Archive for the ‘E-procurement Solutions’ Category

« Older Entries
Newer Entries »

Do you think you understand the elements of an effective e-Procurement Program?

Friday, August 17th, 2012

Critical components for the buyer include but certainly are not limited to the following:

1.   A comprehensive database that is developed maintained and continually updated by the e-procurement service provider.
2.   Scope and accuracy of information that goes well beyond that of a simple on-line directory.
     a. Global and local sources of supply
     b. Detailed Vendor Information (capabilities, financials, history, safety  and environment information)
     c. Historical procurement details
     d. Industry Alerts
3.   A sophisticated software application program that provides extensive functionality:
     a. Allows for quick and easy access to information.
     b. Provides detailed information based on the buyer’s defined parameters  and queries, similar to that found in the opening pages of a comprehensive RFI.
     c. Allows for the easy retrieval of information that includes a substantial number of records.
     d. Classifies the results according to the parameters defined
     e. Communicates the information clearly in an uncluttered format
     f. Directs the application to carry out the required e-procurement action steps.
     g. Results in a summary presentation to the buyer that provides the best price scenarios that maintain the required level of quality and service.
4.   Software alone is insufficient. Those responsible for purchasing/spending need training, guidance and support.

The above definition is a part of a document that was developed by one of our customers after they had used our tools and experienced our services in order to define the process to their investors.

If you’d like to learn more about how you can use these tools to reduce costs and much more, please contact a SafeSourcing customer services representative.

We look forward to and appreciate your comments.

Posted in , ,

I’m tired of hearing the same old thing out of many CEO’s aren’t you?

Wednesday, August 1st, 2012

Does this sound like something you have heard before or in fact heard year after year? “XYZ Company announces the following personnel cuts due to the soft economy, increased competitive pressure or a decline in sales.”

This author has spoken to this subject a number of times. Earlier today I was speaking to a friend that sits one level away from his CEO. During the discussion he said, “I am so tired of hearing companies announce headcount reduction as their strategy for improving company results. What ever happened to creativity? A lot of times, the best ideas work their way up through an organization and result in a high level executive getting credit for a lower level individuals creative thinking. In fact, it happens all of the time. Headcount reduction creates a long term negative impact on companies as they lose these creative thinkers to a headcount reduction strategy. I sometimes think there must be an MBA course titled; “How to announce head count reduction as your strategy for tough economic times or poor results 101”.

The reality is if we want to put a creative procurement spin on this COGS or Cost of Goods Sold has not dropped dramatically if at all in any retail segment during the last ten years. It is the largest line item on any Retailers P&L including payroll and benefits which are expense items. There are also a number of expense items that are not included in COGS that could be addressed and have a resulting impact on results almost immediately beyond payroll reduction.

In three recent posts Bankruptcy Sucks Part I, Part II and Part III,  I discussed the financial impact of just assigning a reasonably small percentage of cost of goods to e-negotiation tools in order to compress pricing. And yes the fact is there may be switching related costs associated with this. What is more difficult, laying off 10% of your work force or switching suppliers?

Business is not same old same old. Successful enterprises require creative thinkers that evolve the business on an almost daily basis. If the first place you review during these economic times is your payroll or benefits costs as an opportunity to turn things around, there are better alternatives.

We look forward to and appreciate your comments.

Posted in

Are you paying to much for your Retail E-Procurement solution?

Wednesday, July 18th, 2012

When you review using retail e-procurement tools you may not always get what you pay for. In fact you are probably paying way too much.

There are too many companies that have been at this for a long time whose pricing formula is way too high in the retail marketplace based on what they provide.

I was speaking to a large retailer recently that had an unlimited use tool in place behind their fire wall from a very large player in the e-procurement space. The recently converted to this companies cloud based SaaS offering without a significant reduction in cost. I asked what type of savings they have been able to achieve and how many additional associates they had assigned to write RFI’s and RFP’s as well as handle events, supplier communication, hosting support, training, report generation, specification building, data collection etc. The answer was a lot.

After we had discussed at least 20 different categories, it occurred to the both of us that the savings from our cloud based SaaS events were at least a third higher than the savings from the use of the unlimited tool in either configuration.  Even if you added in our fees, the savings were still substantially higher on event by event basis with SafeSourcing. There are a number of reasons for this. One is that to many times when retailers deploy a solution internally or as a SaaS offering they default back to their old way of doing business with a new tool once the solutions provider has left. Obviously staff additions have to be calculated into the ongoing cost. Supplier research is limited, the number of participants is fewer, training is inadequate and the result is lower savings and sometimes overall quality. Older companies also do things in old ways. There are proprietary cost frameworks to the SafeSourcing solution that will also drive higher savings. I won’t share that information here.

Another way that retailers over pay, is when an older company comes in and matches the lower cost of doing business with a newer and better provider in order to win the business. An example of this is the cost of IT infrastructure in an open source world. As such the model will not last because many of these older companies are not structured in such a way that will allow them to absorb these lower fees profitably over time. Over time your price will continue to rise. In fact next year, your price should go down if you are running the same event again. Hasn’t most of the work already been done in the past?

