

Wednesday, October 24th, 2012

How many times does someone ask you what does eProcurement mean? It happened again yesterday at a $250M retailer. Now the person asking the question was an administrative support team member so we can cut her some slack. Or should we? She was a member of the finance department! I really do think that all associates should understand what their functional area of the company does, or at least be able to adlib based on general knowledge.

So what is procurement or what is e-procurement and who in a company is impacted by it?

It really is a curious question; pretty much along the same line as what is spend management, strategic sourcing etc. My answer however may create more questions, but all of the following functional areas within your company are involved or impacted by procurement or e-procurement?

1. Finance
2. Purchasing
3. Logistics
4. Manufacturing
5. Warehousing
6. Materials Management
7. Inventory Management
8. Supply Chain
9. Distribution
10. Transportation

There are certainly many more areas of a company that have procurement or  e-procurement connections that require collaboration and potentially aggregation, but the above list probably gives you a pretty good idea of the breadth of involvement within any company. In fact, I can’t think of a job that is not impacted by procurement. Maybe I should just say we save every department in your company money every day.

If you’d like to know more about e (hint-internet) Procurement, please contact a SafeSourcing customer services representative.

We look forward to and appreciate your comments.

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No matter what our current government leaders say, the economy is still terrible.

Tuesday, October 23rd, 2012

This author still can not believe how many companies, buyers and category managers do not advocate for the use of modern e-procurement tools.

The use of these tools preserves and creates jobs as well as generating many other benefits that your business is not receiving today.

The lack of use can really only be one or two reasons at this point. First is that you or your procurement team just go to work and do your job and don’t really care one way or the other. Second is that you do not stay up to date in your trade and have very little influence within your company. If this is not true, why are you still writing your own RFI’s and RFP’s for a small group of suppliers?

Maybe now there is a final chance to step up and try or recommend using e-procurement tools including reverse auctions? Who knows, maybe you’ll save enough money to save someone’s job, hire someone new or insure that your job will still be there when next years planning is complete.

Although they may not impact your job directly, the reduction of cost of goods, expenses and preservation of capital are all immediately achievable if you’ll just take a look.

A customer recently told me that they would not be adding any new jobs to their procurement department next year. In fact they have already more than doubled the size of their departments staff to drive  down costs through the use  of the SafeSourceIt™ family of procure to pay tools. This customer went on to say that others in other departments will in fact be able to keep their jobs as a result of the work we’ve done together. So in the worst economy since many of us have been alive, this customer has added jobs, protected jobs, saved significant money, improved quality with the use of SafeSourcing products. Another benefit is that we also continue to add jobs to support our customers during this same time.
In addition to all of the benefits listed above, here are some additional quotes from a CEO and his team that watched their first reverse auction.
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”

It’s too bad our current political combatants for the highest office in our land can not be this detailed during their debates.

Why not join others that have come a little late to the party. You can still benefit because 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. If you happen to have already been doing this for years, why not find an easier way or do it less expensively.

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.

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Good sourcing practices are good whether they are green or not.

Thursday, October 18th, 2012

… “A Practical Guide to Green Sourcing” and it occurred to me that if you already have good sourcing practices, the journey to green should have been or could be much easier.

A Practical Guide to Green Sourcing was written by John Christensen, Christopher Park, Earl Sun, Max Goralnick, and Jayanth Iyengar of Supply Chain Management Review and published on November 1st 2008 (we all know what has transpired in the years since). However, since you are still here, the article is absolutely loaded with great information a lot of which should be just plain common sense. Oh yeah, I said it and agree that if oyu have any, you are not that common.

A quote from the article really says it all and is a theme you should already be familiar with if you read my posts regularly. It is as follows. “Green sourcing can help in two important ways. It can help companies improve their financial results, allowing them meet their cost reduction goals while also boosting revenues. It can also contribute to a better public image and reputation with the company’s stakeholders.” In essence this one quote supports triple bottom line accountability or TBL. However if you replaced the word green at the beginning of the quote with the following it still works

1. Efficient
2. Well thought out
3. Strategic
4. A refocus on your
5. Reviewing your
6. Best Practices
7. SaaS based
8. Off shore
9. Near shore

I’m sure you can add another dozen to this list pretty easily. I hope you will read the entire article. It may be your company’s first step towards a more successful 2013 procurement plan.

If you’d like help defining your (insert any of the above) 2013 sourcing plans, please contact a SafeSourcing customer services representative.

We look forward to and appreciate your comments.

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What’s important to you in the development of your negotiation strategy Part II of II?

