Archive for the ‘E-procurement Solutions’ Category

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Procurement deserves more attention from the executive suite now!

Wednesday, June 15th, 2011

Procurement when looked at properly has the largest single impact on a company’s financial performance. In fact more than any other area of the company. The fact is that when additional sources of supply compete for a company’s business, it results in compressed pricing that drops directly to the bottom line and also often delivers better quality products or materials. Coupled with the prevention of possible disruptions in a company’s regular source of supply – like the situation businesses have experienced during the last several years, e-procurement tools offers many advantages that can not continue to be overlooked. Companies that are more profitable grow and companies that grow generate jobs.

The benefits to be realized in using e-procurement tools beyond savings include faster time to purchasing decisions and more effective supplier management. Today’s easy to use tools are a result of technology advancements, enhanced data mining techniques and data management best practices  driving significant improvements in the e-procurement process.

In today’s tight business environment, lowering costs through the use of e-procurement tools are proving to be a valuable aid to ensuring profitable operation.

If you are not using them, you should be. If you are reducing staff in your procurement area you should not be.

We look forward to and appreciate your comments.

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As Services Expand So Do Sourcing Needs

Monday, June 6th, 2011

In today’s increasingly competitive landscape, retailers are getting more and more creative with the types of services they are offering their clients to get them into the stores.  Dine-in space that offers music, internet access or scheduled events such as wine-tasting are becoming more popular every year as retailers compete for the customer’s time, attention and money.

With so many of these services being implemented quickly and by the individual stores, at least initially, the opportunity to consolidate and organize the entire spend for the company presents a very big and potentially profitable opportunity.

One growing service retailers are offering is in-store internet access.  Customer internet is a service that can easily be sourced for the entire company either through one national vendor, or a handful of regional vendors.  Leveraging the purchasing power of all of the company’s locations for internet services can be a highly successful process as there are so many more providers today than there were even 5 years ago.

The music played in these new areas is also another service that can be sourced as there are many suppliers that can either supply music that can be played and sold at the point of purchase creating yet another new revenue stream or that provide internet streamed music complete with customized marketing messaging in between songs. 

Another way for retailers to successfully reduce their spends by purchasing for the whole company is with the supplies being used for their coffee or dining services.  In many cases these new areas are not treated as their own profit centers and the materials needed to run them are purchased on a store by store, as needed basis.  Napkins, utensils, cups, condiments as well as all of the ingredients that go into the finished product are examples of items that could be taken to the vendor community for more competitive pricing.

So many of these new ideas for bringing customers are highly affective and are difference makers for someone shopping at one location over another and by bringing the services and products they offer under solid sourcing practices they can also be highly profitable new channels of revenue for the company.

For more information on SafeSourcing and how we can assist your company with sourcing these goods and services, please contact a Customer Service Representative for more information.

We look forward to and appreciate your comments.

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Why should procurement professionals use on demand software (SaaS) for their e-procurement needs?

Thursday, May 19th, 2011

On demand software or SaaS (Software as a Service) by its nature is an internet based application and as such is accessible from wherever you happen to be as long as you have a network connection. With today’s broad band offerings that literally means anywhere. So the first rule of thumb is that it provides easy access. In addition, since most of the newest versions of SaaS applications are native web based applications, they integrate very nicely with most office infrastructures. With Microsoft being the most deployed environment, data is easily exported or imported to formats that comply with their standards. In many cases these tools can also be made 100% available to you within days of contract signature

Most of us have horror stories about when our PC, Network, Application etc. went down and we were not able to complete tasks at work. When we call our internal service department, the response is normally less than what we would like or hurry up and wait. With a hosted software application, it is the responsibility of the SaaS provider to maintain the application. They know up front that if they don’t do a superior job of support and availability, that you the customer can go somewhere else to find a provider that will. This is not the case with internally installed corporate applications.

Your data at a SaaS provider is also often more secured than the data at your corporate office. Since this is the core business of a SaaS provider, the architecture of the application normally has multiple levels of redundancy, failover recovery and is backed up regularly.

Typically, SaaS applications are easier to change than traditionally installed corporate applications. There are not as many feature upgrade charges with every point release in a SaaS environment because the provider needs to provide these features to continue to attract new customers and to keep up with the pace of the industry.