Some good questions to ask your prospective solutions provider would be the following.

1. How many events per month can one associate host?
2. What are you doing to automate your solution in order to take out cost?
3. Will we pay the same in year two as we paid in year one for identical events?
4. What percentage of your associates work virtual?
5. Is your cost higher because of your investment in office space?
6. Is your cost higher because of your headcount required to run events?
7. What are your average savings for events over $100K?
8. What are your average savings for events under $100K?
9. Can you even run events under $100K?

There are certainly more questions but you get the idea. Be careful out there. If you want the lowest cost and the best service in the industry give SafeSourcing a call.

We look forward to and appreciate your comments.

Posted in , , ,

Are you running enough RFI’s? Are you running any?

Friday, June 15th, 2012

According to Wikipedia and others a Request for Information (RFI) is a standard business process whose purpose is to collect written information about the capabilities of various suppliers. Normally it follows a format that can be used for comparative purposes.

So a Request for Information (RFI) is primarily used to gather information to help companies make a decision on what steps to take next. RFI’s are therefore most often the first stage in the procurement process particularly with new sources of supply. They are used in combination with: Requests for Quote (RFQ), Requests for Tender (RFT), and Requests for Proposal (RFP). In addition to gathering basic information, an RFI is often used as a solicitation sent to a broad base of potential suppliers for the purpose of preparing a supplier’s thought process in preparing for a Request for Proposal (RFP), Request for Tender (RFT) in the government sector, or a Request for Proposal (RFP).

Much of the data required for an RFI is generally available and can be found on company websites, U.S. Security and Exchange Commission (SEC) filings for publicly traded companies in their Edgar system, industry guides from companies like Trade Dimensions, or from sources like Dun and Bradstreet.

The challenge for most companies is that they do not have the necessary resources to complete this research. Therefore providers of supplier data should be able to make this data available in templates that companies can begin with. Simple data should always be available in any database as to Company Name, Annual Sales, Product category expertise, contact information, e-procurement experience and product specifications. This data should be easily exportable to a variety of formats such as MSFT Excel.

A simple request of your e-procurement supplier should get you well on your way to completed RFI’s that lead to quality RFP’s and RFQ’s without spending a lot of your valuable time on basic research. If they do not, we’d be glad to hear from you.

If you’d like to learn more, please contact a SafeSourcing customer services associate.

We look forward to and appreciate  your comments.

Posted in ,

Using Procurement Services for Expense Reduction!

Friday, May 4th, 2012

Procurement services should always be in high demand because of the immediate delivery of expense reductions  impact which can go directly to an organizations bottom line.  Our procurement services have a proven track record of driving for resale and expense costs down substantially for companies that range in size from $5M to $25B. 

What can be accomplished with eProcurement Services?

• Lower prices, deeper discounts, consolidated spends through e- negotiation
• In most cases means working with current suppliers
• Provides increased efficiencies and improvements in your procurement process
• Continued  management support for of your procurement initiatives

In many cases, companies are more focused on generating revenue growth and are missing out on the opportunity to drive higher profits by addressing their indirect costs with expense reduction as a primary strategy.

A procurement services strategy that focuses on expense reduction does not have to include cutting employee costs as a driver. Some focus areas should be expense related to contracts, equipment, office supplies, utilities, printing, services of all types and many other indirect costs.

A proper procurement services strategy focused on expense reduction can propel a business to the next level of profitability.  To learn more please contact a SafeSourcing Customer Service Representative. 

We look forward to and appreciate your comments.

Posted in , ,

Calculating your savings! Finding hidden gems!

Thursday, May 3rd, 2012

To realize savings you need to consider more than the dollars and cents of it!  Although the dollar amount you’re being charged for a good or service is certainly important and through competitive bidding you can drive great savings on the price alone, some of your savings may be better analyzed through your current contract or pricing agreement.

Often value added offerings are outlined in your current contract.  These value added offerings could be in many forms including, but not limited to, a rebate program, free shipping, no minimum purchase required, and discounts for purchase levels.  The opportunities for savings with these offerings may have greater potential than price alone. 

When looking to source any of your products or services these value added offerings can be included within the bidding event’s Terms and Conditions document and in some cases as specific line items within the eRFQ framework.  In other words, if you and your sourcing partner can identify all the aspects that you consider to bring value for your organization it can be included in the expectations for any vendor offering bids on your items.  This would allow you the confidence and comfort that the bids you compare through an eProcurement event are a true comparison with no hidden savings or potential for savings erosion!

For more information on how to source any expense related category, contact SafeSourcing to learn how we can assist you; please contact a Customer Service Representative for more information.

We look forward to and appreciate your comments.

Posted in ,

An effective procurement strategy can be a key to supply chain risk mitigation!

Wednesday, May 2nd, 2012

Supply chain risk management is the process of identifying factors that could disrupt the production process.  Because conducting business is such a complex activity, the sources of such disruption are going to be many and varied; but because they cost the people who run and work for the business so much time and money, these people will naturally want to have some way to minimize the amount of risk— though of course they will never be able to eliminate it altogether.  And one of the most effective means of supply chain risk management is establishing a sound, effective procurement strategy— procurement being defined as the acquisition of goods and services, in both the proper quantity and the proper quality, when they are needed, where they are needed, and usually by means of a contract.

