Archive for the ‘B2b Supply Chain’ Category

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Buyers; Do you need a great place to research product quality and recall issues?

Wednesday, June 29th, 2011

The U.S. Consumer Product Safety Commission is charged with protecting the public from unreasonable risks of injury or death from thousands of types of consumer products under the agency’s jurisdiction. The CPSC is committed to protecting consumers and families from products that pose a fire, electrical, chemical, or mechanical hazard or can injure children. The CPSC’s work to ensure the safety of consumer products – such as toys, cribs, power tools, cigarette lighters, and household chemicals – contributed significantly to the 30 percent decline in the rate of deaths and injuries associated with consumer products over the past 30 years.

 Recalls and Product Safety News can be found at the CPSC’s website and can be searched using a number of categories, dates and other criteria such as those below.

1. Recall Number
2. Company
3. Product Type
4. Product Description
5. Hazard
6. Country/Administrative Area of Manufacture
7. Recall Date
8. UPC

You don’t always have to buy something in order to get your job done. Sometimes just knowing where to find the information can be the hardest part of your job. Now you have one fewer places to look.

We look forward to and appreciate your comments.

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Rain, Wheat and Pasta!

Tuesday, June 28th, 2011

For weeks, North Dakota and Montana, the nation’s two largest producers of durum wheat have been pounded with heavy rain that will likely mean a drop of up to 47% of durum wheat production. 

Durum wheat, or “macaroni wheat”, is the hardest of all wheat types and that together with its high protein and gluten content make it the perfect wheat to be used in the manufacturing of pasta.

Due to the heavy rains farmers have been unable to get crops planted and even now they are out of time to plant crops in time to avoid the pre-winter frosts and will likely have a little more than half of the durum wheat production as normal, affecting prices of related products all over the world.
Durum wheat was up over 52% in May and the May U.S. pasta prices were the most expensive on record while other durum wheat producers like Canada saw prices jump 47% in May.  With fewer acres of wheat being produced the pasta prices will be affected accordingly.

Companies producing pasta products like Kraft with their Macaroni and Cheese and Campbells with products ranging from noodle-based soups to Spaghettios, have already announced increases in many of their products due to the lack of durum wheat production and subsequent higher durum wheat prices.

In product categories such as this one it is more important than ever to make sure that you are doing everything you can to keep the cost of goods controlled with tighter contracts containing index terminology and keeping the pricing you receive as competitive as possible. 

When the supply of product takes a huge decrease in relation to its demand, the opportunity for competitive pricing events becomes a little more difficult, as vendors will have plenty of places to sell their product. 

This may be a time to get more creative in other ways as far as length of contracts, other services or products you may agree to take on, or other considerations that will allow you to get competitive pricing on a high demand product category.  It is hard to predict what climatic conditions such as all of the spring rain will do  to agricultural products, but smart procurement professionals can learn to leverage other techniques in order to keep their costs for products affected by these conditions under control.

For more information on SafeSourcing and how we can assist your company with sourcing these goods and services, please contact a Customer Service Representative for more information.

We hope you have enjoyed last week’s  Five Part Series and look forward to and appreciate your comments.

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Is it possible to compress prices in this market? Commodity prices are rising aren’t they?

Tuesday, June 14th, 2011

This is the precise reason why some companies are profitable and others are not. Just because the commodities that are the basis for products we buy are up, is no reason to not try and compress pricing through the use of e-negotiation tools or other more traditional methods. With that said e-negotiation tools will make the process much easier and insure compression in a much shorter period of time.

There is a lot that goes in to the products companies buy and maybe even more in the prices they pay. Two things are certain. There will always be suppliers that want to bid on your business. There will always be suppliers that are willing to invest to get your business. This dynamic is what will allow you to compress prices in an up market.

However, there is work to do on your part in order to make sure you are sourcing the categories or products that make the most sense at any given point in time. Here are two things you can and should do. Check your current contracts. Those that are over two years old with the same supplier will be more likely to drive savings. Check the commodity markets for specific commodities that will impact your pricing. As an example, the price of oil is up so freight will be more expensive. A great place to check commodity data is index mundi. You can check current and historical commodities and product related pricing.

Understanding everything about what you re buying and what drives its prcing and using the proper tools to leverage the supply base can and will result in price savings even in an up market.

We look forward to and appreciate your comments.

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If you treat suppliers fairly and openly they will continue to participate in your strategic sourcing events.

