Archive for the ‘E-procurement Solutions’ Category

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Here are Eight (8) good reasons why Super Market Company?s should be doing more with e-procurement tools or getting new ones.

Monday, October 11th, 2010

Let?s not event talk about the economy which should automatically make companies look at their procurement practices. Let?s not talk about adjustments or explanations as to final industry numbers like the food at home inflation rates. If you are a new CEO or for that matter if you still have your job, you should be looking at 2 things aggressively. The first is cost of goods and services and the 2nd is expenses.

Here are eight good reasons why.

1.?Fiscal Year 2000/2001? ????? Net Profit Percentage??? 1.25
2.?Fiscal Year 2001/2002 ?????? Net Profit Percentage ?? 1.36
3.?Fiscal Year 2002/2003 ????? Net Profit Percentage?????? .95???
4.?Fiscal Year 2003/2004 ????? Net Profit Percentage?????? .88
5.?Fiscal Year 2004/2005 ????? Net Profit Percentage???? 1.16
6.?Fiscal Year 2005/2006 ????? Net Profit Percentage ??? 1.46
7.?Fiscal Year 2006/2007 ???? Net Profit Percentage ??? 1.91
8.?Fiscal Year 2007/2008 ???? Net Profit Percentage ??? 1.84

SafeSourcing can help you fix this problem in the present quarter. Click here for the SafeSourcing Risk Free Trial.

We look forward to and appreciate your comments.

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Didn’t the last earnings season just end? Here are twenty reasons why all retailers should use e-negotiation tools beginning immediately.

Monday, September 27th, 2010

One way to hire is to stop worrying about others and focus on you. If your business model is tight survival is more up to you than it is external forces. To that end there is a lot that e-procurement tools in the form of the e-RFX process can do to help you in the upcoming fourth quarter.

Below is a list of twenty benefits retailers can gain by using these tools particularly those that are offered in the form of Software as a Service. If you don’t believe they will help you in this quarter, what better time to start than 90 days prior to the New Year.

This list is not in any particular order.
1. Guaranteed to improve net earnings immediately
2. Guaranteed to improve safety immediately
3. Guaranteed to improve Corporate Social Responsibility.
4. Guaranteed to produce new sources of supply
5. Retail has less spend assigned than any other industry
6. Streamlines the procurement process for the better
7. Will hold suppliers accountable to your standards.
8. Will improves quality
9. Will provide cost avoidance in a volatile market such as pulp.
10. Will create a competitive environment
11. Will drives reliable market pricing
12. Will maintain a reliable history for future comparison
13. Will educate your suppliers as to how retailers wish to procure products
14. Supplier training eliminates questions
15. Will improve your product specifications
16. Will improve negotiations.
17. Will improve your carbon footprint
18. Will provide a simple award of business process
19. Will free up your peoples time for other tasks
20. Works for procurement of all product categories

This author is not sure why a derivative of this list could not become the mission statement for any procurement department.

As always, we  look forward to  and appreciate your comments.

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Retail buying organizations are you prepared to survive an audit?

Friday, September 24th, 2010

Although the audit process can be a good thing because it holds companies and individuals accountable, to often they are a result of something that is already broken and we are looking for a reason as to why. Or, someone to blame.

Audits can generally be broken down into the three classes that follow.

1. Significant Risk – This is non compliance that generally results in a major financial loss to the company
2. Moderate Risk – This is non compliance that generally results in a negative impact to the company
3. Minor Risk – This is a non compliant act that generally  results in a negative impact to an existing process within a company

From a procurement perspective this can include all items required during the bid and award process. Such as .

1. Purchase Orders tied to contract quotes
1. Delivery T&C’s
2. Definition of contract terms
4. Bidding process used
5. Vendor notification of award
6. Corporate standards adherence
7. Signature authority
8. Termination Clauses
9. Training adherence

The above list is potentially endless. The point is if you are buying products or services for your company, you need to be able to withstand a vigorous internal audit so that your auditors can withstand a vigorous external audit.

Is your procurement team prepared?

We look forward to and appreciate your comments.

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If you want to improve your profitability maybe it’s time to look at a private label program.

Thursday, September 23rd, 2010

According to Wikipedia Private Label goods and services are available in a wide range of industries from food to cosmetics.

