Archive for October, 2020

How to tell when you need to simplify your processes

Friday, October 2nd, 2020

 

Today’s post is our archives at SafeSourcing

Finding the right balance of complexity in your processes is a tough thing to juggle for businesses large and small. I’ve worked in companies where you literally had to read through and comply with hundred page manuals for every email sent, phone call made, or lunch break taken. On the other end of the spectrum, were companies who had so little structure that no one had any idea what standard procedures were, roles were not identified, and whether or not you were performing well was determined more by the owner’s mood than any objective metric.

The problem is similar to the dilemma of Emergent vs. Deliberate strategy[1]. Each side of the argument carries its own merits; highly process oriented organizations are usually highly efficient, and low risk. The tradeoff however, is that adaptability and innovation suffers. The more flexible and open ended your process, and the more you give your team the authority to deviate from those processes, the more they are able to deal with crisis, unexpected changes, or to innovate in order to meet the needs of the business. So how do we determine if our organization is leaning too far in one direction?

A basic rule of thumb is:

If the cost of your process > the value of the process, you may need to re-balance.

This of course, requires that you have a correct understanding of the cost of all your processes.

Many businesses have a hard time wrapping their heads around the true process capacity of their workforce. Typically this results from not having an up to date or objective measurement of all processes rate of finite resource consumption. Do you have an accurate listing of every activity performed by each member of your team? Have you found averages for all costs of each of these activities, in time, money, and materials? Most likely each of your team positions specializes in a certain activity, and will be aware of activities associated with executing that position that no one else is. Performing this evaluation will identify your process capacity “budget” if you will. And of course, all things that consume finite resources must have a budget of that resource.

Once you have a clear and objective picture of your activity costs, you can evaluate the costs and value inherent in your processes. Do you have redundant processes that only add marginally increased value? Do you have processes so narrow in scope that a large number of activities get bypassed? Do you have activities whose execution is so sensitive that a miss-step would shut down your business? You may need to add processes or capabilities that eliminate these risks (For more on that topic, see my blog “Mistake-proofing your business”).

In summary:

  1. Objectively measure your organization’s process capacity
  2. Evaluate the cost to benefit balance of your processes
  3. Appropriately budget your process capacity to maximize overall value/decrease risk

For more information on how SafeSourcing can assist your team with this process 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.

[1] “Balancing Deliberate vs. Emergent Strategy: SafeSourcing …” 2015. 15 Dec. 2015 <http://blog.safesourcing.com/2015/06/01/balancing-deliberate-vs-emergent-strategy/>

Supplier Management

Thursday, October 1st, 2020

 

 

Today’s post is our Archives at SafeSourcing, Inc.

The number one most important aspect in the procurement world is supplier research and vetting. If you want to run a successful RFQ, you have to vet the suppliers and make sure the suppliers you have involved can do exactly what you need them to. A good relationship with the right suppliers offers you products and services that improve your brand and deliver better user experiences. According to Softco, selecting first-rate suppliers and weeding out low-performing vendors is key to reaching your supplier relationship and compliance management goals. Here are some important questions that you and your team should consider before engaging potential suppliers during the supplier selection process.

  1. What are your clients supply requirements? The first thing you need to do is establish exactly what products or services your client is looking to source. The more specifications, the better the supplier research can be.
  2. Whom, within your company, will complete your supplier research? Use people within    your company that have the best knowledge on particular categories. Sometime those people can help narrow down the list better than someone with in the company that has never worked within that category.
  3. Do you need a local or regional supplier? You want to establish from the beginning if you are looking for local vendors or national vendors, or both. Sometimes you may even need to find overseas vendors, however, you want to make sure the shipping and/or freight is low enough to benefit your client’s needs.
  4. When is the lowest bidder not the correct supplier to choose? Sometimes the lowest bidder isn’t always the best fit. You need to request samples, if need be, and make sure the lowest bidder’s product or service meets the requirements. Sometimes sticking with your current supplier, but pay a little more than the lowest bidder, is worth keeping that relationship.
  5. When is a vendor visit necessary? When time allows, sometimes it is necessary to make a quick visit to suppliers and establish a customer relationship. During that visit, you and your team will want to take note of the supplier’s plant capacity, current volume of work, manufacturing processes, and work environment.

Even if you are not looking source a certain category, these are things you should always be asking vendors as you are looking to switch vendors or are searching for a better price. SafeSourcing specializes in this process.

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. We have an entire team ready to assist you today.