Archive for August, 2020

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eRFX Strategies for Success Part III the reason for an RFP Items 1-4

Monday, August 31st, 2020

 

Todays post is from Ron Southard, CEO at SafeSourcing Inc. This post also includes input from the many talented teammates I work with every day and my Whitepaper by the same title.

In  parts one and two we have discussed  that the world of procurement is continually changing, and this includes the world of eProcurement when it comes to the request for information, a proposal, or a quote and why this process when used properly even with newer tools is still the most effective results delivering procurement process available.

The Request for Proposal (RFP)

A Request for Proposal (RFP) is a document used in sealed or electronic bid procurement procedures through which a purchaser advises the potential suppliers of (1) statement and scope of work, (2) specifications, (3) schedules or timelines, (4) contract type, (5) data requirements, (6) terms and conditions, (7) description of goods and/or services to be procured, and (8) instructions for preparation of technical, management, and/or cost proposals.  As an example, government RFPs are publicly advertised and suppliers respond with a detailed proposal, not with only a price quotation. They provide clearly quoted specifications for negotiations after sealed proposals are opened, and the award of contract may not necessarily go to the lowest bidder.2

Breaking down each of these 8 pieces of information will help to form an  understanding as to whether there is enough detail to move straight to an RFP,  thus skipping the Request for Information altogether.

  1. Scope of Work: This refers to all of the elements that should be included in the proposal for the project and is generally specific to each customer along with the data and metrics provided to shape it. Simply, this is the definition of the needs and expectations for the work needing to be completed.
  2. Specifications: “An exact statement of the particular needs to be satisfied, or essential characteristics that a customer requires (in a good, material, method, process, service, system, or work) and which a vendor must deliver. Specifications are written usually in a manner that enables both parties (and/or an independent certifier) to measure the degree of conformance. They are, however, not the same as control limits (which allow fluctuations within a range), and conformance to them does not necessarily mean quality (which is a predictable degree of dependability and uniformity).”3 Generally, specifications will be broken into either performance or technical specifications that define the types of goods or services needed from the vendor community. Developing strong specifications ensures proposals containing exactly what is needed. As a result, vendors will know not to over bid or under bid.
  3. Schedules or Timelines: This is the time frame of the expectation of when the RFP is sent to the vendors, when questions (about the specifications or the RFP process) are due from the vendors, when the vendors can expect the questions with answers to be returned, and when the RFP is due to be completed.
  4. Contract Type: This defines to the vendor if the contract is a spot buy, a one year, two year, or longer contract. There may also be additional special contractual requirements added within this area.

Tune back in tomorrow when we will explore the Request for Proposal or RFP items 5-8.

If you’d like to learn more and can’t wait for the series conclusion, please contact a SafeSourcing Customer Services associate, they’d be thrilled to hear from you.

Thanks.

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eRFX Strategies for Success Part II the reason for an RFI

Friday, August 28th, 2020

 

Todays post is from Ron Southard, CEO at SafeSourcing Inc. This post also includes input from the many talented teammates I work with every day and my Whitepaper by the same title.

In yesterday’s post we discussed  that the world of procurement is continually changing, and this includes the world of eProcurement when it comes to the request for information, a proposal, or a quote and why this process when used properly even with newer tools is still the most effective results delivering procurement process available.

The Request for Information (RFI)

A Request for Information (RFI) is a request made typically during the project planning phase where a buyer cannot clearly identify product requirements, specifications, and purchase options. RFIs clearly indicate that award of a contract will not automatically follow.1

An example for use of an RFI would be if a company acquired a used warehouse that needed to be turned into a distribution center. The facility has some racking installed but needs more.  There has not been a defined idea of what layout will be needed to improve the warehouse for DC use, nor what types of rack are needed, how much material is needed, nor how long it will take to install the racking. The existing racking is in adequate shape, but it is unknown whether it is safe, placed appropriately, outdated, or even needed in any way. A situation like this is often a good time to rely on experts to provide feedback as to these needs.  The best practice would be to get a minimum of 3 sets of data submissions, but I would recommend getting 4 to 6 submissions from your request for information from racking manufactures, distributors, and/or installers.