Historically these products or store brands were positioned as low cost alternatives to major national and international brands. Today if you read the labeling many of the products are virtually identical and in some cases companies are positioning their brands as better or premium to the large brands.

A great source if education is The Private Label Manufacturer’s Association or PLMA. Their website is www.plma.com. PLMA sponsors an annual show which this year is being held in Chicago the 14th-16th of November. This show is full of great workshops as well as manufacturers that would be glad to compete for you business.

According to GfK Roper, 57% of all shoppers now say that they purchase store brands which represents a 21% increase from ten years ago and an impressive 38% growth rate.

E-procurement tools typically assigned to the e-RFX suite are an ideal way to source these products and will help to drive your costs even lower. Start with an RFI to select the companies or manufacturers you are interested in partnering with and then invite the best few to bid for your business.

We look forward to and appreciate your comments.

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Join the argument. Strategic Sourcing alive or dead? Part II of II.

Monday, September 20th, 2010

In Part I of this blog we posited that in order for a strategic plan to be successful there are certain elements organizations need to know. I?ll just list a few as an example.

1.?Your own company.
2.?Your Industry. Example: Retail.
3.?Your vertical within your industry.
4.?Your competition. Be careful.
5.?Your category.
6.?Your product.

So let?s assume that you have an e-procurement supplier that indicates they have great strategic sourcing tools that can evaluate your data and help you strategically build your sourcing plan which as a result would support your company strategic plan.

Let?s assume a tier two supermarket chain wanted to evaluate their total grocery category. Let?s just look at bottled water which is a sub category of the total grocery category. The first requirement is that they provide access to their sales and cost data. This may be easier said than done in the lower tier one and tier two markets. What is also required here is access to industry data. Data may indicate that their bottled water sales are 2.5% of their total grocery category, but what is the industry standard for this category? Are they already above the average?? Has their category grown year over year? Have industry category sales?? If they have access to both sets of data they have a start but who is their competition?? Are they comparing themselves to other supermarkets and should they be?? What about C-Stores, Drug-Stores, Liquor Stores and Mass Merchants that are close to their stores and get a share of category sales. Are they aware of these competitors category mix such as number of brands offered or private label offerings? All of this information is required for every category in the total grocery category. If they don?t conduct this analysis how would they begin to know what category to address first? The obvious choice is the category that is most out of norm with the industry average. But will sourcing that category have the best impact on the P&L and earnings.

Once this analysis has been completed, their e-procurement solutions provider should also have data that can guide them as to what month is the best month to source specific categories and what commodity markets are doing currently that may also have an impact on finished products.

After all of this is completed and categories are evaluated, ranked and prioritized they should then look for other elements that are incorporated in their company?s strategic plans such as CSR initiatives that support safety and the environment.

So, is strategic sourcing dead? This author does not believe so. However it is a process involving a lot of work, a lot of data, a lot of analysis and more than just tools in order to result in a strategic sourcing plan that can be implemented, scored and adjusted properly over time.

We look forward to and appreciate your comments.

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BUYERS would you like to save in excess of 20% this year? If so focus your e-procurement on these categories.

Tuesday, September 14th, 2010

Compared to other industries, the retail industry has always suffered from low margins and resulting low profitability. With cost of goods generally between sixty five and eighty percent dependant on the sub vertical, the answer to what categories to source first should be all of them.

?Unfortunately retail places much less of their spend under the management of these types of tools than any other industry. In fact in the mid to lower tier retail markets these tools are almost non existent.

Reality would dictate that retailers should keep an open mind and let a detailed discovery process determine the right categories and the timing. It may help to use a third party such as SafeSourcing to conduct the discovery in order to eliminate bias from the process. Bias is usually driven by an attitude of; we have always done things this way. Depending on whether the category of choice is expense related or in the cost of goods, it will have an impact on the bottom line providing all other lines of the P&L perform to plan. This author favors attacking above the line costs, but understands that certain below the line costs such as health care costs and all types of third party services can be very attractive targets.

The following categories all have attractive returns that have averaged over 22% for SafeSourcing customers during 2010 and should not be overlooked during the discovery process.

