Archive for the ‘E-procurement Solutions’ Category

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Here are Ten Steps that procurement professionals can use to insure safer and more eco-friendly procurement.

Monday, March 29th, 2010

1. Be pro-active in driving product safety within your company and also supporting eco-standards in the procurement process that support your companies CSR initiatives.
2.?Pay it forward with all of your trading partners by sharing what you are doing, how you are doing it and asking them what they are doing to support yours or similar initiatives.
3.?Educate your employees and trading partners about common safety standards and guidelines such as the SQF Certificate www.sqfi.com? or ISO 22000.
4.?Educate your employees and trading partners about common eco-standards such as Green- Energy National Standard www.green-e.org or EcoLogo www.ecologo.org.?
5.?Point associates and trading partners to free educational websites such as www.safesourcing.com to use their free SafeSourcing Wiki or the Sourcebook professional social network for procurement professionals.
6.?Only use trading partners that follow your lead.
7.?Train your team to understand and use all available tools that insure supply chain safety such the free daily safety in sourcing blog at www.safesourcing.com? or the low cost SafeSourceIt Supplier Database and Reverse Auction Tools.
8.?Impose a system of measures and controls to monitor performance against clearly defined goals.
9.?Start at the top and engage all levels of your company.
10.?Measure your company?s progress with Triple Bottom Line Accounting or TBL.

We look forward to and appreciate you comments.

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What does SafeSourcing do in the E-Procurement Space?

Friday, March 26th, 2010

Our SafeSourcing vision is to be the leader in knowledge driven retail e-procurement solutions that drive down costs and improve quality with an additional focus on safety.??? Beyond safety, we also focus on support of the environment which is a top of mind CSR issue within the retail executive suite.

By assigning as little as 10% of their cost of goods or expense related items to these tools a retailer can improve net earnings by up to 100% while also providing their consumers with safer products that support a reduction in the industries carbon footprint.

With SafeSourcing?s innovative e-procurement tools, a buyer can initiate reverse auctions or requests for information using the SafeSourceIt? e-procurement tools for new contract purchases, spot buys, replenishment, aggregation and collaboration with other buying organizations, saving as much as 30% to 40% in the process and then simply drop that data into our SafeContract? contract management solution to eliminate issues such as ever greening which costs the retail industry millions annually. Alerts can then be set that will remind procurement knowledge workers of required actions in the future as they arise.?

To support the above initiatives our SafeSourceIt?? global retail supplier database consisting of more than 380,000 suppliers contains thirty-five unique certification standards that are supported by our best practice initiatives such as GFSI, ISO 22000, Green Seal, ECO-LOGO, Fair Trade, SQF and Certified Humane Raised & Hand-Led to name a few. As our database continues to grow all SafeSourcing participating suppliers are regularly vetted for their support of ours and our retail partner?s socially responsible initiatives including their eco-friendly practices to insure continuity.

We look forward to and appreciate your comments.

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OK so YOU have finally decided to stick your toe in the e-procurement water! NOW WHAT?

Thursday, March 25th, 2010

First and foremost to getting this process right is to select a solution provider or partner that knows what they are doing and is willing to hold your hand during the early part of the process. The plan for each company will be somewhat different as we have discussed in a number of previous posts. There is however a general order to things that will offer the best opportunity for success.

1.?You need a strategy
2.?You must complete a detailed discovery
3.?You must understand how to set up events even if done by your provider.
4.?You must have a quality process and extensive database for sourcing suppliers
5.?You must clearly communicate how events will be run or executed to all involved parties
6.?You must review the process for sustainability and adjust as necessary

As mentioned above it is incumbent upon your e-procurement solutions provider to be able to assist you in completing these tasks in a reasonable period of time. You should be checking the background of the team and their leadership that will be assisting you to insure their understanding of the retail industry such as operations, technology, procurement, warehouse management, logistics, transportation, loss prevention, store management and other functional areas of your business that will be sourcing products and services.? Retail is about detail and detail will improve quality, reduce costs and insure success of your new e-procurement process.