The higher supplier count, in an area where you have no knowledge, provides the necessary data to begin to make more informed decisions.  With at least 3 submissions it becomes clearer if there are major differences between suppliers and how they operate.  Lead time, outsourcing, and geographical coverage are all very important pieces of information to gather from the suppliers at this stage of a sourcing project.

The application of an RFI can be used on new goods for use, re-sale, packaging design, any and all services, software, hardware, equipment of any kind, actually it is limitless as to what you can utilize an RFI for in business.

Tune back in tomorrow when we will explore the Request for Proposal or RFP?

If you’d like to learn more and can’t wait for the series conclusion, please contact a SafeSourcing Customer Services associate, they’d be thrilled to hear from you.

Thanks.

 

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Is it time to look at your own budget, If you have one!

Tuesday, August 25th, 2020

 

Today’s post is by Troy Lowe; Vice President of Development at SafeSourcing.

While we focus on helping companies reduce their costs in all areas, not enough of us use those same skills to focus on our own expenses. Here are some ideas for you to use in those areas.

Even though a lot of things have opened up in recent months, the pandemic is still going strong.  Because of this a lot of people are still out of work or making less than they were at the beginning of the year.  Because of this you may need to look around and see what things you can do to reduce spending until things turn around.  There are a lot of little ways to cut costs and the best way to figure out where and how is to start a budget.  A budget is basically a plan for your money.  Creating a budget involves tracking all of your expenses and income.  When you sit down and create a list of all of your expenses it will help you to understand when and where you are spending your money.  A lot of people do not realize how much money they are spending on frivolous things until they complete a budget.  For example, how much do you spend on that morning cup of coffee?  It doesn’t seem like much until you multiply the number of cups by the number of days purchased per year.  According to some researchers, the average American spends approximately three dollars a day or 1,100 dollars a year on coffee.  You may not of have thought about it, but this and other things that we do daily can add up to a lot of extra cash that could be used for more important things throughout the year.  Creating a budget can help you identify all of the small spends that could add up to a lot of extra savings.  Below is a list of some common expenses that could be lowered by creating a budget and researching cheaper alternatives. There are many more.

  • Energy Usage
  • Food Options
  • Entertainment
  • Streaming Services
  • Subscriptions
  • Credit Card Interest Rates
  • Interest on Loans
  • Insurance

Interested in learning how SafeSourcing can help your company run more efficiently?  If you would like more information on how SafeSourcing can help you,  please contact a SafeSourcing Customer Service representative.  We have an entire team ready to assist you today.

 

 

 

 

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It really is a CRITICALLY GOOD time to look at your supplier contracts.

Thursday, August 20th, 2020

 

 

Todays post is from Ron Southard, CEO at SafeSourcing Inc.

It appears it would be counter intuitive for senior management to ask procurement professionals to explore all contracts in the current environment. There is so much uncertainty relative to the economy, COVID-19, and related internal and external adjustments as well as an upcoming election that may change how we look at everything.

With all of that said, public companies are going to have to continue to report earnings while they plan for an uncertain future. Small businesses while not having to report are equally as focused on keeping the doors open. While the numbers vary as they seem to with everything today, approximately 100,000 businesses have failed forever. Many more will over the next 6 -12 months. Depending on the source you use, nearly 17 million Americans are unemployed. So much to focus on, how to cope?

While the statistics are daunting, all these businesses were buying products and services from the supply chain. As such, it is not surprising that the supply chain companies have lost sales/revenue and are very eager to find new business. They are looking at their existing customers to lock in business, new verticals with similar characteristics to their existing customers to cannibalize from and their existing markets to offer unsolicited proposals at great initial pricing. I am sure there is not a senior leader that has not been told of unsolicited offers for current expense categories at drastic improvements in pricing. So, the market is ripe, but it will not stay that way forever. And here is a caution; Do not accept those initial offers. There is still better pricing available.

