Archive for the ‘Business Sourcing’ Category

Zombies, Israel, and the Tenth Man!

Thursday, August 22nd, 2013

Today’s post is by Mike Figueroa, Account Manager at SafeSourcing.

I can’t tell you how many times I’ve wished someone would have been around to prove me wrong just before I made one of many colossal mistakes I have to my credit… Some mistakes aren’t just about getting it wrong, but are paid for by what we COULD have gained and instead missed out on.

My wife asked me to go see Brad Pitt stave off a zombocolypse in “World War Z”, and while I didn’t have great things to say about the movie, one concept it played off of piqued my interest. In the Film, the Israeli leaders subscribed to a formalized mechanism for being prepared for what they might overlook. The notion of “The Tenth Man” is that in a 10 man quorum, there should never be more than a consensus of 9 because 1 man should always be considering the alternative, no matter how improbable, because the Israelis knew that humans are biased toward predicting what’s most ”normal”.

We human beings are fantastic organizers. We can recognize patterns better than any other organism on the planet. The only problem with this is that we have a natural bias toward looking for a CONTINUATION of patterns. This can cause us to miss out on opportunities that don’t fall in line with what we expect to see, or continue practices that are no longer optimal because of the history we have using them. This is why we need mechanism in place within our organizations to play devil’s advocate, to prove ourselves wrong when we’re making assumptions that are bottlenecking our opportunities.

When we first talk to businesses, they are often under the assumption that the suppliers they are working with are their only option, or that they have no leverage to work with to avoid rate increases or to increase intangible value. We work to challenge those assumptions by exploring a wide variety of options, and searching through our extensive database of suppliers. Ask one of our representatives about how we do the legwork to identify the assumptions that are preventing you from taking advantage of your opportunities. Let SafeSourcing be your Tenth Man.

We look forward to your comments.

Finding the Right Payroll Service

Tuesday, August 6th, 2013

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

One of the questions we are asked by many of the companies we work with is whether or not it makes sense to take Payroll Services through an eProcurement process.? Our answer is ?Yes?, however due to the sensitive nature of this service we add that for services of this nature, all of the factors, including price, need to be considered to make the decision for their company.

Today we will be looking into some of those areas that should be considered when looking to source payroll services for your company

The Fees ? As stated above, cost is not the only thing that should be considered when it comes to services, however part of the cost that does need to be looked at is the breakdown on various fees associated with the service.? Printing checks and tax forms, online access for employees and garnishment fees are just some of the fees that payroll service companies can charge you and they all need to be examined so that you know which fees apply to your company and which fees you may want to gather competitive pricing on.

The Experience ? Experience in your industry is crucial, especially when looking at new vendors you have not dealt with in the past.? Many times this type of information can be collected in an RFI or through basic research by an internal team or through a strategic sourcing partner if you have one.

The Service ? Going hand in hand with a payroll company?s experience is their reputation for servicing their existing customers.? In some cases basics about a company?s service can be collected through an RFI but many times in the course of due diligence and checking the references of a ?short list? of vendors this information can be obtained.? Asking about how accessible a company is when an issue arises and how quickly they return calls and emails are things that will help make the final decision in the end.

The Tools ? With the increasing use of the internet by companies wishing to integrate 3rd party tools into their own portals or intranets, the tools a payroll service company provides are an important part of the value equation that is used to award business.? Providing HR related documents, access to pay stubs and tax forms and other payroll related tools may just be the difference maker in the end especially if two or more companies are close in every other aspect.

Payroll services, like many services are more complex projects to run but with clear goals and defined decision making criteria established in advance, they can be very successful.? For more information about sourcing services like payroll, please contact a SafeSourcing Customer Service Representative.??

We look forward to your comments.

Procurement Camouflage! At SafeSourcing we’d rather wear ORANGE.

