Today’s post is from our blog library archive  at  SafeSourcing.

The landscape of procurement is constantly changing and no time more so than in today’s world with company acquiring company, experience and education changes taking place and a workforce that is always in flux as a major generation of employees begins to exit the industry.  With all of these changes it is no wonder that new processes and 3rd party relationships need to develop to accommodate the new landscape.  With each new process and/or partner relationship introduced, laying out the expectations and roles and responsibilities will be crucial to achieving success.  Today we will be looking at some of the things which need to be done before moving forward with the pilot event of a changed procurement department.

Communication – Communication is the foundation for all successful projects and understanding the pieces that are included here and whose responsibility it will be to own is very important.  There are three aspects that need to be determined once a new process begins.  The first piece is communication with internal stakeholders.  Generally this will be handled by the procurement team but must needs to happen before anything else is completed.  Catching your internal stakeholders off guard for a new project that affects their areas is the fastest way to derail a project.  The second piece is external communication with the incumbent suppliers.  The second fastest way to derail a project is to catch your suppliers off guard in a category they are currently supporting.  Advance notice, informing your suppliers what is happening will help ensure they are ready to fight to keep the business they have.  These first two areas are considered “notification” communication and the third would be classified as “status up
date” communication.  This is where the future touch point communication with the suppliers and stakeholders are set so that everyone can be kept up to date with the project.  The more information that can be shared with all interested parties the smoother the project will go. 

Timeline and Milestones – Happening in parallel with the notification communication is the establishment of the milestones that will occur not only for projects in general but specifically for each project on its own.  Each piece of the process should be defined from the time a project is decided through the final contract with the awarded vendor.  These milestones should be well-defined and tentative dates should be attached to each one.  These dates should be connected in a way through a program like Microsoft Project so that the outcome of milestone slippage can be seen immediately by the project team.  This provides prospective for the entire project and also a forum to track the pieces as they occur to keep everything on track.

Roles and Responsibilities – Once the project has been defined the ownership of each piece must be clearly communicated to each affected party.  Officially assigning roles ensures that there is a minimal chance of items falling through the cracks and not getting completed.  Having a well-established template of roles and responsibilities is key but keep in mind that each sourcing project is unique and some departments may have less resources than others to handle all of the items needed.  Milestones like providing spend details are usually owned by the stakeholders but sometimes may get handled by an internal or 3rd party procurement team.  The important thing with roles and responsibilities as that you have a framework but stay flexible with each project.

New procurement processes can lead to great results as long as they are defined and communicated in advance so that everyone knows the part they play.  For more information on how SafeSourcing can assist with structuring standard operating procedures for these projects 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 Ronald D. Southard, CEO at SafeSourcing Inc.

Please read yesterdays post first.This is part two from yesterdays blog post that end with the following statement. Expect pushback from two sources.

The first source is your own buyers or category managers. For some, it is the false belief that these tolls will eliminate their jobs. For others, it is the thought that in rising markets, buyers tend to be conservative in the hopes that their suppliers will continue to honor old contracts and delay price increases. Neither assumption is true. E-procurement tools make a buyer?s job easier as they can do more in less time such as working with dozens of suppliers versus only the same few. Honoring old contracts almost never happens. Ever-greening of contracts is a huge problem in retail where the lack of sophisticated contract management systems that provide automatic alerts results in hundreds of contracts auto renewing at predetermined price increases resulting in huge cost increases to retailers. That was not planned for. This is all the more reason to be thinking about your spend months before contracts expire even if it only results in cost avoidance.

The second area where you can expect pushback is from your incumbent suppliers or wholesale distributors. If you have never participated in the setup of a reverse auction and most middle market retailers have not, that initial call to your suppliers to ask them to participate in a reverse auction event is always an interesting journey. Be prepared for all of the reasons in the world why you should not waste your time on this type of process. The more forceful the pushback the more likely you are to see savings that you should have seen earlier. As such, although suppliers may b well aware of or even using this technology to reduce their costs, middle tier retailers were not able to share in these savings to the extent they should.

If middle market senior executives lead the charge and cost and the availability of new sources of supply is no longer an issue, there is no reason middle market retailers should not benefit greatly from running reverse auctions.

Please contact a SafeSourcing Customer Services Account Manager in order to begin your successful approach to eProcurement today.

I look forward to your comments.

Todays post is by Ronald D. Southard, CEO at SafeSourcing Inc.

Please read yesterdays post first.This is part two from yesterdays blog post that end with the following statement. Expect pushback from two sources.