We look forward to and appreciate your comments.

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How does a price index play into e-procurement practices?

Thursday, March 18th, 2010

From a simplistic perspective an index is a system used to make finding information easier. There are any numbers of indexes or indices available to help procurement knowledge workers insure they are sourcing products at the best possible pricing. The key word here is price as what we will be discussing are specifically price indices.

According to Wikipedia a price index (plural: ?price indices? or ?price indexes?) is a normalized average (typically a weighted average) of prices for a given class of goods or services in a given region, during a given interval of time. It is a statistic designed to help to compare how these prices, taken as a whole, differ between time periods or geographical locations.

Price indices have several potential uses. For particularly broad indices, the index can be said to measure the economy’s price level or a cost of living. More narrow price indices can help producers with business plans and pricing. Sometimes, they can be useful in helping to guide investment.

Normally an index reflects the current and historical price of a variety of commodities ranging from metals to grain. A common index used in sourcing petroleum products is OPIS or the Oil Price Information Service which you can learn more about by visiting www.opisnet.com.? However in order to drive the best possible fuel pricing there are other dependencies such as whether you are doing spot buys or bulk purchases and these strategies will determine what specific index you would want to review as well as it?s relation to other product information sources such as Platts or the Gulf Coast spot assessments.? This will put you in a better position to determine how to bid the product and also earn a discount relative to the lowest common denominator.

All other commodities have similar sourcing issues dependant on what the highest cost item is in their product makeup. An example here might be the cost of grain in the feeding of cattle or poultry.

Ask you solution provider to explain these tools to you and to recommend how you might use them toward the best outcome.

We look forward to and appreciate your comments

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Retail e-procurement savings. How many times have we heard we can do it better ourselves?

Tuesday, February 23rd, 2010

And for those very large retail companies that have very expensive internal tools that were sold to you by the largest players in the space. Ask yourself why your event savings are much less than those reported by companies who have outsourced this functionality? If you want to drive the greatest possible savings across the broadest range of categories in the shortest amount of time; and have a sustainable process moving forward keep reading..

The question one needs to ask is; what type of event services does my e-procurement provider offer? If your company is deciding to try self service, which is to be 100% self-sufficient, you need to know if your provider offers readily available classroom education that can be conducted on-site in order to train your team in all the nuances of event support. These skills are the foundation that allows e-procurement providers to support large volumes of events in a full service mode, which drive greater savings over the long term. Knowledge transfer in this area is one thing; the passion, skill and headcount to carry out these practices on a day by day basis are what drive results.

Typically event services falls into two broad categories:

1. Event management
2. Event monitoring and support.

Event management provides end to end e-sourcing support that begins with a companies overall strategy and ends with the actual execution of the e-procurement event. This is a true cross category effort that includes a rather lengthy list of services that may include buyer training, supplier selection, category discovery, supplier communication, the strategy for taking a category to market, training and overall supplier expectation management.

Event monitoring and support is actually the tactical implementation of the over all e-procurement event management process. This may include all communications with suppliers on the day of an event including making sure they have access to the system, get logged in properly, don?t have problems placing quotes, monitoring supplier and buyer system communications techniques during an event such as notes and texting and being available post event for questions as needed.

These services are normally provided by people behind the scenes with a very specific skill set. If you plan to do self service it would be very wise to make sure you have them covered at the same quality level.

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

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Retail Procurement professionals should visit the SafeSourcing Wiki?

Monday, February 22nd, 2010

According to the king of all wikis, Wikipedia; a wiki is a collection of web pages designed to enable anyone who accesses it to contribute or modify content, using a simplified markup language. Wikis are often used to create collaborative websites and to power community websites. For example, the collaborative encyclopedia Wikipedia is one of the best-known wikis. Wikis are used in businesses to provide affordable and effective intranets and for knowledge management. Ward Cunningham, developer of the first wiki, originally described it as “the simplest online database that could possibly work”.