Monday, August 5th, 2013

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

I began working in the Supply Chain in 1970. I was in the US Air Force and actually worked in Base Supply. My certification was inventory management specialist AFSC 64550 and then supervisor AFSC 64570. We did not have category managers at that time, although our job was similar.  We had to understand our category or categories in depth, evaluate usage, buy in advance of need, schedule shipments to just about anywhere in the world and do it on time and within budget. No $600 toilet seats in this job as the country was still at war. So at this point I have pretty much seen it all. Technology has and continues to advance at an ever increasing pace. Individual areas mentioned  above have become areas of specialization such as logistics. All sorts of naming conventions for a particular practice like category manager have come and many have gone.

So what’s the point you ask? The point is that the base function of procurement  has not changed that much from my description above, nor has how one attacks the overall procure to pay process. And that is precisely where the term camouflage comes in. We don’t need Wikipedia or an online dictionary to define the meaning of camouflage.  Camouflage is worn in order to blend in to the current environment. It is worn to be the same so that others cannot see you for what you really are.  On the other hand, hunters wear orange so that they can be seen and seen clearly as just  that; different! Different from the trees, different from the animals, different from the grass. Very plainly it is worn to be seen as a hunter and not as the prey. The camouflage keeps them safe.

I think many companies in the Procurement, eProcurement and Procure to Pay space wear camouflage. They live in what Nido Qubein the President of High Point University likes to call “A Sea of Sameness”. They are doing the same things that others have done for years in the same way with little to differentiate them from one another. Technology is not the differentiator needed in this space, ideas are! Executable ideas are the foundation for wearing ORANGE, for standing up and standing out.

Let me give you an example without going into too much detail. After every RFI, RFP or RFQ we run at SafeSourcing, our SafeSourceIt™ system  automagically sends  a survey to all participants. This includes suppliers as well as the host. We use our SafeSurvey™ tool.  Think of Survey Monkey but better. Many of our customers use this tool for their internal and external communication.  You can’t imagine all of the ideas we get from this simple process. The information allows us to grow our sourcing intelligence as well as our application design. Last week we received a survey from a customer that participated in a very complex event for Safety Supplies. The input was not positive on the surface. Comments centered on the complexity of entering the data in the way that we required. I was something like this. We have never been asked to enter data in this way (our secret sauce). Although the tool was easy to use with no screens to toggle between, why would you collect data in this format (we call in decile based sourcing).  Later that week, this same supplier called me and said I have used many eProcurement tools and the more we think about it, although it was tough for us to price this way (oh well), we are thinking about using SafeSourcing in order to bring our costs under control. Can we set up a meeting? By the way, savings for this event were seven figures.

What caused this type of response? ORANGE thinking (out of the box) swimming against the current to get out of the sea of sameness as our camouflaged competition.

If you’d like to learn more about how to attack your costs in a more creative way, please contact a SafeSourcng customer services representative.

We look forward to and appreciate your comments.

Best practices in executing a Security Guard eProcurment event?

Tuesday, July 30th, 2013

Today’s post is by Ryan Melowic; Assistant Vice President of COE at SafeSourcing.

The category of Security Guards can be very complex when working with a national host with many locations.  However, it is manageable as long as you follow these suggestions below.

First and foremost, it is extremely important that you determine a baseline for each location requiring guard service.  This baseline should consist of total average hours by job title per week, billable rate by job title, average pay rate by job title and average upcharge by title.  This data will allow your company to understand the current environment and create a basis for comparison once bids are received.

The second step would be to create specification documents.  A  SOW (Statement of Work) will also be required for each job title.  A clear understanding of the training that will be involved for new vendors as well as the employee benefits that will be offered.  This is extremely important because it wouldn’t be very advantageous to declare savings in an eProcurment event if vendors are skimping on training and benefits. 

Third, finding quality vendors who know the industry and can service your company on a regional or national level is important.  Although there are a lot of vendors in this category there are maybe a couple of handfuls of vendors that can service a customer with many national locations.  Therefore, providing the vendors a list of locations and having them indicate what locations they can service is critical

Finally, the way the data is reported back to the host after the eProcurement event will determine how quickly the awarded programs can be contracted and rolled out.  A view of the data that provides an analysis of what your company could save by simply remaining with the incumbent to a more aggressive analysis as to maximum savings.   There may even be an analysis of the data that suggests a hybrid approach between the two scenarios.  Whatever way you chose to go with the award, just remember to have a good baseline mentioned earlier.  Otherwise making an award decision will be next to impossible.

