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

What is a fair price increase? What type of margin should your vendor make? These are tough but fair questions. So, maybe in some cases it’s time to consider other than single source opportunities. Maybe in other cases its time to consider multiple suppliers. Do you have a fair pricing policy? Does your Supplier have one? Competing for your business is a good thing, its how the world works.

If your interested in getting your cost back in line with reality, contact SafeSourcing because we have done this many times for many companies.

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

If your company hasn’t ever sourced products or if you have and just aren’t sure where to begin, you are not alone. With all the number of things each organization buys throughout the year, it can be a challenge to determine where to begin and what to source first. Determining what services or items you source first can depend a lot on different circumstances, such as time of year or even current market conditions.

The time of year you look for goods and services will affect the results of your procurement efforts. When you are considering sourcing snow removal services, you will likely have the results if you source during the warmer months of the year instead of the winter or fall. This is because the need for those services are at their peak during the winter months and vendors may charge higher prices for the same services because they may be low on time. Sourcing ahead of time lets you and the service provider better prepare for the upcoming season so that headcounts, equipment, and schedules can accommodate the need.

Another significant factor in the timing of your procurement efforts is current market conditions. While market conditions are not something we can predict or control, there can be some speculation. For instance, if resin prices increase in the market, the prices for plastics will likely rise. It can be beneficial to source your plastic goods during that point and simply lock in prices to help offset the price increases. If market prices decrease from there, you can implement language into your supplier agreements to reevaluate prices monthly or quarterly to adjust to those market conditions.

If you are simply unsure what products you should begin sourcing, a procurement partner, like SafeSourcing, can assist your team. Whether you already have a procurement team in place or no procurement team, SafeSourcing can assist your business or organization from start to finish so your sourcing projects are successful. In fact, SafeSourcing even offers a risk free offer where we guarantee the success of our procurement efforts for your organization.

For more information on how SafeSourcing can help 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.

Today’s post is our SafeSourcing Archives

What prevents a business from reducing costs by engaging in eProcurement best practices? The most common obstacle we see is simply a limitation in mindset, or the lack of will to change practices that maintain the status-quo. eProcurement practices have been around for as long as the internet has, and yet we still find businesses that aren’t aware of the most up to date tools for sourcing, and for whom suggesting a change in practice is akin to blasphemy. What is the barrier to change, and how can you overcome internal objections to improving procurement practices within your organization?

A concept that has come back into the spotlight this election cycle is The Overton Window. This concept is sometimes called “the window of discourse”, and signifies the range of ideas that your audience will accept. Though typically applied to political ideas, it simply relates to what ideas a group of people is willing to consider, and not willing to consider. However, the effort to enact any type of change within an organization will come up against this concept, and will require that The Overton Window be widened. Once the window is widened/the range of concepts willing to be considered has grown in scope, you can begin to garner buy-in of improved processes. So how can we accomplish this in the procurement space? Here are a few recommendations:

•  Let the results speak for themselves: We run risk-free pilot events for new customers to demonstrate what can be accomplished with eProcurement practices. We routinely saving upwards of 20% on spends in excess of a million dollars using our process. Seeing one category save hundreds of thousands of dollars can quickly get your team to see the possibilities open to them for other categories across the business.
• Implement cost reduction goals: If you create goals that can’t be accomplished by maintaining the status-quo, your team will have to open their expectations to considering new possibilities. “Necessity is the mother of all invention” as they say.
• Find examples of being overcharged: We often do analysis of a company’s spend categories and uncover situations where companies are being charged 50% more for products/services than other clients of ours being charged. The only difference is that they’ve never addressed that spend and taken it out to market. If your boss isn’t interested in eProcurement, find a spend he’s losing money on that a category RFP has high historical savings in to demonstrate how much money is being left on the table with current purchasing practices.

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.

Today’s post is from our SafeSourcing Archives

Communication is a funny thing. We communicate day in and day out, most of the time successfully, but it’s easy to think of examples where our message has not be received as intended, or we just weren’t able to pick up what someone else was trying to communicate to us. Much of the time, we find that the fundamental issue in miscommunication is that the message giver and the message receiver have different understandings of the concepts being traded back and forth. For example, one person’s idea of “love” looks completely different from someone raised in a family that expressed love in a totally different way. Another simple example could be if you’re sent to the grocery store with instructions to get “apples”. In your mind, when you hear the word “apple” you have a picture of a Honey Crisp apple, but the person who sent the request has an image in their mind of green Granny Smith apples. All communication is based on templates stored in our minds, on hard drives, on documents, etc. And if we don’t understand what information IS, we’re bound to make mistakes in how we trade it with others in our professional lives.