Wednesday, October 17th, 2012

During Mondays post we discussed that before you can negotiate effectively you will have to go back to the drawing board and develop a procurement strategy. Once that’s in place negotiation best practices can follow.

Here’s some of what you might consider. Remember this is not how we will negotiate (tactics) this is what do you want for a result set that supports your overall procurement strategy?

Result Thoughts:  What are you looking for from your negotiations?

1.  Alternative or additional sources of supply?
2.  Better quality products!
3.  Lower costs!
4.  Where possible products that support a reduction in your carbon foot print!
5.  Products and Services that are safe for your associates and consumers!
6.  Clear and concise contracts!
7.  Elimination of quick deals!
8.  A win-win result (define) for your company and your supply partner!
9.  Open unbiased treatment of all suppliers during the process!
10. A collaborative process that eliminates stove pipes and supports logical aggregation without maverick buying!
11. Internal subject matter experts (SME) going forward!
12. Standardized specifications and Terms and Conditions!

There is certainly any number of items that could be added to this list, but it should get you started. As a result you should have a procurement strategy and a negotiation strategy in place. The next step would be the tactics.

If you’d like more information please contact a SafeSourcing customer services representative.

We look forward to and appreciate your comments.

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Nothing is ever too easy!

Tuesday, October 16th, 2012

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

We recently ran a very basic event for some office supplies for one of our new customers.  During the review of the event which saved over 25% they admitted they were skeptical of what we could achieve because they had been working with their vendor for so long and felt that the spend was too basic to get much more of anything else.  They were, of course, ecstatic about the results.

While the eProcurement process should never be solely about price, the fact is that in this arena, just like life, no one wants to pay more for the products and services that they really want.

For someone new to the process of negotiating with several vendors instantly in a forum that allows them to know where they stand, let’s take a look at some of the categories that companies may think they have taken as far as they can go but that likely still have a lot of savings and value left in them.

Shipping/Office Supplies – Many companies feel like they have improved the deals in these categories as far as they can.  Because of the shrinking list of National players, long-term relationships and the view that many of these items have become commodities, all contribute to the incorrect perception that they are not good candidates to work with your eProcurement company on.  The reality is that many companies can still receive 15-20% in additional savings, rebates and add-on services than what they have today, even from their incumbent.

Printing Services – Printers are typically some of the longest standing relationships that a company has with a vendor.  Due to this fact the business aspects of these relationships rarely get closely reviewed as long as there are not major price swings.  The reality is that technological improvements in printing have dramatically lowered most printers’ costs leaving a great opportunity to explore for companies looking to understand all of their expenses.

POS Supplies – The retail Point of Sale industry has exploded over the past couple of decades with Value Added Resellers (VARs) coming from everywhere to provide you the products you need to run the front-end of the retail business.  As manufacturers step back and let the VARs handle the customer portion of the business, VARs have become more aggressive in the extra services they can offer even if they can’t always change their pricing.  Point of sale supplies are great areas to discuss with your eProcurement partner.

For more information on how SafeSourcing can help you with these of any of your other spend categories, please contact a SafeSourcing Customer Service Representative.  

We look forward to your comments.

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Are you keeping track of all of the new supplier invitees from your e-RFX initiatives?

Wednesday, October 10th, 2012

So how would you go about keeping track of these suppliers, or finding new ones if you had to?

Do you have to be a student of the database industry to understand what may be available to you without having to do a lot of work? At the end of the day a database is just a list albeit a sophisticated list with lots of tables and joins and other database features that allow for the combination and use of data.

As an example, when looking to build a retail supplier database there is certain information you require in order for the data to be believable. UDDI (Yu-di) is an open industry initiative, sponsored by the Organization for the Advancement of Structured Information Standards (OASIS), enabling businesses to publish service listings and discover each other and define how the services or software applications interact over the Internet. These service listings can take a number of different forms such as business registrations, for UDDI they are in the following formats.

  1. White Pages — address, contact, and known identifiers;
  2. Yellow Pages — industrial categorizations based on standard taxonomies;
  3. Green Pages — technical information about services exposed by the business.

Combining these data which is readily available from a variety of sources provides a great start. From there the challenge to add other attributes that are important to you such as certifications, sic codes, detailed company descriptions, sales figures, products carried, experience, ratings etc.

This author has always believed that reinventing the wheel is a misguided way to accomplish development initiatives and with all of the open source available on the market today and the cost of IT talent as high as it is we have to explore these alternatives to core development if time to market is a critical success factor.

So there you have it, my thinking and process for building our database. The next question is how we keep it fresh an updated. And that my friends are a trade secret.