For more information on how we can help you with your procurement needs 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.

Why is the Waste Removal Category a Great Choice When Executing an eProcurement Event?

Wednesday, July 24th, 2013

Today’s post is by Ryan Melowic; Assistant Vice President of COE at SafeSourcing.

Every company which has brick and mortar stores or facilities has to dispose of their waste.   Currently throughout North America there are a few major national players, substantially more regional players and a boat load of local suppliers to service your company’s stores and facilities.

In this category companies are faced with one major dynamic.  The dynamic is that many times  waste removal contracts are signed at  the store or facility level.  Therefore, each store or facility has a separate expiration dates which is a nightmare to manage the more stores and facilities your company has. 

SafeSourcing has in-depth experience with the Waste Removal category.  We use our category knowledge to drive saving and mitigate your companies risks.  Savings are achieved by process improvement  as well as more competitive rates.  Risks are mitigated by nationally locked in fuel rates and contract expiration dates being consistent across your company’s stores and other facilities.

SafeSourcing can review your company’s historical data and provide a cost reduction and process improvement strategy that can be executed in most cases within 30 days.  We also see this strategy through the award of business. Typically reduction of cost for your company in this category is in excess of 20% 

SafeSourcing wants your company to complete successful eProcurement   events with us!  We have the category knowledge, vendors, tools and commitment to insure that your company’s eProcurement events are a success.  For more information on how we can help you with your waste removal procurement needs 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.

What is an RFI, RFP, or RFQ? Part III of VI

Friday, June 21st, 2013

Today’s post is by Heather Powell, Customer Services Manager at SafeSourcing Inc.

We will continue to look at those details; wrapping up tomorrow with a view of how to transition the information you get from an RFI to an RFP.

Schedules or Timelines: This is the time frame of the expectation of when the RFP is sent to the vendors, when questions (about the specifications or the RFP process) are due from the vendors, when the vendors can expect the questions with answers to be return, when the RFP is due to be complete.

Contract Type: This defines to the vendor if the contract is a spot buy, a one year, two year, or longer contract. There may be additional special contractual requirements added within this area. 

Data Requirements: This can vary from the type of RFP you many want to run, but every RFP should collect basic information about the vendors, their name, address, primary business, who the primary contact with their information, usually a list of 3-5 references, a list of current businesses that are similar in size to the company running the RFP.

Terms and Conditions: General and special arrangements, provisions, requirements, rules, specifications, and standards that form an integral part of an agreement or contract.

Description of Goods and/or Services to Be Procured:  This is to define what you are looking specifically to buy. It is a tie in between your scope of work and your specifications. This area is typically where you are going to ask the vendor to give their proposal of price based on your needs defined and within the guidelines of the specifications.

Instructions for preparation of technical, management, and/or cost proposals: These are the details on how to complete the RFP. If online through SafeSourcing, you will be given a deadline to complete the RFP, trained on how to enter your RFP and Pricing, and the additional information the customer may need as supplemental documentation and how to submit that information. In a sealed bid, you will be given specific instructions on what documents need to be signed and returned, what additional information needs to be submitted and the expectations on how to submit it, and specifically how to mail it into the government agency that will review it by a set date and time.

SafeSourcing can help you with your needs in creating, running, and reporting on a RFP for any item, project, or industry need. Tomorrow we will wrap up the series by looking at the path of information from the RFI to RFP and how to use that information to make the best decisions. For more information on how we can help you with your procurement needs 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.

Does your company buy name brand printer ink?

Friday, June 14th, 2013

Today’s post is from Sarah Kouse a project manager at SafeSourcing.