“Wiki? is a reduplication of “wiki”, a Hawaiian word for “fast”. It has been suggested that “wiki” means “What I Know Is”.

So, what is the SafeSourcing Wiki and why is it any different? SafeSourcing is a company dedicated to procurement, to retail and to e-negotiation while also supporting a supply chain that is safe and environmentally sound. It makes sense that the SafeSourcing Wiki would be referred to as a specialized wiki (in this case retail e-procurement) that concentrates at a minimum on any or all of the following.

1.?Retail procurement terms and links.
2.?Safety standards and definitions and links.
3.?Environmental certifications and definitions and links.
4.?Educational content for procurement and supply chain professionals.
5.?Procurement templates for commonly sourced products and services.

The nice thing about wikis is that the definitions are not static. Authorized users or members can add to definitions or create new definitions and terms as well as rate site content. In this way a body of work can grow from the collaborative contribution of all users and visitors and assist in to providing a reliable source of data for professionals in a specialized field.

Please visit the Safesourcing wiki regularly and add your comments, terms, definitions and suggestions. This section of the SafeSourcing website is free tool, and it is for your use as a retail procurement and supply chain professional, the most difficult job in retail.

We? look forward to and appreciate your comments.

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Why use E-Negotiation, e-Procurement or Strategic Sourcing tools?

Tuesday, February 16th, 2010

This author has discussed on many occasions the various benefits to retailers of using e-negotiation tools. Not the least of which is significant profit improvement. Simply put if a retailer were seriously to assign twenty percent of their above the gross margin line spend to these types of tools, they could increase their net earnings by up to 100%. In addition, much of the following would also happen.

1.?They would continue to source high quality products.
2.?They would continue to have great supplier relationships.
3.?They would free up time to do other tasks.
4.?They would improve their company?s net earnings by up to 100%.
5.?They would support our fragile environment.
6.?They would support global food and product safety initiatives.
7.?They would have a larger audience of piers to converse with daily.
8.?They would have a single source of information about their profession.
9.?They would be instantly alerted to product recalls.
10.?They would support a traceable supply chain.
11.?They would have an endless source of new suppliers to review easily.
12.?They would have product specifications at their finger tips.

If you are wondering why most companies are not enjoying these benefits, the following are the objections we to often hear during initial discovery meetings with managers that have not been exposed to e-negotiation tools in the past.

1.?I already get the best cost.
2.?We?ve done business with this supplier for years.
3.?I don?t have product specifications.
4.?I don?t have time for this.
5.?Switching costs will be too high.
6.?I can?t insure the same quality.
7.?We need to adhere to certain standards.
8.?What about my relationships.

One thing you may notice is that the companies almost always include me or I and almost never we. To much individual emphasis is not a good thing. Healthy skepticism is. If you have an objection that is not listed above, or they pretty much fit your thinking, please review the dozen benefits above and weigh your objections against them.

As always, we look forward to and appreciate your comments

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Giving it your best is more than a practice.

Friday, February 5th, 2010

Best practices only become best practices through a thoughtful paying forward of one?s careers learning to others in order to shorten their educational curve to the ultimate benefit of customers, partners and other stakeholders they may interface with in the hope that they will do the same thing.

According to Wikipedia a best practice asserts that there is a technique, method, process, activity, incentive or reward that is more effective at delivering a particular outcome than any other technique, method, process, etc.

When a company indicates to you that they use best practices, does this mean they are supporting what is the best practice for the entire industry they serve such as the procurement space. Or does it mean they are the best practices for just their particular product family?

This author does not believe that a best practice is just following a standard way of doing things that can be carried out by multiple organizations. A best practice is a life long process that by its nature has to evolve over time as tools, businesses, and existing processes change so that a current practitioner performs similar tasks more efficiently or cost effectively.