Finally, the total cost of ownership is much quicker in a SaaS environment than traditional application software installations. In fact there are many stories ROI’s with your first series of e-procurement events exceeding an entire year’s investment by greater than 10X.

We look forward to and appreciate your comments

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What’s up? Is it possible to save money on anything in this market?

Wednesday, May 18th, 2011

If you had the tools to check all of the market indices, they are all up or headed up. Fuel, pulp, resin, metals, beef, grain and the list goes on. Many are up double digits over the last year and headed higher still. As such, your suppliers will be increasing their prices to you.

It is in this environment that procurement professionals are being asked to take cost out of the business or at a minimum hold costs flat. The question is how?

To begin with, even in up markets there remains significant opportunity for cost reduction and other savings. This does not apply to every category or to every product within a category, but there are opportunities.

Here are some things for procurement professionals to consider as they embark on this journey. All of these can provide clues that will help you map your way through today’s markets.

1) Review the last time all products or services were sourced in detail?
2) Review the dates on all current contracts?
3) Are there additional suppliers that are interested in your business?
4) Review all Terms and Conditions to uncover hidden opportunities.
5) Have your volumes increased or will they?
6) Will a longer term increase discounts?
7) Leverage freight and shipping terms? 
8) Use indices and escalator language to control price increases.
9) Understand what drives the pricing of the product or service you are buying.
10) Aggregate your volumes with other companies.
11) Reach out to procurement providers that have the expertise to help you.

If you can’t come up with at least another 10 items to add to this list of more than 3 of the items above did not occur to you, it’s time to reach out for some help.

The reality is that prices are always going to go up over the long term. The other reality is that there are companies that are still saving or holding costs. The reason is because they plan better than most and ask for help when they need it.

We look forward to and appreciate your comments.

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So what are the benefits of SaaS? It sounds Sassy which means rude and disrespectful.

Friday, May 13th, 2011

If you have an e-procurement solution installed behind your firewall on your own servers, this might be the 1st place you want to begin saving money by replacing it with a SaaS based solution.

On demand SaaS (Software as a Service) by its nature is an internet based application and as such is accessible from wherever you happen to be as long as you have a network connection. With today’s broadband offerings, it literally means any where. In addition, since most of the newest versions of SaaS applications are native web based applications, they integrate very nicely with most business infrastructures.

The e-procurement buyer’s data at a SaaS provider is often more secured than the data at many business offices. Since this is the core business of a SaaS provider, the architecture of the application normally has multiple levels of redundancy, failover recovery and routine data backups. SaaS applications are, by-design, easier to update than locally installed applications and buyers usually experience lower feature upgrade charges as well.

The return on investment (ROI) breakeven point for an e-procurement solution is usually reached more quickly in a SaaS environment than a locally installed solution – often much more quickly. In fact there are many instances of breakeven ROI’s occurring with the first series of e-procurement events.

Stop wasting money and call a SaaS provider and while you are speaking with them ask if their offering is cloud based. More on that later.

We look forward to and appreciate your comments

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Where should your RFI data come from?

Tuesday, April 26th, 2011

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.

We look forward to and appreciate your comments

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Why procurement and supply chain professionals need e-procurement tools more than ever.

Thursday, April 14th, 2011

Procurement and other supply chain professionals have developed and nurtured existing relationships within their incumbent suppliers for years and in some cases decades. Too often, this has led to incumbent suppliers becoming to comfortable. The feeling of entitlement begins to creep in and some suppliers feel as though their business will be renewed annually. Too often this is true.

This author has often said that the job of buyers, category managers, procurement executives and other supply chain knowledge workers is the most difficult job in all of retail and retail distribution. These professionals are literally swamped. Quality, safety, environmental issues coupled with the enormous amount of new product offerings is overwhelming. Just conducting the basic research required to identify potential new sources of supply, finding the correct contact information as well as determining if the company has the capability to meet your needs. All of this is before you even sample, price or test new offerings. No wonder it is so easy to just stay the current course. This however would be a mistake.

A general rule of thumb that this author has always ascribed to is if you are doing business with a current supplier for more than three years and are only negotiating with that supplier, your prices are probably too high. The question is how can you find out?