So, unless you feel you have the time, energy or resources to do something similar, why not reach out to SafeSourcing and let us provide you access to our SafeSourceIt™ Database or find suppliers for you that may be right in your own back yard and you don’t even know about..

We look forward to and appreciate your comments.

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What’s’ your pitch?

Tuesday, October 9th, 2012

If you are, tell your vendors, friends, links and other’s in your connected network to use their noodle and come up with something more interesting. Something that will show their creativity and ensure that you will continue to be interested in their company, offerings and creative approach into the future..

An elevator pitch according to Wikipedia is a short summary used to quickly and simply define a product, service, or organization and its value proposition. I can remember this subject coming up at my new man training school at a major corporation over 30 years ago. It was fun to play around with different approaches and compare how well one could define themselves and their company. The problem is, once a company has settled on something they tend to forget about it and it just becomes blah, blah blah and as such does not evolve as the company does. Much the same story exists for companies brand strategies. But that’s another story or post.

Let’s look at a couple of examples. I worked for a Loss Prevention Company at one point. When the owner was asked what they do, he very succinctly stated, “We analyze transaction data to detect patterns of employee theft”. This certainly fits the model of less than 30 seconds and begs a question on the part of the person asking the question. The questions could be myriad, but would have the desired effect of beginning a conversation.

When we launched SafeSourcing, we tried to come up with an elevator statement or speech that would do the same thing. “We are an e-procurement company” didn’t really work. Neither did “We are a procure to pay company”, because at the time we were not. We thought about “We are a strategic sourcing company”, but that did not quite cut it either. To often believe it or not the question would be what’s procurement or just Oh.

Today our current elevator statement is a little long winded and goes like this “We are an e-procurement company offering a complete procure-to-pay suite of applications. The heart of our family of products is our popular reverse auction technology. We help you reduce cost, improve efficiency and extend the reach of your procurement group with an historic ROI greater than 10X”. This statement is true, but as stated is a little to long winded and not overly creative. The good news is we continue to try and work on this all of the time. Does your provider?

Today I tried to come up with a few more that might peak an executives interest around subjects that are important to them and might get them to say “Tell me more”.

So, here you go.

   1. “We help company’s find new sources of business that they did not know existed”!
   2. “We help our customers justify not having to reduce headcount”.
   3. “We help our customers create funding to support internal job growth”.
   4. “We improve our customer’s profitability in the current accounting period”.
   5. “We are a job creation company”.

The trick here is to be creative and honest while being able to be equally succinct in your follow up answers.

If you’d like to learn how we can apply any of the above statements to your company, please contact a SafeSourcing customer services account manager.

We look forward to and appreciate your comments.

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Are you monitoring your Contract Leakage?

Wednesday, October 3rd, 2012

The answer is probably not or you would not have any and 80% of all companies not only have contract leakage, but because of it they often do not realize the hard earned savings the negotiated with their new e-procurement tools.

However congratulations are in order, you have used your new e-procurement tools effectively and awarded the business to a new supplier. You may have also offer a Letter of Intent or LOI to get things moving while the contract is being completed. With that assumption in place, how does your organization ensure that the award of business is implemented or delivered as awarded so that you indeed receive all of your savings?

This is probably the most difficult part of the entire procurement lifecycle. The first step is to understand your data and where it is kept, that includes understanding what constitutes contract leakage so that you know what you are looking for. This data needs to be looked at on a regular basis in order to insure leakage is not occurring. This should be at least monthly depending on specific contract language (Meta data). Most contract management systems have alerts that can be triggered as frequently as required against this data.

The following list although not all inclusive speaks too many of areas in which contract leakage can occur. This happens in all companies large and small. If you are aware of them, capture them and report on them regularly there is a good possibility of controlling them.

? 1. Award Date
? 2. LOI Date
? 3. Contract Date
? 4. Delivery Dates
? 5. Quality specifications variances
? 6. Making payments at a prices different from the contract
? 7. SOW creep
? 8. Rebate misses
? 9. Escalator Misses
? 10. Invoice discrepancies
? 11. Missed volume discounts??
? 12. Insurance discrepancies
? 13. Shipping discrepancies?
? 14. Expiration dates
? 15. Expiration Notification Dates
? 16. Auto Renewals & Evergreening

Don?t work hard to drive benefits from your procurement organization and then lose much of what you have gained to contract leakage. If you?d like to learn more about SaaS based Contract Management offerings, contact your SafeSourcing customer services representative and ask how they can help.

We look forward to and appreciate your comments.

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