Archive for the ‘Business Sourcing’ Category

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What is the benefit of a ranked reverse auction?

Thursday, June 29th, 2023

 

Today’s post is by Ronald D. Southard, CEO at SafeSourcing Inc

A tool that can be effective when running a reverse auction is called ranking. While this feature is not used all the time, it can be of strategic importance when trying to get to the best net landed cost for products that have very slim margins at the supplier level. The feature can be set up to let all suppliers know where they rank or a select number of suppliers like the top five (5). The feature can also be turned on for a specific time during the auction like in the last 5 minutes. As an example, you might have tight bidding for a particular commodity-based product. Only the low bid vendor knows that they are indeed the low bid and resultingly is not entering any more price adjustments. If ranking is deployed, vendors can find out if they are 2nd or 3rd etc. and this may entice them to try one more or make multiple more entries if their desire to win the business is strong enough. This is particularly true if the bidding activity has been robust to a point with the low-price indicator switching back and forth between multiple vendors.

It is the deep understanding of markets along with the use of tools like ranking amongst others that are included in strategy reviews with our customers that allows SafeSourcing to regularly exceed customer expectations across all spend areas. Our average annual savings against all categories are more than 24% beyond what you can negotiate on your own.

SafeSourcing is a Procure to Pay SaaS based provider of a number of e-Procurement solutions and associated white glove services that are part of our SaaS offered SafeSourceIt™ eSourcing suite.

For more information, please contact a SafeSourcing Customer Services Associate.

 

 

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Same Question a Year later! Are you paying the same for less?  

Tuesday, June 27th, 2023

 

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

With all of the prices rising some companies are deciding to keep the prices the same but reduce the amount of product that goes into the packaging.  If you are not yet aware of this, it is called shrinkflation.  Shrinkflation is the practice of reducing the size of a product while maintaining its original sticker price.  This practice is usually used by companies in the food and beverage industries to increase profit margins or maintain them when there are rising input costs.  This practice is not new but it does escalate during times of inflation.  Companies are trying to find ways to deal with the rising costs for their ingredients, labor, packaging and high cost of transportation.  One of the main reasons for this practice is that manufacturers know that customers will notice if a product increases in price but they may not realize that a package may contain less product.  Most consumers do not pay attention to the weight, quantity or number of sheets contained on a roll of toilet paper.  But they would however notice if the price increased from their last time of purchase.  So when you are out shopping next time you may want to pay attention to the products you purchase and maybe search for an alternative one instead.  Below are some products that have been reduced.

  • Toilet Paper Rolls
  • Paper Towel Rolls
  • Tissues
  • Chips
  • Gatorade
  • Ice Cream Cartons
  • Yogurt
  • Family Size Boxes of Cereal
  • Candy Bars
  • Coffee
  • Cat Food
  • Dog Food
  • Trash Bags
  • Toothpaste

Interested in learning how SafeSourcing can help your company save money during these challenging times?  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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You can still improve gross margin and net earnings substantially in this market.

Monday, June 26th, 2023

 

Today’s post is by Ronald D. Southard, CEO at SafeSourcing Inc

Example: Prove me wrong if you think you can!

Assume a $150M Retail Company with industry earnings of just one percent or $1.5M. Additionally cost of goods for this company is 70 percent or $105M. Let’s also assume this company were to only source ten percent of their for-resale COGS or above the gross margin line spend or roughly $11M. With below industry average savings of only ten percent, total savings generated would be $1.1M which is a direct impact to net profitability. If all other segments of the P&L perform to plan and all savings are recovered during the same business calendar year net profitability would increase to $2.6M or a 73% improvement.

NO BS Here! If you don’t believe me, I will be glad to personally sit down with your CEO or CFO and Finance team and prove it to you! Imagine what else you could do to earnings if you also attacked your Expense in the same way.