Information, generally speaking, is a representation of other objects stored within a physical medium. All information is stored in physical objects, such as hard drives, CD’s, brain cells, etc. The higher fidelity of information is stored, the more accurately it represents the object of its focus. For instance, a picture of a widget in low definition, and vague description in a specifications sheet, won’t represent that widget as well as a high definition picture, with several pages of precise descriptors. Similarly, a cell phone recording of a symphony won’t represent the event as well as an IMAX recording would. But the IMAX data will be potentially thousands of times larger, because it takes larger physical space, to record information at higher fidelity. This is because the more possibilities your information CAN’T represent, the more detailed it has to be and the more likely it can only represent what you intend it to.

In the Information Theory context, entropy can be defined as the delta of change from order, to disorder/randomness. Information entropy is the average information of all possible outcomes. In other words, information is most precise, when it disqualifies EVERY possibility other than the very specific one it is trying to represent. If the information you are sending could mean any one of a dozen things, you are bound to have some unavoidable margin of error in communicating to your audience. The tricky thing though, is there’s a tradeoff.

The greater fidelity the information is, more precise your communication will be. However, this increases the size of the information content, making it more difficult to manage, decode, or asses. The tradeoff is that the more precise the information, the more difficult to use. How this translates into procurement specifically, is that there will always be some margin of ambiguity in any specifications document. However, that doesn’t mean an RFP can’t be flexible enough to meet a buyer’s needs. Here are a few ways procurement professionals can make sure their documentation avoids falling into some of the common communication pitfalls inherent to the transfer of information:

• Identify the most important attributes, and focus your specifications on those. For instance, perhaps the business goal of the purchase doesn’t depend at all on color, or pack size, or the availability of support staff. Keep the more detailed information limited to the important attributes.
• Add flexibility to your bid for consideration of equivalent products. Sometimes being too specific means that a vendor who may have a superior product to offer, isn’t able to propose his alternative if a specification calls for an exact match to a lesser product.
• Ask yourself “would something I wouldn’t want qualify under the specifications I’m creating?” Remember, information should guide your audience to a specific concept, and disqualify all other possible concepts, as much as is possible without overburdening your audience.

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.

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

Since being an out of the box thinker is such a desired asset, how does an in-the-box thinker get out? There are a plethora of ideas about how one can begin this or whether or not it is even possible.

One way to begin thinking outside the box is to approach a problem like a child would. Break aspects of the problem down into ideas that a small child could understand and imagine how that child would respond to the situation. This allows you to break things down into their simplest form, and often when things are simplified, resolutions become clear.

Another way to begin thinking outside the box is to question everything. It’s been said before that to be a scientist, you must question everything. The same holds true when trying to find a new solution to an old problem. Questioning everything allows you to start from scratch and begin the process of resolution all over. Question why the problem exists, what all of the possible actions could be, and why some actions were favored over others.

A third way to begin thinking outside the box is to stop thinking things out and just try. Trial and error has proven countless times to be beneficial when solving a problem. Sometimes, we may eliminate a possible solution before ever trying it because we assume it won’t work. Just trying anyway can sometimes produce results, even if they aren’t what we expect. For example, there have been at least a few medicines that were intended for one use, only to have side effects that are more beneficial than expected, like a migraine medicine’s ability to be marketed as a high0end beauty item.

Although there are a number of different theoretical ways to train yourself to think outside the box, some say that out of the box thinking cannot be learned, that one either has it or doesn’t. Ironically, that type of thinking could be described as in-the-box. Despite those that believe this, approaching a problem in a new way can at least provide a better understanding of the task at hand. Once a problem is more fully understood, then the more likely a positive outcome will result.

For more information on how SafeSourcing can help you think outside of the box, or on our Risk Free trial program, please contact a SafeSourcing Customer Service representative. We have an entire team ready to assist you today

Do you think outside the box?

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

The statement “Think outside the box” has become a highly used business term, cliché even, but do you know what it means, where it came from, and how you can obtain this skill?

The origin of the common phrase has been debated, but popular beliefs narrow its origin down to two possibilities. The first origin is that all of us are metaphorically in a box; we are closed off from new possibilities and use only what we know (what is inside the box) to solve our everyday problems. Thus, thinking outside the box is to find solutions that wouldn’t normally be thought of. A second theory of the phrase’s origin stems from a puzzle. In this puzzle there are nine dots in three rows of three, making a square. The object of the puzzle is to connect all the dots using only four straight lines without lifting your pen or tracing over a line. To answer this puzzle you must think outside the box, and the answer requires the lines be drawn outside of the square box shape.

So, what constitutes thinking outside the box in a real world situation? General definitions use the phrase for someone who thinks creatively, in a new way, or brings fresh ideas into play. A person who can do this can bring new perspective to problems, new and existing. The idea is that when most others fail to solve a problem, an out of the box thinker can provide ideas outside the realm of what was previously thought, shedding light on a solution that may have otherwise been left in the dark.

If you have a problem in your business and seek out-of-the-box thinking, SafeSourcing may be able to shed new light on your problem. As procurement partners, we strive to find the best solution to fit your needs.

For more information on how SafeSourcing can help you think outside of the box, or on our Risk Free trial program, please contact a SafeSourcing Customer Service representative. We have an entire team ready to assist you today.