If you are buying name brand ink (HP, Epson, Canon, etc.) for your printer when you run out, you may be spending a significant more than if you were to purchase an “off-brand” or remanufactured printer ink.

Remanufactured printer ink looks the same, prints the same, and even has the same quality, but could potentially save your company a significant amount of money if you switched from the name brand ink, and if your spend is large enough it might event get your current supplier to lower your name brand product in order to keep your business. This of course depends which product they make the most margin on.

By way of a recent example, a black ink cartridge for an HP Officejet printer that goes for around $40, you could get a combo pack set of remanufactured ink, including all of the colors (Black, Cyan, Magenta, and Yellow) for around $30. That’s about $7.50 per cartridge and 25% below your current price. If you were buying just black ink, you could purchase 5 times the amount of remanufactured black ink for the price of one single name brand cartridge. Obviously the results may differ based on volume.

The savings generated by switching to remanufactured ink can be significant, especially based on the amount of printing most companies do.

If you’d like to learn how we can help your reduce your printing costs, contact a SafeSourcing Customer Service Representative.

We look forward to and appreciate your comments.

Taking a look at IT Field Services

Monday, June 3rd, 2013

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

There are a number of trends occurring in the support of IT products and processes today, not the least of which are the trends of increasing expansion of business through acquisition and the decreasing number of qualified resources with experience necessary to perform the tasks a company needs.  When you couple these two trends with the trend of employees having shorter and shorter stays working for a company, it is no wonder companies are looking to outsourced IT break fix and managed services to provide a backup to their existing staffs.

In today’s blog we will be looking at a few of the points to keep in mind as you explore this area of managed services for your company; looking at your current landscape, the questions you should be asking about where you want to head as an organization and the methods you can use to evaluate the vendors against your eventual goals.

Current Landscape – As with any project, understanding where you want to go starts with understanding where you came from and more importantly, where you are now.  With acquisitions and growth happening in so many industries it becomes a challenge to support new infrastructures and IT equipment that the existing staff may have no familiarity with.  This is especially true in the retail industry where new acquisitions can mean new Loss Prevention equipment, new scanners, new Point-of-sale equipment and software.  Geographic expansion can also create difficulties as recruiting and managing your own IT resources requires looking at areas the company may have less knowledge.  Outsourced field service companies can be a great addition to assist in bridging the gap of new equipment experience or geographical coverage on either a temporary or permanent basis.

Create the Project – How you know where your company is currently, the next step is to determine how the outsourced supplier will be used by your organization.  In the case of expansion this may be filling geographical needs that your current staff cannot support or it could mean providing a temporary knowledge bridge of unfamiliar equipment until your own staff can be brought up to speed or the equipment can be standardized to something more familiar.  Some of the things that will need to be determined with your organization are:
•   Pricing – Generally there will be a “per incident” or monthly flat fee offering.
•   Flow of support for issues from your employees to the supplier
•   The purpose of the managed provider – Staff augmentation (temporary or permanent) or special projects.
•   The services you will be expecting them to perform.

Evaluate the Suppliers –  Once you have determined your current needs and the plan for how best to fill them it is time to evaluate the suppliers who can help you.  Depending on the level of service you have details for; this may begin as a Request for Information, gathering general information about what each supplier can offer and who they are working with today as well as their preferred pricing model.  If the scope of service is well-determined moving right into a Request for Proposal would be the first step.  Locations, detailed service expectations and equipment count are all important pieces that would be needed for suppliers to provide you with accurate pricing.  Once this has been collected and a Statement of Work and pricing model have been established based on the RFP responses the final stage would be a Request for Quote or Tender, requiring all invited participants to provide pricing in the model you have requested. 

Outsourced Managed Services are becoming commonplace in how we do business and will continue to do business in the future especially for National companies how need services across a large portion or all of the country.  Maintaining your IT equipment is one of the fastest growing managed service industries and can be used affectively once your goals have been established for their use.  For more information on how we can help you evaluate suppliers against these goals 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.

There has never a better time to Source. Part II of II!