Companies can begin with SafeSourcing almost immediately (SaaS/Cloud offering) with no risk (Cost Neutral Pilots) and no IT involvement at all, why don’t more companies use eProcurement tools. That’s a great question! Probably because they are embarrassed to not already be getting these results.

If this author were you, I just could not ignore this type of opportunity. If you’d like to learn more, please contact a SafeSourcing Customer Services Account Manager. Or me.

We look forward to and appreciate your comments.

 

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Why don’t you use Reverse Auctions?

Friday, June 23rd, 2023

 

Today’s post is by Ronald D. Southard, CEO at SafeSourcing Inc

 Understanding a Reverse Auction according to Investopedia

In a reverse auction, the buyer puts up a request for a required good or service. Sellers then place bids for the amount they are willing to be paid for the good or service, with the winner being the seller prepared to accept the lowest amount.

Reverse auctions gained popularity with the emergence of internet-based online auction tools that enabled multiple sellers to connect with a buyer on a real-time basis. Today, reverse auctions are used by large corporations and government entities as a competitive procurement method for raw materials, supplies, and services like accounting and customer service.

Here’s a real simple truth! If you are not using this tool, you are paying way more than you might think. And your team cannot get anywhere near the pricing that reverse auctions generate. I watched a large company yesterday reduce the cost of any office supply category by 31% beyond what they negotiated.

You can view my comments from an earlier post titled Just what do we mean by eProcurement White Glove Services that supports why our savings average over 24% better than what companies can do on their own most of the time.

SafeSourcing is a Procure to Pay SaaS based provider of a number of e-Procurement solutions and associated white glove services that are part of our SaaS offered SafeSourceIt™ eSourcing suite. That includes our SafeSourceIt™ Global Supplier Database  that includes over 557,000 vendor/suppliers.

To learn more, please contact a SafeSourcing customer services associate.

 

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Specifications?

Wednesday, June 21st, 2023

 

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

We all buy things, and we generally look for the best deal we can get, but how do you know you are getting the right thing? Recently a friend tried out a new shopping website and found a great deal on a car jack. This is something that we could all use if we do our own maintenance on cars or just want to be prepared if we need to change a tire. This particular site offered what seem like a reasonable price, much less than you usually see, but not low enough to trigger red flags. So, the car jack was purchased, and they awaited its arrival.

A few weeks later when it arrived, this car jack was approximately three inches high. This was some sort of tiny model of a car jack, and well above the price something like this would seemingly go for. After double checking the website and reviewing the details, this car jack was indeed just three inches high and through some creative photography, no one would be the wiser that it wasn’t full size unless you read the specifications.

There is an important lesson here. You must read specifications carefully to know that what you are purchasing is the right product. This will help you get what you need, but also help you to compare and understand any differences within that category of product. Sometimes by reading about what you think you need; do you discover you may in fact need something else.

This idea goes for sourcing as well. When looking for a product or service, your specifications should be clear and detailed, because otherwise you might get a miniature car jack that only works for small model cars. A procurement partner, like SafeSourcing, can help you come up with the right specifications for the product or service you need and also help to find those that would be a good fit in providing that service of product.

For more information on what the SafeSourcing team can offer you, 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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Work Ethic, Work from Home and Return to Office!

Thursday, June 15th, 2023

 

Today’s post is by Ronald D. Southard, CEO at SafeSourcing Inc

Recently we bought a new home near where our children live. It sits on the water but requires a lot of renovations and updates. As such we have been doing a lot of personal sourcing, so thank God for our career choice.

One thing I have been able to observe is the variety and quality of work performed differs drastically from provider to provider. I will not trash those that have performed poorly because they have been fired and I ended up choosing them. That happened because they showed up late, left early, prepared poorly, cleaned up awfully and communicated terribly for just some examples.