That is where e-procurement tools come in to play. I won’t advertise here, but if you were to Google e-procurement or reverse auctions etc. any number of companies will come up. Or if you were smart, you just click this link and have measurable savings in less than 30 days and often faster. Visit SafeSourcing.

We look forward to and appreciate your comments.

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The importance of RFx in the Procurement Process – Part II of II

Tuesday, April 12th, 2011

This is a continuation of my last post where we began to discuss the importance of running a Request for Proposal/Information before a competitive pricing event is run.  The last post talked about being specific in the information requested and not being afraid to run an RFx on an existing spend.  Here are some additional details to keep in mind.

• More than a template.  To obtain truly great RFx results the process should involve more than a template off the internet.  Having a team that knows how to properly run an RFx will ensure the right formatting is used; answers will be collected quickly; full results analysis will be conducted; as well as an assurance that the right companies are invited to the process to provide a mix of leaders; innovators and up-and-comers.

• If you use an online tool, go beyond the basic survey providers.  Providers that give access for creating free or inexpensive surveys are good for basic questionnaires but often lack the flexibility and post-survey analysis that a company used to handling RFP/RFI responses can provide.

• Remove the bias.  If at all possible try to find an independent company that can handle the entire RFx process all the way through to the final results and analysis, ensuring your results will show the best company with no bias.

• Integrate with the Reverse Auction.  Having an RFx process tightly integrated with the initial quote gathering and final competitive pricing event means that your company as well as all of the suppliers can get comfortable with one system for everything and not have to go from one tool to another to deliver the information you need.

For more information about the SafeSourcing RFx tools and professional services, please contact a Customer Service Representative today.

We look forward to and appreciate your comments.

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Standard e-procurement objections.

Wednesday, March 30th, 2011

Most of the time when we present our solutions, the majority of objections come from buyers and category managers. This author has long held that this is not the correct audience for a first presentation to a company of any size. The correct audience is the CEO or CFO, or both. Procurement when looked at properly has the largest single impact on a company’s financial performance of any area of the company. CEO’s and CFO’s primary areas of focus are the financial performance of the company.

Here are the bullets I normally speak to at the beginning of a presentation as to what leaders will here from their teams relative to the use of these tools. All have very detailed rebuttals that cover the gamut of the procure to pay life cycle.

1. We already get the best cost
2. We’ve done business with this supplier for years
3. We don’t have product specifications
4. We don’t have time for this
5. Our switching costs will be to high
6. We can’t insure the same quality
7. We need to adhere to certain standards
    
Here are a couple of hints as to how to nip these objections in the bud. Get the CEO and CFO     involved early, and keep them involved throughout the process. If savings and cost avoidance are delivered as promised, you won’t have any problem keep their interest.

We look forward to and appreciate your interest.

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Part II. A significant storm hit retail procurement years ago?

Thursday, March 17th, 2011

As we discussed in yesterdays post, from a procurement perspective we have had a nor’easter circling for years. Companies have gone out of business that did not need to. So what can you do now that we are in the storm? Where is your information source?

There are a variety of ports to play on a word (portals), search engines and website home pages that may or may not contain what you are looking for in order to mitigate your risk to stormy conditions. The question you should be asking; is there one location that contains all or most of what I need and does not cost a nickel to access. If there were, it would need to include the following.

1. A central repository and launch point for industry alerts
2. A central source for procurement information
3. A central collaboration point for all procurement professionals to hold open forum conversations.
4. A central location where one can find specifications on thousands of products.
5. A central database of new global and local sources of supply
6. A central location that tracks suppliers environmental practices
7. A central location that tracks suppliers product safety practices
8. A daily educational commentary that can be reviewed and shared with others in the procurement space for mutual discussion and review.
9. A central location for your team to hold private forum conversations and share private documents.
10. A central location where companies can trace beyond one forward and one back if necessary after they have bought products or services.

During stormy times, the best offense is a good defense. When a storm approaches having the right tools to insulate you from the storm surge are critical. There is only one tool in the procurement space that can answer yes to providing all 10 points listed above.

SafeSourcing. If you don’t believe us ask our customers 

We look forward to and appreciate your comments.

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