Wednesday, May 22nd, 2013

Today’s post is by Ron Southard, CEO at Safesourcing.

Once you have looked at the commodity markets to determine historical movement since you last sourced your category and the future outlook, the opportunity to drive your prices lower is also based on other factors such as the financial performance of the companies you may want to invite to participate including your incumbent supplier.

Using an example from EDAGR as we discussed yesterday for an unnamed supplier we have determined the following data. The unnamed supplier’s sales have risen consistently from 2010 through 2012. In particular, sales rose 19% from 2011 to 2012. Gross profit during the same period rose 44.8% and net income rose 90%. All of this is supported by an increase in unit sales of 26.6%. I know your next question, what does this mean?
1.   We’ve learned that even in the face of a slightly rising market which also has lower futures that your potential supplier was able to produce enviable numbers. Their Sales and Margins are both up so they have increased sales and reduced the cost (net income is up) of sales at the same time. This is a key indicator.

2.   As a result of the aforementioned numbers, it would indicate that they have room to move on price for selected customers if the new business is important to them or a net gain. Remember they still have to grow to please their shareholders. There is often margin set aside for winning new business and they are not the incumbent.

3.   Finding suppliers with these metrics of which there were several also suggests that your incumbent supplier may have to discount to a certain extent in order to keep your business. As such, an award here may help to avoid switching costs and make a slightly higher bid a better total deal, so do the math.

If you’d like to learn more about SafeSourcing spend analysis process please contact a SafeSourcing customer services representative.

We look forward to and appreciate your comments

Is your company culture an Ideal, or a reality?

Thursday, April 25th, 2013

Today?s post is from Michael Figueroa an Account Manager at SafeSourcing

Most human beings are averse to ideas that go against conventional wisdom. Yet, usually the most successful innovations come from ideas that of course, go against conventional wisdom. Alexander Graham Bell was told nobody would want to use and idiotic device like the telephone by the companies he pitched his ideas to. Arnold Schwarzenegger was told he was too big and had too thick an accent to get anywhere in the movie business. Andreas Pavel?s ideas for a portable music player were rejected 5 years before the Walkman when he was told nobody wanted to walk around in public with headphones on. We have a natural tendency to reject those ideas that exist outside of the status quo.

A 2011 study entitled ?The Bias Against Creativity: Why People Desire But Reject Creative Ideas? suggested that even those who have creative thinking as a goal are much more biased against creativity than they realize. The reason for this the study goes on to explain, is that all human beings have an innate bias toward ideas that represent uncertainty. At its core, a creative proposal is an idea that breaks the rules; social, procedural, or otherwise. So how else is your organization going to ever be able to fully capture productive creativity (innovation) without incorporating mechanisms that force innovations to go through a vetting process? Innovation might be your ideal, but without a plan, is it ever going to be your reality?

Many businesses claim to foster an ?environment of innovation?. But this environment is only going to be as much of a fertile ground for new ideas as its leadership?s own blind spots. Don?t think you have any blind spots? Well, that?s why they?re called blind spots? ;)? And without a mechanism or a process that forces leadership to engage uncomfortable ideas, the BUSINESSES innovations will forever be limited by the leadership?s PERSONAL patterns of thinking.

It?s been said that significant change within a business can only be accomplished by business guerilla tactics, by being willing to throw some informational grenades behind the enemy lines of workplace apathy before the culture will engage the forces of change it needs to face. These disruptions can be good for business if handled correctly, but expect some resistance. Without mechanisms in place to capture and squeeze the value out of new ideas, you can almost always expect them to go nowhere.

Some companies balk at the idea of using eNegotiation tools to meet their procurement needs. It?s different, it?s new, and it takes a little bit of study to understand. Forget that it?s also proven. But that?s why we love to engage new clients and suppliers, because we have the methods and track records in place to show why this unconventional idea also has above conventional results.

If you?d like help with your sourcing needs, please contact a Safesourcing customer services account manager.

We look forward to and appreciate your comments