Thursday, May 26th, 2011

We regularly conduct surveys as part of our SOP when we have completed an online e-RFX. These surveys are pivotal to ensuring that participants in our customer?s events were treated fairly. What our suppliers have told us makes events successful for them and would encourage them to participate again even if they did not happen to be the low bidder in a particular event is that this is an educational process for their company and ultimately becomes a way to do old things in a new way. To a company our suppliers encourage the following. Openly communicate with all suppliers and make sure they understand everything and are completely comfortable with specifications, terms and conditions, quoting instructions etc. Take the time to be complete even if they have participated in the past. Make sure they have no questions.
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Here is a sample list of questions that should be considered when inviting or encouraging suppliers as? participants.

1.?Does the supplier understand that there is no cost to them to participate?
2.?Do they understand they will be trained at know charge?
3.?Do they understand event timing and requirements?
4.?Does the supplier understand the terms being used and how they apply to a strategic sourcing event such as?
a.?Current Price
b.?Reserve Price
c.?Index Price
d.?Mixed price evaluation
e.?Low Quote
f.?Low quote indicator
g.?Last entry indicator
h.?Funds
i.?Terms
j.?Notes
k.?Extensions
l.?Matching quotes
m.?Event? rules
n.?Product specifications
o.?Samples
p.?Award of business

At the heart of it, this is common sense. Treat others as you would like to be treated. Unfortunately many companies don?t always follow this practice and as such, it negatively impacts the sustainability of their strategic sourcing program.

We look forward to and appreciate your comments.

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It’s 2011; do you know where your supplier data comes from?

Thursday, May 12th, 2011

Data models incorporated into effective e-procurement supplier data management programs should be extremely complex. This is why they are much more than a simple online directory. In fact, properly designed high quality supplier databases should be able to provide much of the data you might find in the opening pages of a detailed Request for Information or RFI.

A simple query of this data such as, “show me all companies within a 500 mile radius of the home office zip code that provide this defined set of products and that meet the following safety certifications”, should produce an accurate, verified list of supplier options that benefit the buyer and streamline the procurement process. Additional queries are typically used to summarize additional information related to defining the potential suppliers identified. Providing a list of attributes such as business description, sales volume, years in business, corporate officers, product performance ranges, etc. is the logical next step. The drill down through available information continues from here as the results provided become more refined with each query. As you can recognize, effective supplier data management involves the retrieval of valuable information from a data source that includes a substantial number of records and classifies the results according to the parameters defined.

Where does your data come from and how often do you choose a new source of supply provided by this data.

We look forward to and appreciate your comments.

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Why procurement and supply chain professionals need e-procurement tools more than ever.

Thursday, April 14th, 2011

Procurement and other supply chain professionals have developed and nurtured existing relationships within their incumbent suppliers for years and in some cases decades. Too often, this has led to incumbent suppliers becoming to comfortable. The feeling of entitlement begins to creep in and some suppliers feel as though their business will be renewed annually. Too often this is true.

This author has often said that the job of buyers, category managers, procurement executives and other supply chain knowledge workers is the most difficult job in all of retail and retail distribution. These professionals are literally swamped. Quality, safety, environmental issues coupled with the enormous amount of new product offerings is overwhelming. Just conducting the basic research required to identify potential new sources of supply, finding the correct contact information as well as determining if the company has the capability to meet your needs. All of this is before you even sample, price or test new offerings. No wonder it is so easy to just stay the current course. This however would be a mistake.

A general rule of thumb that this author has always ascribed to is if you are doing business with a current supplier for more than three years and are only negotiating with that supplier, your prices are probably too high. The question is how can you find out?

That is where e-procurement tools come in to play. I won’t advertise here, but if you were to Google e-procurement or reverse auctions etc. any number of companies will come up. Or if you were smart, you just click this link and have measurable savings in less than 30 days and often faster. Visit SafeSourcing.

We look forward to and appreciate your comments.

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So you want to source from foreign countries?

Thursday, March 24th, 2011

The idea is that you hope this will allow you to compete with larger companies that have been sourcing lower cost products from these regions for years. So how can you catch up in a much shorter period of time?

If you’re dead set on moving forward and adding this strategy to your tool kit, the first and maybe most important step is to make sure you are working with a quality e-procurement solutions provider that should already have relationships in place with agents, 3PL’s and other companies that can manage much of this process for you and at a fraction of the cost of doing it yourself.

The National Customs Brokers and Forwarders Association of America www.ncbfaa.org can put you in touch with customs brokers and freight forwarders who can help you import your goods. Many of them offer informational websites that contain what is required in order to find the right customs broker or freight forwarder for your shipments. Your e-procurement solutions provider can also help you manage this process with third party logistics providers or 3PL’s in areas like ocean bound freight and national and local delivery and distribution that you may not have any experience in.

