Today’s post is by Dennis Nicoletti, Manager, SafeSourcing, Inc.

While I’m not trying to reinvent the wheel here, I did want to share this information as we approach a new calendar year. Isn’t it time that we all became better stewards of the environment in whatever way we can? Let’s stop and think about how rising fuel costs impact you personally. When fuel prices soar upward you begin to consciously and subconsciously scale back; making fewer trips to the stores, fewer road trips, “stay-cations” instead of “vacations”, buy lesser octane fuel or just simply buying less of what you had become accustom to as price of goods increase. Those that are lucky enough are able to purchase more fuel efficient vehicles, either selling their “gas-guzzler”, driving them less often or simply stop driving them. It’s simple – as consumable prices begin to rise, you buy/get less. These are just a few things that quickly come to mind. Supply chain is no different. Let’s look into how rising fuel cost impacts supply chain and the downstream impacts for all of us.

Business – Rising oil prices are forcing companies to rethink many business strategies that have been implemented in the last two decades. The days of static supply chain strategies are over. With increasing costs and changing markets, companies must monitor and re-evaluate their network and supply chain strategies on a continuous basis. Hence a switch to a more flexible supply chain strategy.*

The environment – As oil prices increase, environmentally friendly supply chain strategies coincide with economically effective business strategies. Increasing cube utilization, reducing deadhead distances, and decreasing fuel consumption improve the transportation bottom line and help to reduce the carbon footprint. Similarly, strategies that directly focus on reducing carbon emissions typically improve transportation efficiency.*

Emerging technologies – The search is on for technologies that help industry reduce energy consumption and energy costs, including technologies that can reduce transportation costs. These include onboard global positioning systems with centralized information that allows for real-time monitoring of vehicle operations, aerodynamic tractor-trailers, kite-assisted ocean freight, automatic tire-inflation systems, and singlewide tires (replacing the traditional two-tire systems). Investing in emerging clean technologies or implementing operational improvements and innovation to reduce carbon footprint are all part of corporate social responsibility—an area of focus for a growing number of firms.*

Consumers – With oil prices rising, business must consider whether to transfer the increased costs to consumers or to absorb the increase internally and face smaller profit margins. In some industries (such as tires and plastics), oil is such an important ingredient in the production processes that they typically are more willing to transfer costs to consumers according to an article by David Simchi-Levi titled Operations Rules: Delivering Customer Value through Flexible Operations, published by The MIT Press.

SafeSourcing can assist you and your company to reduce costs; from fuel, to tires, to trucks, to goods not for resale as well as goods for resale…if you’re buying it today, we’ll source it for less. For more information on how SafeSourcing can assist you 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.

As always, we look forward to your comments.

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

When we help our customers run sourcing projects one of our mottos is that is must have participation and it must generate results.  Seldom will you get one without the other.  In today’s blog we will be taking a look at some of the ways you can begin laying the groundwork to cover both of these areas successfully. 

Understanding the results you need – The first thing that must be established regardless of what stage in the RFx process you are starting with, knowing the results you are looking to achieve is the first critical step.  This may come in the way of establishing who the key suppliers in a new category or for a new product of service.  During this stage another key piece may be to understand if there are any new technologies or services the suppliers are offering that you are unaware of.  Collection of data is an important result for a Request For Information stage.  Some results may deal with prices you need to see from the suppliers or a compression of current pricing that may result from consolidating disparate spends into a bigger opportunity.  Once you understand what type of results you need you can begin shaping where you begin in the procurement process.

Setting the definition of success – As critical as understanding what type of results you need is establishing the bar for which you will measure how successful the project was.  In the way of a request for information, that may mean having a list of 5 vendors who are able and experienced to handle a business like yours from which you will pick 2 to present.  Another definition for success is to not only understand what each of your locations is doing but also to understand the impact of running a procurement exercise to consolidate those 12 suppliers down to 3.  Part of understanding if the project is successful will be to understand which locations will be most effective with which of those 3 suppliers.  This requires a project that returns, by location, the current spend, incumbent, incumbent new pricing and pricing from the best of the 3 suppliers you are narrowing your choice down to.  The definition of success will create the structure of your event and the reporting that is output.

Bringing the suppliers – Part of the research of every event should be to understand the supplier landscape of a product or service.  There are some products with very little competition and there are others with great options for suppliers to participate.  Participation in any part of the RFx process is critical to achieving the results you are looking for.  Part of this process begins with screening the suppliers before the process begins through internal research or third party tools and processes.  Once you have the vetted list of suppliers you must work with them to make sure they are willing to complete the project whether in the form of an RFP response or participation in an online bidding event.  Some suppliers will present reasons why they do not want to participate and the challenge here is make sure the process does not end with the first response and if necessary raising the objection up the ladder so that they are aware that they will not get an opportunity to bid in the future if they do not participate in the beginning stages.   Supplier participation will make all the difference in obtaining the results you need.
There are many ways SafeSourcing can assist your company with getting your results and ensuring you have good supplier representation.  For more information on how SafeSourcing can assist you 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.

Todays post is by Ron Southard, CEO at SafeSourcing.

The fact is that internal collaboration is not happening in many companies and neither is collaborative aggregation.

We often hear the term collaboration or collaborative partners, collaborative supply chains, collaborative commerce or collaborative networks when we are discussing the supply chain. It rolls of everyone?s tongue like we all know what we are talking about. So this author took a look at Wikipedia hoping to gain some insight and clarity. According to Wikipedia, Collaboration is a recursive process where two or more people or organizations work together toward an intersection of common goals, and, an aggregate is a collection of items that are gathered together to form a total quantity.