1.?Seasonal Items?????
2.?Private Label????????
3.?Fuel?????????????????????
4.?Equipment
5.?General Mdse????????
6.?Services?????????????????
7.?Dry Goods????????
8.?Transportation
9.?Seafood????????????????????
10.?Meat?????????????????????????
11.?Maintenance???
12.?Construction
13.?Office Supplies
14.?Pharmacy?
15.?Security????????????
16.?Floral
17.?Packaging??????????????
18.?Commodities?????????
19.?Hardware?????????

A good way to begin is by asking your e-procurement solution provider how they would conduct the discovery process. They will let you know who? they would like you?to make available to them,? what information they would? like access to and finally how they would plan for a sustainable process moving forward.

We look forward to and appreciate your comments.

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Does an uptick in the economy mean buyers should be looking for better pricing?

Monday, September 13th, 2010

The reason for the train ride analogy is that one area we look at when trying to track the economy is the transportation sector and it associated costs. A few of the areas worth looking at are.

1.?The amount of product moved which is normally referred to as tonnage.
2.?The amount of air cargo shipped in and out of major airports.
3.?The amount of non travel volume increase rail shipments.
4.?The increase in trucking volume.

Most of these indicators are up according to an article in the Sunday September 12th issue of the Arizona Republic titled “Economy on the Move” by Betty Beard.

Maybe before you look at the products you are shipping you should look at shipping itself. Some questions to ask that might lead in the direction a decision.

1.?Are you doing all of your shipping using a 3PL?
2.?Are you leasing warehouse space?
3.?Do you have your own fleet of trucks?
4.?What are your current diesel costs?
5.?How old are the trucks in your fleet?
6.?Do you own or lease your warehouse equipment.

The good news is that once companies start to build their volumes again they also begin to look more aggressively for new business. All of the above areas are open for negotiation and have been sourced by SafeSourcing using low cost e-procurement tools during the last 12 months at great savings for our customers. Maybe you should get on the train. Maybe you should have already been on it.

We look forward to and appreciate your comments.

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Should I buy on demand software (SaaS) for my e-procurement needs?

Friday, September 10th, 2010

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. Often as much as 100% faster. In fact there are many stories of breakeven ROI?s with your first series of e-procurement events. The biggest question you have to ask of your future provider is are you a true SaaS environment with the newest technologies available or are you a reengineered ASP provider. I?ll comment more on that later.

We?look forward to and appreciate?your comments.

Ron

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E-procurement.What’s in a definition?

Thursday, September 2nd, 2010

I was reading a blog post from the Doctor over at Sourcing Innovation today titled “A Hitchhiker’s Guide to e-Procurement: Terminology” and I thought it was great as well as very timely.

Ultimately it is up to practitioners and solution providers of these tools to educate their customers as to what the proper terms are for the tools they are using. As an example E-RFI, E-RFP, E-RFQ. I have numbers of customers that have used other solution providers and not only are the definitions different by customer; they are actually different within a specific company. In some cases everything is referred to as a reverse auction and in other situations the companies have made up their own name for the service or tool.

This author uses Wikipedia and Wictionary quite often as a source and in this case, they have a very good definition that covers most of the terminology in the entire e-procurement space as well as related B2B and B2C internet based or private network based functions. As your company moves in the direction of a computerized supply chain management solution for your company understanding what you are asking for and what you are using will make both your job and that of your solution provider easier.

We look forward to and appreciate your comments.

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E-procurement.What?s in a definition?

Thursday, September 2nd, 2010

I was reading a blog post from the Doctor over at Sourcing Innovation today titled ?A Hitchhiker’s Guide to e-Procurement: Terminology? and I thought it was great as well as very timely.

Ultimately it is up to practitioners and solution providers of these tools to educate their customers as to what the proper terms are for the tools they are using. As an example E-RFI, E-RFP, E-RFQ. I have numbers of customers that have used other solution providers and not only are the definitions different by customer; they are actually different within a specific company. In some cases everything is referred to as a reverse auction and in other situations the companies have made up their own name for the service or tool.

This author uses Wikipedia and Wictionary quite often as a source and in this case, they have a very good definition that covers most of the terminology in the entire e-procurement space as well as related B2B and B2C internet based or private network based functions. As your company moves in the direction of a computerized supply chain management solution for your company understanding what you are asking for and what you are using will make both your job and that of your solution provider easier.

We look forward to and appreciate your comments.

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