The first source is your own buyers or category managers. For some, it is the false belief that these tolls will eliminate their jobs. For others, it is the thought that in rising markets, buyers tend to be conservative in the hopes that their suppliers will continue to honor old contracts and delay price increases. Neither assumption is true. E-procurement tools make a buyer’s job easier as they can do more in less time such as working with dozens of suppliers versus only the same few. Honoring old contracts almost never happens. Ever-greening of contracts is a huge problem in retail where the lack of sophisticated contract management systems that provide automatic alerts results in hundreds of contracts auto renewing at predetermined price increases resulting in huge cost increases to retailers. That was not planned for. This is all the more reason to be thinking about your spend months before contracts expire even if it only results in cost avoidance.

The second area where you can expect pushback is from your incumbent suppliers or wholesale distributors. If you have never participated in the setup of a reverse auction and most middle market retailers have not, that initial call to your suppliers to ask them to participate in a reverse auction event is always an interesting journey. Be prepared for all of the reasons in the world why you should not waste your time on this type of process. The more forceful the pushback the more likely you are to see savings that you should have seen earlier. As such, although suppliers may b well aware of or even using this technology to reduce their costs, middle tier retailers were not able to share in these savings to the extent they should.

If middle market senior executives lead the charge and cost and the availability of new sources of supply is no longer an issue, there is no reason middle market retailers should not benefit greatly from running reverse auctions.

Please contact a SafeSourcing Customer Services Account Manager in order to begin your successful approach to eProcurement today.

I look forward to your comments.

Todays post is by Ronald D. Southard, CEO at SafeSourcing Inc.

This is part one of a two part blog. Part two will be published on Monday. For the purpose of this blog, we?ll call middle market retailers, those with sales of less than $2B annually.

Much the same as larger retailers, in the middle market prices are up and consumers are spending less. The impact to retailers in the middle market however may be far worse. So, what have been the roadblocks to middle market retailers using e-procurement tools to help fight competition from national and international chains as well as to insulate their earnings? Why in the world aren?t middle market retailers already running reverse auctions or using other e-procurement tools?

Let?s answer the last question first. Most of the major providers of e-sourcing or e-procurement solutions, particularly reveres auctions have either neglected or avoided the retail middle market. The primary reason for exclusion was that historically these solutions were not hosted and providers generally assumed that companies of this size would not have the infrastructure to support on site installations. As solutions evolved into hosted, on demand and Software as a Service implementations, the major providers could not or would not develop pricing strategies that were attractive to middle market retailers. For the middle market the major players partnered with third parties to deliver the solutions, which juts like the supply chain, the more players involved the more expensive the solution and as a result limited use.

Today there are newer lower cost solutions available to middle market retailers that will let them enjoy the benefits that larger companies have enjoyed for years. But, and it?s a big but. Expect pushback from two sources.

Please join us?on Monday?to find out where this pushback comes from. If you can’t wait, please contact a SafeSourcing Customer Services Account Manager today.

I look forward to your comments

Todays post is by Ronald D. Southard, CEO at SafeSourcing Inc.

This is part one of a two part blog. Part two will be published on Monday. For the purpose of this blog, we’ll call middle market retailers, those with sales of less than $2B annually.

Much the same as larger retailers, in the middle market prices are up and consumers are spending less. The impact to retailers in the middle market however may be far worse. So, what have been the roadblocks to middle market retailers using e-procurement tools to help fight competition from national and international chains as well as to insulate their earnings? Why in the world aren’t middle market retailers already running reverse auctions or using other e-procurement tools?

Let’s answer the last question first. Most of the major providers of e-sourcing or e-procurement solutions, particularly reveres auctions have either neglected or avoided the retail middle market. The primary reason for exclusion was that historically these solutions were not hosted and providers generally assumed that companies of this size would not have the infrastructure to support on site installations. As solutions evolved into hosted, on demand and Software as a Service implementations, the major providers could not or would not develop pricing strategies that were attractive to middle market retailers. For the middle market the major players partnered with third parties to deliver the solutions, which juts like the supply chain, the more players involved the more expensive the solution and as a result limited use.

Today there are newer lower cost solutions available to middle market retailers that will let them enjoy the benefits that larger companies have enjoyed for years. But, and it’s a big but. Expect pushback from two sources.

Please join us on Monday to find out where this pushback comes from. If you can’t wait, please contact a SafeSourcing Customer Services Account Manager today.

I look forward to your comments