However, one individual stands out as to what I would be looking for in someone that works for me. He is a jack of all trades and a master of many from replacing a drainpipe to finish carpentry and beyond. He is of a specific age group closer to mine. The first day he arrived to begin work was at 7:45 a.m. He was not in pajamas, was well groomed and dressed appropriately for the work to be done that day. His preparation was fantastic, his cleanup impeccable and communication as to what was to be done (SOW) and any open issues (change Order) spot on. He brought his coffee and water with him and took a one-hour lunch break.

I’m sure that in today’s work from home environment and the push to return to the office have a lot to do with the lack of this type of quality in today’s workforce regardless of industry.

Many years ago, after the service and college, when beginning my career at a very large well-known company, my dad said to me, be the first to show up in the morning, the last to leave at night and work harder than anyone else does. Great advice and hard to find in today’s workforce either from home or in the office.

I don’t hire folks like this So, what are you seeing?

SafeSourcing is a Procure to Pay SaaS based provider of a number of e-Procurement solutions and associated white glove services that are part of our SaaS offered SafeSourceIt™ eSourcing suite.

For more information, please contact a SafeSourcing Customer Services Associate. if you want quality representation from true professionals

 

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If you’re reading this, you’re overpaying for everything.    

Wednesday, June 14th, 2023

 

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

Most readers will see this title and keep scrolling. Fewer will click to read part of the post. Fewer still will read the entire post. Almost nobody will do anything about it.

This entire post is 215 words. It takes 15 minutes on the phone to learn more. It is invaluable to your company to invest the time.

Last week, I shared a post about a wide variety of spend categories and the overpayment we corrected – or savings we created – for our customers. Across those 9 categories the average savings was 28.79%. A link to that post is here.

With all the excuses flying around like global conflict, recession fears, inflation, and whatever other excuse du jour, it’s amazing that more companies fail to step up to the task and stop overpaying.

Perhaps we’re all too desensitized to cost increases. Maybe we believe the cost increases are all correct and appropriate to the market.

But what if they are not? What if the costs are rising and it is increasing vendors’ margins while further reducing yours?

I hope you made it to this point. We offer a 100% risk-free trial to prove what we say we can do. You invest the time; we prove our value.

You made it this far, so why not take the next step?

For more information, please contact SafeSourcing.

 

 

 

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Logistics Service Provider

Tuesday, June 13th, 2023

 

 

Today’s post is by Ronald D. Southard, CEO at SafeSourcing Inc.

Logistics outsourcing involves a relationship between a company and an LSP (Logistic Service Provider) which, compared with basic logistics services, has more customized offerings, encompasses a broad number of service activities, is characterized by a long-term orientation, and, thus, has a rather strategic nature.

An LSP is really what most people would see as a traditional 3PL provider offering a combination of warehousing and transportation services or one or the other. As global and multi-national providers enter the game, things have certainly changed, but the Logistics Service Provider at its core is fundamentally the same.

Third-Party Logistics Provider (3PL) involves using external organizations to execute logistics activities that have traditionally been performed within an organization itself. According to this definition, third-party logistics includes any form of outsourcing of logistics activities previously performed in-house. If, for example, a company with its own warehousing facilities decides to employ external transportation, this would be an example of third-party logistics. Logistics is an emerging business area in many countries.

If you’d like to learn more about how SafeSourcing can assist in managing your selection of a variety of logistics issues, please contact a SafeSourcing customer services associate.

 

 

 

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Is a Digital Mind (Ai) a bad thing? What is a digital mindset?

Thursday, June 8th, 2023

 

Today’s ramblings are by Ronald D. Southard, CEO at SafeSourcing Inc

I’m thinking a lot about Ai these days. I’m also researching and reading a lot about Ai these days. While I don’t hope to become an expert, I do hope to understand the benefits of deploying solutions that use Ai, the impact they may have on associates that use the solutions resulting in an even more intelligent solution that may ultimately replace them. That’s scary to any worker to hear. Maybe it will result in an even better job. Who knows?