There is a company that devotes itself to helping other business owners to determine which procurement strategy will work best for them.  Our company, SafeSourcing, has developed a proprietary six step process for e-procurement, which is enhanced through the use of multiple tool sets. The SafeSourceIt Database, which has 427,000 suppliers and uses a set of over thirty safety certifications (which continues to grow) to screen out any suppliers that don’t meet your quality criteria, and a highly innovative e-negotiation  (Reverse Auction) tool, in which buyer and seller exchange roles and the seller attempts to underbid the competition within a certain period of time.  Those who wish to join may also learn more about procurement strategy by going onto the SafeSourcing procurement professional’s network, Sourcebook.

For more information, please contact a SafeSourcing Customer Service Representative.

We look forward to your comments

Posted in ,

Who is responsible for educating our supply chain associates?

Friday, April 13th, 2012

So it’s up to you; would you like it to be your fault or a reflection of your well planned educational planning.

Someone told a long time ago that you don’t learn in college, you learn how to learn. I’m not sure I completely agree with that statement, but understand the sentiment. There are any numbers of statistics out there that support the fact that retention drops immediately upon completing a learning experience. Many have been conducted on the amount of learning that erodes for students over the summer or how much they remember from an actual class as soon as the leave the learning experience. The learning experience could be a particular class, program, major or minor area of study. The fact is much like muscle, if you don’t use it you lose it.

So, who is responsible when someone comes to your company to insure that their employment is a continual learning experience? The answer is YOU and that includes the entire management team. First and foremost the company needs to have an education plan in place, and that is not just on the job training or the next MSFT class. Each department has to have a supporting plan in place that relates specifically to the mission of their individual department or area of expertise such as procurement.

Part of our strategy prior to launching SafeSourcing beyond just offering world class e-procurement tools was to offer an educational site for procurement professions that included a blog, a wiki and a professional social community where they could share their experience. We actually have our associates use these tools. We never source a category for a company that we do not conduct team research on first. That is even if we have an internal subject matter expert. We then hold associates accountable to providing an internal white paper relative to the subject. All associates are also accountable to producing one blog monthly relative to the supply chain. From these learning activities associate are also required to provide original content for our sourcing wiki and propose threaded conversations within our Sourcebook. Bottom line, if you live it, you learn it.

We all come from diverse educational and experiential backgrounds. That does not mean that we can not find and experience passion within a new area of expertise such as procurement. The thing is, most associates will not do it by themselves.

If you want good results, create an educational plan for your associates that foster a passionate learning environment within the daily practice of their job.

We look forward to and appreciate your comments.

Posted in , ,

Getting Started!

Friday, March 30th, 2012

Today?s post is by David Wenig; Manager ? Customer Services at SafeSourcing.

Whether the person in question is a young boy facing a daunting chore such as cleaning his room or a seasoned professional tasked with new project, the question is the same. So, where should you start?

For anyone tasked with the implementation of a new eProcurement process or project, I would offer that need not reinvent the wheel. Instead, use your partner as your guide during these early stages and throughout your entire partnership. You have selected them for various reasons including their experience, so work to leverage that experience for your own benefit to launch your process or project.

As with any daunting task, the best place to start is creating a plan. The boy in his room may decide to clean his toy cars before his blocks. (Of course, this depends on how much space is available under the bed.) Likewise, a procurement leader ought to set out a similar plan as well.

During this planning phase, look to your eProcurement partner for specific examples, templates and suggestions in this early planning phase. Their past experiences sourcing specific categories will undoubtedly give you guidance and insight that you will adopt for your own purposes. You will soon find yourself far beyond the feeling of ?where do I start?? The next question you will ask is ?why didn?t I start sooner??

We look forward to and appreciate your comments.

Posted in ,

You know what they say about excuses.

Thursday, February 9th, 2012

The reason is because middle market retailers are still not using low cost e-procurement tools such as reverse auctions.

There are two primary sources of objections that continue to halt the use of these profit enhancing tools in the middle markets.

The first source is your own buyers or category managers. For some, it is the false belief that these tools 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 they have always worked with.  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 can provide automatic alerts results in literally thousands of contracts auto renewing annually at predetermined price increases. This results in huge cost increases to retailers that were 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 an RFP or an RFQ (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 be well aware of or even using these technologies to reduce their own costs, middle tier retailers have not been able to share in these savings to the extent they deserve to.

If middle market senior executives were to lead the charge and  e-procurement costs as ell as the availability of new sources of supply were no longer an issue, there is absolutely no reason middle market retailers should not benefit greatly from running  e-procurement events such as reverse auctions.

Contact SafeSourcing if you’d like to impact this quarters earnings.

We look forward to and appreciate your comments.

Ron Southard – CEO SafeSourcing

Posted in , ,

« Older Entries
Newer Entries »
© 2025 SafeSourcing