At SafeSourcing, we have not laid off anyone since the 1st of the year and have dramatically reduced our expenses on everything. One example is our phone service where we reduced costs by 45.3%. Another is our insurance policies where we reduced costs by 13%. There are many others with significant savings as well.

I have often used the following as a tongue in cheek response to the question I have heard thousands of times. Why should we focus on expense reduction with SafeSourcing? My response is, do you have a dollar bill? Even in todays world most folks do. I ask the questioner to take it out of their purse or wallet while I am taking a $10 bill out of mine. I offer to trade one for one. While many already see my point, no one has ever turned down the exchange. A 10X return? Why would you not do it. Both bills are the same size, color, and government backed. It is the same specification right? So, an easy decision. I then add that when you use SafeSourcing, our ROI is quite often much higher. Your time commitment is minimal, and you receive and equal or better specification or service or both at a lower price! So, Why Not?

The times are hard, headcount may be down, and you have so much to focus on! Let SafeSourcing help you reduce your costs on everything from capital, costs of sales/goods and expense. Your numbers will look better now and in the future and you will not have to use headcount as your best cost management tool. Our average customer savings over the last 18 months are in excess of 24%. Yours could be too!

For more information on how SafeSourcing can assist you in exploring your procurement solutions for your business 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.

 

 

 

 

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How are you winning?

Tuesday, August 18th, 2020

 

 

Today’s blog is by Margaret Stewart, Director of HR and Administration at SafeSourcing Inc.

This year has been one that none of us have seen before. With illness, civil unrest, constant politics, and economic hardships, we hope there is some silver lining for each of us. Through all the struggles, there can be some glimmers of success and we want to share those.

Procurement is a business of procuring the goods or services a company needs. E-procurement does that, but in a different way. SafeSourcing has the tools and technology to keep your organization’s procurement efforts continuing. Regardless of what good or service your company seeks, SafeSourcing can help you find the right suppliers and often lower expenses far more than you may think.

This is where we would like to share some success. SafeSourcing has continued to work with customers throughout this year’s challenges and has shown success for our customers. In fact, our customers on average continue purchasing the same product or service and save a significant amount. Wouldn’t you like to save 10%, 15%, or 20% off the products you already buy? Most of our customers want to and do with the help of our e-procurement tools and services.

For more information on ways we can help you save money, or on our Risk Free trial program, please contact a SafeSourcing Customer Service Representative. We have an entire team ready to assist you today.

 

 

 

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It is a Good Time to be a Buyer

Monday, August 17th, 2020

 

Today’s post is by Dave Wenig, Senior Vice President of Sales and Services at SafeSourcing

If you are a buyer, I have some great news for you. Are you a buyer? Whether you are a professional working in a procurement related role or not, I say we are all buyers. If you sell a product and you are concerned about margins or your ability to compete on price in the market, you are a buyer. If you are responsible for your company’s financial health in any way, you are a buyer.

What is the great news? We are in a buyer’s market. Let me share two of the real-world indicators we have been taking note of at SafeSourcing. Many of our current customers are taking full advantage of this situation while it lasts.

Indicator I: Results

SafeSourcing’s historical savings has averaged about 24.8% for the last several years. More recently, we are watching as that figure is rising. In June, SafeSourcing’s customers saved 29.7% on average and in July, they saved an astonishing 32.7% on average across all the spend categories sourced with us. That trend is impressive on its own, but is only made more so by the next indicator.

Indicator II: Vendor Behavior

SafeSourcing has a good working relationship with many of the vendors who participate in the eRFx events we host for our customers. Recently, we have been having vendors reach out to our associates with unsolicited offers and quotes hoping for new business for several categories indicating that prices are as low now as they have ever seen them. In many conversations, the vendors are also telling us how their business is suffering as a result of industries like hospitality being down which has caused their sales volumes to plummet. The vendors are very eager to win new accounts.