If one uses best practices, the result should?be an ideal state that a person or an organization set out to achieve in the first place. In fact if the process used is actually a best practice shouldn?t all of a companies customers use exactly the same process. I?m not sure that this is ever a question one asks when looking for a referral about a companies service offerings. Please tell me about your companies? best practice? Are they consistent and carried out each and every time to the desired result?

One way to ensure good quality results is to provide templates that can be used over and over again and are evaluated at the completion of each practice or session of a particular deliverable and changed as need be. This then requires passage to other customers in order to insure the integrity of the process. This elevates the actual process beyond just a buzzword and moves a particular process in the direction of becoming a best practice that drives similar results on a consistent basis regardless of customer.

This author will continue to refer to our services offerings as high quality process techniques focused on continuous improvement that deliver anticipated results. Our customers, supplier participants and business partners will determine if they are best practices for them.

We look forward to and appreaciate your comments.

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What is The Transportation Intermediaries Association or TIA?

Wednesday, February 3rd, 2010

The Transportation Intermediaries Association (TIA) is the premiere organization for third-party logistics professionals doing business in North America. TIA provides resources, education, information, advocacy and connections to establish, maintain and expand ethical, profitable and growing businesses in service to their customers.

There are a number of certifications offered through the TIA that signify the quality of transportation providers. Please read on to learn more about them.

TIA – Certified Transportation Brokers:
Since1986, the Certified Transportation Brokers designation has signified the highest level professionalism and integrity in logistic brokers. The CTB program tests the knowledge of participants on brokerage, legal and regulatory requirements, as well as the latest trends in transportation and business management.?

TIA – Performance Certified:
The TIA Performance Certification Program is the first business certification program for professional 3PL businesses with proven expertise in logistics. This certification takes the best features of TIA’s? P3 and GPP products, and combines them with the TIA name.

The Platinum Performance Program (P3):
A main feature of this program is that participants are identified by the P3 logo as service providers committed to a set of operating best practices designed to deliver the highest level of customer service. The name Platinum Performance Program and its logo are becoming a standard by which customer service is measured.

Ask your e-negotiation solutions provider how they evaluate the transportation companies they work with and what certifications they hold?

We look forward to and appreciate your comments.

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What consitutes a complex e-negotiation event or reverse auction.

Thursday, January 14th, 2010

Definitions are often tied to the concept of a set of parts or elements which have relationships among them differentiated from relationships with other elements outside the relational regime.

So how does one define a complex e-negotiation event? On the surface it may be an event with a large number of line items within a particular product set such as generic drugs in the retail space or raw materials used to manufacture components that require special handling, shipping and standards adherence.

This author would suggest that any event including multiple line items each with different specifications, order quantities, delivery locations, multiple suppliers not bidding on each line item, a split award of business and the size of the spend qualifies as a complex event. Adding to the complexity may be the overall strategy required when sourcing the right mix of suppliers to compress pricing properly and drive early and consistent bid activity…

The above example would qualify as organized complexity where there is a non-random, or correlated, interaction between most of the parts. In order to support? complex events, your supplier needs to have an understanding of the specific market place and practices and processes in place that allow these activities t bring complex events to market? in the shortest period of time. Generally this should occur within less than two weeks from event notification to event completion.

In a two part post from October of 2008, this author tried to define the relative complexity of the retail environment and its potential impact on the use of e-procurement tools. Specifically we identified the following areas of interlocking complexity.

1.?Supply Chain complexity.
2.?Rate of change in the global supply chain.
3.?Long term inherited supplier relationships.
4.?Lack of retail procurement staff.
5.?Lack of time.
6.?Multiple sources of supply.
7.?Limited view of new sources of supply.
8.?Confusion as to who?s the customer and who?s the supplier

Being comfortable that your solution provider understands your market place and has a well defined process for hosting Complex e-negotiation events insures that they are not difficult to host.

We appreciate and look forward to your comments.

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