Archive for July, 2013

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Strategic and Transactional Purchasing

Monday, July 8th, 2013

Today’s post is by Steve Schwerin, Account Manager at SafeSourcing.

Purchasing is often divided strategic and transactional.  I like these distinctions, because they help me hone in on the places where value is added in our field as things change.  There are certainly other ways to categorize spend.  One way of looking at strategic purchasing as distinct from transactional is that it deals with the non-commoditized.  Another is how it affects your core business.  This is not to say that it doesn’t deal in commodities.  Strategic purchasing is just something that needs to be dealt with a little more deftly, and as such, adds value to your firm in often intrinsic ways.

Not too long ago, I was watching a fascinating video clip on the “appliance boom.”  I had long heard of electronics booms, various industrial booms, the housing boom, the plastics boom and even the computer boom.  Forgotten in this mix was the appliance boom, yet there was a very real appliance boom back in the early 20th century as electricity became more of a household reality.  In the beginning of this phase, appliances were not something the average person often bought.  Households might have one washer and drier for years and a toaster was not a disposable item.  Appliances back then were actually screwed into light sockets since houses were not wired for appliances; they didn’t have electrical outlets.  In situations like this, knowing who you bought your appliance from and what brand it was were very important details.  Today, many appliances have become commoditized.  We buy the cheapest one with the most features.  Toasters and irons have become ubiquitous fixtures in our households.  Our situation today would have been hard to believe back then.  

What Changed?  Time?  Technology?  The sheer number of appliances on the market?  Regardless, lots of things that are more important to our well-being than a toaster were once strategic purchases, but have become transactional.  Details in business are always morphing, so continuing to purchase things in the same old way can be very costly.  Certain products that were once transactional purchases might even become strategic purchases as they become more critical to your central line of business or develop new features that are hard to place a value on.  The way you go about purchasing whether it be strategic or transactional may not only determine if you reach your savings targets, but how successful certain business endeavors are period.    Keeping an eye on which category each of your purchases currently falls into may be the beginning of keeping on top of savings opportunities as they come and go. 

For more information on how we can help you with your procurement needs or on our “Risk Free” trial program, please contact a SafeSourcing Customer Service Representative at 888-261-9070.  We have an entire customer services team waiting to assist you today.

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Handling Questions for RFI/RFP’s

Wednesday, July 3rd, 2013

Today’s post is by Sarah Kouse; Project Manager at SafeSourcing.

When participating in an RFI/RFP there are two sides of the question preparation process. There are the vendors who are asking the questions and there are the questions from the sourcing company gathering the questions from all the vendors and preparing them for the client.

Consolidate and Submit – As a vendor, when you are participating in an RFI/RFP, questions may come to mind at different times and you may be compelled to send questions when you think of them.  The downfall to this is that viable questions could be missed in the consolidation process and not answered. Therefore, when you have questions regarding the content of the document, the best way to get answers to your questions is to prepare them in one document and send all of the questions in that document all at once referencing the section and/or question from the RFP the item refers to.

Prioritize by Frequency – On the customer side, once all documents containing the questions have been sent, consolidate all the questions asked, labeling each question with the company name, who asked the questions, and  analyze them to determine if any questions have been asked multiple times.   With the questions organized and prioritized in this way, a team of stakeholders can quickly and easily focus on all of the questions at once, frequently getting them all answered in a matter of just a couple of hours.  Once the document has been consolidated with all the participating vendors’ questions that document will then be sent to the client to review and answer the questions.

Give everyone the same insight – Once the document has been reviewed and all the questions answered, that document will then get sent back to each vendor who is participating in the RFI/RFP process, even if a vendor did not ask a question. The reason this document is sent to every vendor is not only to make it fair for every vendor participating, but also serves as a reference guide for any questions that may come up in the future. The vendor could reference that document to potentially quickly get their answer.   Some trains of thought are that they don’t like this approach because it allows some vendors to be lazy and get the benefits of the other vendor’s questions.  This, however, usually shows itself in how a vendor like that answers the RFP as well as the fact that as the customer you know who took the time to ask questions and who did not. 

For more information on how we can help you with your RFIs and RFPs or other procurement needs, or on our “Risk Free” trial program, please contact a SafeSourcing Customer Service Representative.  We have an entire customer services team waiting to assist you today.

We look forward to your comments.

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How should one go about convincing suppliers to participate in an eProcurment event?