If I am right, and this is a buyer’s market, do not expect that you will see your prices drop by a third all on their own. Your current vendors are not going to come to you proactively to lower your prices. As buyers, we have to work for the cost reductions we deserve. We have to constantly hold our vendor partners accountable through meaningful negotiations and we cannot be afraid to change vendors when it is the right decision for our own company. You can get these results with help from SafeSourcing.

If you would like more information on how SafeSourcing can help you, please contact a SafeSourcing Customer Service representative.  We have an entire team ready to assist you today.

 

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Better Business Outcomes

Thursday, August 13th, 2020

 

Today’s post is from our archives at SafeSourcing, Inc.

Over 30 million Americans don’t have access to modern broadband. The Federal Communications Commission announced that it would hold the biggest spectrum auction in U.S. history, aimed at bolstering 5G network deployment. The bidding will see roughly 3,400 megahertz across three spectrum bands auctioned off for commercial use. The auction is scheduled to start in December 2019 and may be the largest in the country’s history. The FCC also stated that there would be more auctions after this one. Three rounds of clock-phase bidding will be held each day at this stage in the auction. The clock auction format being with a “clock phase” that lets participants bid on generic blocks in each Partial Economic Area in successive bidding rounds, followed by an “assignment phase” that allows the winners of the generic blocks to bid for frequency-specific license assignments. Thirty-eight bidders qualified to participate in the auction.

In an auction, the activities are targeted towards researching/inviting suppliers and ensuring that any existing supplier has an opportunity to propose enhanced pricing or better terms. The auction is usually held via e-procurement and has a number of activities concluding with a short time period with dynamic bidding ensuring the pricing moves rapidly downwards. This type of auction provides any number of advantages including:

  • Suppliers are encouraged to bid low and provide good terms in order to win the contract.
  • The process is seen as a fair way of awarding government contracts as well as those from large monopolistic companies.
  • It is a low cost, much quicker method of finding new suppliers.
  • Negotiation costs are almost zero.

SafeSourcing eProcurement, particularly reverse auctions, is a sure way to increase your bottom-line and enhance the spend process. Utilizing new technologies will add profit dollars without selling one new customer buying your products or services. The savings are traditionally 10X your investment in e-Procurement tools. You’re just accepting a different way to silicate bids/pricing even with your incumbent vendors that you currently work with.

For more information on how SafeSourcing can help in your procurement efforts, or on our Risk Free trial program, please contact a SafeSourcing Customer Service Representative

 

 

 

 

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Category Discovery is a critical step in building your e-negotiation strategy?

Wednesday, August 12th, 2020

 

Todays post is by  Ron Southard, CEO at SafeSourcing Inc.

Category discovery is the basis of any quality implementation of an e-negotiation strategy. It is essential that this process be supported by the company’s executive management because they hold the key to unlocking access to data sources across the enterprise. This process will include working with all category managers, buyers, other procurement knowledge workers and anyone that participates in sourcing to uncover what you don’t know in support of your Requests for Information (RFI), Proposals (RFP) and Quotations (RFQ).

The first step in this process is the understanding of where the data is hiding and in most companies large and small it is. Here’s a list to get you started. Data discovery generally comes from two sources; Internal and external.

Examples of Internal and External Data Sources

1. SLRP
2. Budgets
3. General Ledger
4. Detailed P&L
5. Purchase Orders
6. Contracts
7. Detailed Vendor Listing
8. Product List by Vendor
9. Invoices
10. Product cut sheets
11. Copies of orders
12. Brochures
13. Supplier Websites
14. Annual Reports

While all of these data sets have been around for years, you may also have an ERP system, Data Warehouse, spend cubes for either or any number of new AI tools related to these systems. The old saying goes, garbage in, garbage out! The question is do you trust your data?

If you’d like some help with your category discovery and have a General Ledger you’d like analyzed, please contact a SafeSourcing Customer Services Project Manager.

As always we look forward to and appreciate your comments

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What You Should Expect of Excellent White Glove Level Customer Service

Tuesday, August 11th, 2020

 

 

Today’s post is from our SafeSourcing Inc Archives.