According to an Article Titled Developing a Digital Mindset in the Harvard Business Review, a digital mindset is” Learning new technological skills is essential for digital transformation. But it is not enough. Employees must be motivated to use their skills to create new opportunities. They need a digital mindset. Psychologists describe mindset as a way of thinking and orienting to the world that shapes how we perceive, feel, and act. A digital mindset is a set of attitudes and behaviors that enable people and organizations to see how data, algorithms, and AI open up new possibilities and to chart a path for success in a business landscape increasingly dominated by data-intensive and intelligent technologies”.

Now what happens if we apply this theory to Ai itself. While we launch new companies, develop new products and programs that enhance and replace current company offerings using Ai, are we better off or worse off. I guess that depends on your perspective. Profit and earnings at all costs so one can retire a millionaire or a billionaire regardless of what happens to associates bothers me. Unfortunately, there are a lot of those folks around. There are many that never even ran a profitable company. Theory and great presentations based on future technologies tickle the hell out of investors.

Here’s what I prefer. Build and run a profitable eProcurement company that is growing. That’s uses its tools to assist companies in reducing their costs to improve their gross margins and net earnings, support their growth plans and retain, retrain where necessary and grow their associate headcount. I’ll sleep better at night, and I won’t have a robot learn how to tuck me in.

SafeSourcing is a Procure to Pay SaaS based provider of a number of e-Procurement solutions and associated white glove services that are part of our SaaS offered SafeSourceIt™ eSourcing suite.to learn more, please contact a SafeSourcing customer services associate.

 

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Evaluating eProcurement Solutions – Part 1 of 5: Technology

Wednesday, May 31st, 2023

 

Today’s  is from our SafeSourcing Blog Archives.

Strategic sourcing companies each have their own unique offering whether that is based on a price model, category focus, supplier database or some other defining trait, but the overall goal is to help their customers source products and services easier, smarter and with an end result that creates more value than the customer could achieve on its own. Over the next five days we will be looking at some of features and characteristics you should be looking at when evaluating a new or existing sourcing partner. Not all of the characteristics will carry the same weight for all companies but each should be an area you examine when evaluating who to partner with.

Browser and Mobile Device-ready – We live in a world where the expectation, not the exception, is that business related tools and solutions will be available in some form to users wherever they are. Whether the solution is a true cloud based Software-as-a-Service model or not, customers expect to have some level of functionality and access to data from their laptops, tablets and smartphones. Part of ensuring this is possible is the amount of development resources that are dedicated to testing new versions of the major web browsers on the market as well as providing a mobile ready interface if not a native iPhone or Android application that can be downloaded and secured.

3rd Party Data integration – Strategic sourcing companies deal with a lot of data much of which they house in their own internal system and make available for analysis and reporting. Many times, however, information will need to then make its way to a Contract Management system, PO system or catalog system that is being used already. In the perfect world, you would select a strategic sourcing partner that had all three of these modules as well as others where the integration was already completed and data flow seamless. Since this is not possible for many companies, the ability for their eProcurement partner to provide data feeds to their existing systems is very important and valuable piece to evaluate when looking at strategic sourcing partners.

Reduced IT involvement – IT departments by and large are one of the busiest departments in most companies. Their projects are scheduled in many cases, months ahead of time so that effective planning can be put together to ensure the project’s success. When this is coupled with the fact that technology is moving so fast and both software and equipment are advancing than most IT departments can keep up, it is understandable that getting a new project on their schedule can be difficult and many projects can stall for as much as a year if they require a high degree of IT involvement. That is one of the reasons why hosted cloud based solutions are gaining more popularity because the involvement from IT is reduced and the capital cost of equipment is reduced as well. IT involvement in the deployment of an eProcurement solution is something that should be considered carefully and balanced against other implementation timelines.

With a world that changes daily from technological perspective, it is important to understand the foundation of the solutions you plan to use to ensure that those tools and the technology they are designed around will continue to provide you with the best in class solutions moving into the future. Tomorrow we will look at the libraries and databases from which your sourcing events will be based on. 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.

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