Tuesday, July 2nd, 2013

Today’s post is by Ryan Melowic; Assistant Vice President of  Procurement COE at SafeSourcing. 

In our industry there are sometime vendors who don’t adopt the process and initially decline to participate in an eProcurment event.  For one reason or another, they don’t feel it is a fit for them.  My goal is to make sure that vendors thoroughly understand the opportunity. 

The strategy I use when following up with vendors is to ask them questions as to why they feel the particular event is not a fit for them.  By breaking down their concerns and objections, I’m able to understand what their major objections are.  I then address each issue with a reason why they would be a fit. 

During this process you are likely to hear all kinds of responses from an incumbent that doesn’t participate in eProcurement events to a vendor who doesn’t feel that pricing is the only piece involved.  The vendor who doesn’t feel that pricing is the only piece is provided in most cases with a response like “you are absolutely correct, pricing isn’t the only piece of the puzzle.  However, the company who is hosting this eProcurement event has chosen this method.  This will be your first step in courting the relationship with the host company.  Next steps could potentially be presentations by you in order to help the host understand your company’s offerings.”  This helps the vendor understand that events are not just based on price alone.  If the incumbent does not want to participate in some cases it may take a more strong armed approach.  Explaining to them that the host and their current customer have chosen to collect pricing in this manner and if they want to be considered going forward that they will need to participate.  At the end of the day it comes down to the simple fact that as a supplier; are you sure you want to pass up an opportunity for future business?

At SafeSourcing we work diligently to make sure our companies eProcurment events are a success!  We don’t take no for an answer until we have done the due diligence to rule a supplier out.   For more information as to how we can help you with your procurement needs, please contact a SafeSourcing Customer Service Representative.  We have an entire customer services team waiting to assist you today.

We look forward to your comments.

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Farm to Fork – Where Does the Trace Start?

Monday, July 1st, 2013

Today’s post is by Mark Davis; Sr. Vice President and COO at SafeSourcing. 

The process of traceability in the products we purchase and consume every day has grown in urgency significantly other the past few decades.  As the origins of where a product began its life have begun cloudier due to increased international sources of raw materials the importance of being able to track a product is critical.  This is especially true when those points of origins begin in countries whose safety standards and processes are not the same as the US.  As we examine this process today we will focus on a few of the key areas and challenges that must be recognized in order for companies to begin getting a handle on the process.

Who’s responsibility is it? – The official answer this varies from industry to industry depending on what regulations have been passed to deal with the responsibility.   Unofficially the answer is that it is every entity who touches the product in some way from the time it is grown or manufacturer until it is the customer’s hands.  For the food industry, for example, there are laws like the Bioterrorism Act of 2002 which calls for food companies to have vision into their products one step before they got it and one step after it leaves them.  Assuming each party was handling their part, the line of tracking could be built as intended.  There are challenges with processes like this still which we will discuss below, but the concept is easy.  If you want people to trust you and your products, you should know as much as you possibly can about the pieces that go into creating them in order to fully protect your customers.

What are the challenges? – The challenges facing traceability are not unlike those facing many processes in industries where paper has and continues to be the medium of choice; technology, or lack thereof.  To effectively be able to track the origins of products there must some consistency in the level of technology being used so that data can be shared as well uniformity in how that data is going to be logged and used.  Along with the technology gaps there are also gaps in regulation where some parties in the supply chain are not required to track anything they do.  Without the regulation to enforce the safety, the process begins to develop holes and these holes lead to major delay issues especially when considering the parties in the supply chain that do not choose to track voluntarily are many times the source of issues that arise.

Where do we go from here? –  The beginning steps necessary to begin tracking happen with two channels.  The first channel focuses on how you track the origins of your own products.  This includes understanding where the raw materials you use are coming from as well as understanding the channels that handle your product once it leaves your facilities.  The second channel is by demanding that same level of insight from the vendors whose products you consume in your company.  Understanding the origins of your copy paper, cleaning supplies, roofing material, etc .  will begin to build a culture where safety at all levels is a top priority for your business.

At SafeSourcing we know companies are interested in the safety of their employees and their customers and while traceability may be something of great interest, knowing how to get there can sometimes be a challenge.  Helping business “source” safer is extremely important to us and how we do business.  For more information on how we can help you “source safer” or on our “Risk Free” trial program, please contact a SafeSourcing Customer Service Representative.  We have an entire customer services team waiting to assist you today.

We look forward to your comments.

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