Companies can also visit the following website www.aapa-ports.org  (American Association of Port Authorities) for assistance with the technical aspects of the logistics industry including directories of custom brokers and freight forwarders.

This process is fraught with risk, but for growing companies that plan properly and use the right resources, there is profit to be made.

We appreciate and look forward to your comments.

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Supply Chain Disruptions Come Without Warning

Tuesday, March 22nd, 2011

Most of my customers know that I recommend Sourcing Innovation very highly as a world class source of supply chain and sourcing information.

 The following post titled Supply Chain Disruptions Come Without Warning that focuses on the multitude of issues that can have an immediate impact on our supply chain. Enjoy.

Everyone is still talking about the recent Japan earthquake and the ramifications it will have on your supply chain for weeks, months, and years to come. No one is talking about the fact that, thanks to global warming, forest fire season is now upon as and that more than 30 wildfires raged through Oklahoma last weekend (Source) and that it only takes one fire to destroy a plant or distribution centre.

But it doesn’t take a natural disaster or a political uprising (such as the recent ones in Egypt and Libya) to instantly shut down your supply chain. A simple regulatory decision can have ripple effects through your supply chain. On March 10, the US Transport Security Administration (TSA) issued an emergency amendment to security measures that would take effect immediately that required freight forwarders with air cargo operations at non US locations to request additional information for all shipments on each master airwaybill (MAWB). As a result, Air Canada had to embargo all cargo flown to the US until further notice until they could be sure they were in compliance. (Source) Now, this embargo only lasted a day, but it could have lasted a week had the regulatory change been more onerous. But like a natural disaster, this disruption came without warning to shippers who relied on Air Canada to deliver their goods to the US.

That’s why you need contingency plans drawn up and ready to go, because you never know when you will need them.

We look forward to and appreciate your comments.

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The experts say that the price of everything is going up! Can NAFTA offer a clue as to how to control this?

Wednesday, February 16th, 2011

As oil heads north of $100 per barrel again, the resulting higher fuel costs will again force global trade to focus on such as USA, Mexico and Canada versus the Asia Pacific region which is more than 7500 miles away.

Hopefully we learned our lesson less than three years ago? If so, we should all be aware of suppliers that will not require us to buy goods from so far away that transportation and logistics costs will kill our P&L.

Let?s remember that the North American Free Trade Agreement or NAFTA allows us to not just near shore many of our purchases but to localize them. This reduces transportation expenses. North America is made up of the United States, Canada and Mexico. Although NAFTA is primarily focused on agricultural products traded between North American Country?s it also represents one of one of the most successful trade agreements in history and has contributed? significantly to increases in agricultural trade and investment between the United States, Canada and Mexico. There are plenty of opportunities in the regional low cost manufacturing bases could have a related regional impact on keeping? costs lower on many types of retail products.

Finding tools that can aide our search in finding new sources of supply is imperative as demand rises and causes strain on commodities. Are you aware that a tool like this already exists which can provide data at a glance on 928 general merchandise suppliers located in Mexico, 1,585 Grocery Suppliers located in Canada, and 1,940 Pharmaceutical suppliers located in the United States. If not, please visit the SafeSourceIt Query Tool to learn more. Your P&L will thank you and so will your customers when you don?t raise their prices.

We look forward to and appreciate your comments.

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Ready for Valentine’s Day? What about the other 364 days of the year?

Monday, February 14th, 2011

Today hundreds of thousands of people will be out in force going to malls, grocery stores, jewelry stores and flower stores looking for that item in the 11th hour that they will likely pay too much for in order to show someone how much they value them.

It sounds crazy but this same craziness is exhibited all over the world in the purchasing departments of companies who pay a premium for inventory after a contract expiration date has passed, keep incumbent vendors even though they are getting overcharged because it is easier and waste perfectly good excess inventory just because they have no plan for how to control it.
Like spreading the effort of St. Valentine’s Day over 365 days instead of just one, what if companies began to put the plans in place to help them source smarter and safer?

What if companies began leveraging reverse auction tools and services that allowed for the review of the BEST vendor instead of settling for an incumbent because they think it will take too long to find another vendor?
What if companies employed contract management tools that would allow them to be alerted by email so that they never miss important contract dates?

What if companies used a 3rd party to help them move their excess inventory instead of wasting it?

They may find that they end up asking themselves why they weren’t doing it all along!

We look forward to and appreciate your comments.

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