This author defines excellent  white glove customer service as going above and beyond  the expectations of your internal and external customers in all facets of your engagement with the business.

Customer Service is more than just helping a customer in the now, there are multiple and unique ways that  SafeSourcing provides excellent  white glove customer service. Below are just a few highlights:

  1. Good customer service is a team sport. One weak link in the chain can lead to a negative experience that affects business and the bottom line. Educate our employees on rules for customer engagement. We begin with a set of simple rules, such as be courteous, listen carefully and be prepared to say “yes” rather than “no.” The best way to teach is by example. We believe, when you treat your employees well, they’ll be more likely to treat your customers well, in turn. (Open Forum, 2011)
  2. After you and your employees, nobody knows more about your business than your customers. Customers can be your biggest fans or your harshest critics. We ask the customers how we are doing, what they like about our business and what they don’t like. This is not about collecting compliments, it is an open the channel to all customers. Negative feedback can be especially helpful, though it can be a little uncomfortable. We put mechanisms in place for anonymous feedback, such as a “Contact us” button on our website and feedback surveys for our suppliers to complete. (Open Forum, 2011)
  3. While all customers deserve to receive courtesy and respect, our long-term and loyal customers merit treatment that goes above and beyond. Special offers of extra hours, special reports, loyalty and appreciation help give our best customers something extra. Far from alienating new customers, these programs demonstrate that loyalty has its rewards. (Open Forum, 2011)
  4. Nobody’s perfect, and our customers understand that. When we make a mistake, we acknowledge it, apologize and then move quickly to correct it. We use the opportunity to improve our business processes and let customers know what actions we took to prevent the mistake from happening again. Customers will feel more comfortable doing business when they see that we took the problem seriously. (Open Forum, 2011)
  5. The key to customer loyalty can be embodied in two simple words: Thank you. Nothing else sets the tone for our relationship with our customers better. Essentially, every “thank you” says, “I appreciate your business and I won’t take it for granted.” And it can be just as powerful whether it’s delivered in person or on a printed page. E-mails, invoices and phone calls are all opportunities to let our customers know how important they are to us. (Open Forum, 2011)

Providing excellent white glove level customer service is integral to any successful business. Taking care of our customers helps encourage them to continue doing business through good times and bad.

We enjoy bringing this blog to you and hope you find value in it. 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. We have an entire customer services team waiting to assist you today.

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Reference: https://www.americanexpress.com/us/small-business/openforum/

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It’s a real crime that so many companies continue to stay on the sidelines!

Friday, August 7th, 2020

 

 

Todays post is from Ron Southard CEO at SafeSourcing

Unfortunately some 70% of companies still do not use eprocurement tools. If they did, their results would be better. SafeSourcing can give you customer references that exceed the 17X ROI mentioned above. So what happens when you combine your spend with another company?

Generally speaking, the greater the spend amount, the more interest you will get from potential vendors. As a result, many of our customers have been turning to collaborative eProcurement events in order to benefit from the additional savings that higher volumes can generate. Let’s take a look at a few of the benefits of getting involved.

1. Higher savings due to aggregate volumes
2. Improved payment terms
3. Larger vendor pool
4. Greater ROI
5. Source smaller category spends

Based on the five benefits listed above, perhaps it’s time to try a collaborative event. You may ask; “how would we become involved?” The answer is simple. Contact your SafeSourcing customer services representative and ask if there are any open or upcoming opportunities in which you could participate. Similarly, if you have any upcoming projects either large or small, ask your partner to attempt collaboration within their customer base.

Here’s an example of savings generated from a recent collaboration. In this scenario, our customer was in need of a relatively small spot buy for replenishment purposes. Their spend in this category was actually quite low and was actually the lowest overall amongst the participating companies. In this example, the customer saved almost 37%. I find it difficult to imagine that they would have done so well without the eProcurement process. Further, this is evidence of the benefits of the collaborative process as their pricing was likely much better off as a result of the aggregated spend.

So, are you ready to get involved, or will you continue to stand on the sidelines?

We look forward to and appreciate your comments.

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