Since collaboration only means different groups or organizations working together towards the same goal, that term can apply to just about any business function. However when we combine it with the word aggregate to form the collective e- procurement term Collaborative Aggregation which was coined by this author in 2006; we arrive at something potentially meaningful.

Collective buying organizations and sometimes share groups often combine purchasing volumes of like products to drive better discounts. Large companies often aggregate their purchases among departments and are more often today doing the same thing across different operating group?s or companies within a larger organizations to drive economy of scale in purchasing.

The unfortunate truth is that not much out of the box thinking is going on in this process. We are so involved in the process that we can not see the forest for the trees.

If you?d really like to understand how collaboration and aggregation can be used in your company to drive down costs and improve quality, please contact a SafeSourcing customer services representative.

We look forward to and appreciate your comments.

If your answer is yes, there is a good chance that you are paying more for products, services and related solution bundles than you should be!

Being comfortable is great. Sometimes however being to comfortable can also creates complacency. We all know we have co-workers that come to work every day and do only what they perceive their job to be. They arrive on time and leave on time. They really never do anything extra. Also, very few ideas come from these folks that are just comfortable with what they are doing and how they are doing it. They do a reasonable job, but that’s really about it.

So what happens when we apply this type of complacency to our knowledge workers in the supply chain and you know we have them? If we are being honest with ourselves; we see this situation all the time.

 Here’s an example: A buyer you know has a list of products or a category manager has a category that they are responsible for. There are only so many hours in the day and they have a job to do in order to get product to a distribution center, warehouse, store or some other location on time. They have done business with the same single supplier or couple of suppliers for a number of years. In fact the person in the job before them did business with these same suppliers and the person before that did as well. It’s just easier to not rock the boat. It takes to much time to look for new sources of supply (think Google) and after all one can only manage so many relationships in the first place (Excuse). Finally the buyer is comfortable with product quality and the pricing has not gone up to much over time.

With the help of a good eProcurement provider, this situation is easily rectified, but you need to be open to change. This is normally led from the top of the organization, not the worker we mentioned above. The following is a partial list of what you can do to eliminate complacency and support the fact that you knowledge workers don’t have a lot of free time.

1.   Provide your e-procurement company with a list of your suppliers by category.
2.   Provide your e-procurement provider with a complete list of products carried by each supplier.
3.   Ask your e-procurement provider to produce a list of new sources of national and regional supply  with a facility within a reasonable radius of each distribution center or warehouse
4.   Ask your e-procurement provider to provide data on each supplier’s including incumbent’s safety and environmental certifications.
5.   Ask your e-procurement provider to provide supplier background information such as years in business and user references.
6.   Run an eRFI on each of these suppliers.
7.   Visit the best few as well as your current suppliers.

If you’re interested, additional steps to this process can be provided by SafeSourcing as a part of our best practices deliverables which are included in our event pricing. The SafeSourceIt™ Supplier database includes over 457,000 global sources of supply that can be sorted with a variety of filters such as country, county, postal code or mileage from a particular location, plus many more.

If you’d like to learn more about new sources of supply for your cost of goods, expense or capital expenditures, please contact a SafeSourcing Customer’s Services representative.

We look forward to and appreciate your comments

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

Very few of the suppliers you do business with are hired to perform a service that is nothing more than a convenience with no ROI or process improvement attached to them.  Unfortunately many of those suppliers do not provide their customers with an accurate way of measuring just how good of a job they are doing for them.  By not providing that picture they are actually setting themselves up to have to compete with other vendors for business they already have down the road.

In today’s blog we will be looking at some of the Key Performance Indicators (KPIs) you should be asking your vendors to supply with on at least a quarterly basis if not a monthly or weekly basis should the need demand it.

Issue resolution – Every company and their suppliers eventually run into issues in the course of doing business.   Delivery issues, quality issues, supply issues, service issues are all areas that come up how your suppliers support you during these times is a good indicator of how much they value your business.  Most procurement departments have their own supplier scorecards for this KPI but asking your suppliers to provide them for you as well is a nice way to see if their tracking of your issues matches your methods.

Delivery Performance – Delivery performance is one of the most important KPIs that can be tracked.   Having or not having the products you need is even more important than the cost of that item because if you don’t have the services and products you need to provide your customers what they need, you lose those customers and getting them back may never be an option.  Measuring the length of time from order to delivery all throughout the year will tell you a lot about the suppliers you do business with as does tracking instances were RUSH orders were required and how those suppliers were able to accommodate your special needs.

Process savings – Process savings can be tricky because often they are associated with “soft expenses,” that is expenses that you would have had pay but your suppliers, through some benefit of their service, were able to accomplish for you.  Process savings are important to many suppliers and you should hold them accountable for reporting how they are doing for you on a regular basis especially if their cost improvements are not quite as obvious.  Time saved for your employees due to activities they handle for you, software tools that make your employees more efficient, or consolidated efforts that create central points of communication are things that provide savings to your company and should be prepared by your suppliers and vendors.

Cost Improvements – Many suppliers do a great job of partnering with companies to make sure they are purchasing the products and services they need.  Reducing cost due to analysis of the business is part of of what many suppliers offer.  They will review your business today and make sure you aren’t purchasing items or services that are more than what you need, recommending alternatives that instantly create cost savings.  Improvements, in material, logistics, processes and product sources are all important pieces of this process and should be reported by your suppliers on a frequent basis so that you have a centrally visible point to monitor their effectiveness for your company.

For more information about how we can help you develop KPIs to request from your vendors, 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.