Archive for the ‘E-procurement Solutions’ Category

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Creating a sustainable e-procurement or reverse auction program is based on more than just savings.

Tuesday, January 12th, 2010

Primary success in e-procurement programs such as reverse auctions of which there are many types is in many cases measured by cost reductions. That?s because within a budget period they drop directly to a company?s bottom line plus or minus some switching costs. On more than one occasion I have heard; ?did we hit a home run?? Less emphasis seems to be placed on cost avoidance in an up market and creating a sustainable process. This often results in less spend be assigned to these very effective tools then should be.

In order to ensure that results are sustainable; the strategies for all targeted e-procurement categories require consistent deployment across all departments throughout the host company. This is accomplished by utilizing a well planned repeatable process for category selection and discovery, supplier selection, and a solid strategy that is well understood by all buyers and category managers for negotiation and the award of business process.

Supplier selection and management is a critical stage that requires the understanding and participation of all sourcing professionals within an organization. One small mistake by anyone within the procurement or supply chain organization could negatively impact the potential results of an e-procurement event. Historical long term relationships that drive behind the scene comments like; ?don?t worry we?ll be fine? to a long term supplier may drive inappropriate bid behavior and lack of ongoing credibility with your program. Not to mention the potential legal implications.

If you are not having the results you would like to or have less than twenty percent your total corporate spend assigned to e-procurement tool?s that are offered in the form of? Software as a Service or cloud computing, ask your provider why?

We appreciate and look forward to your comments

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Why is the use of reverse auctions by retailers up?

Monday, January 11th, 2010

From mid tier one retailers on down the use of reverse auctions has been very limited since their inception at the end of the 1990?s. The reason is because there was very little focus on the retail segment and the tools were also very difficult to use and expensive. If retailer?s think a tool is so complicated that they can not do it themselves, they won?t use them.

We are seeing a small uptick in e-negotiation tools in retail and this author believes that some of the following quotes from the folks watching a reverse auction last week may be the reason why.

1.??This was pretty simple to do?
2.??If we hired someone we could do these ourselves with you guys?
3.??This is fun?
4.??You mean the reports are already available?
5.??I love the sports concept?
6.??It was easy to follow the marquis and what was going on from one screen?
7.??The multiple color schemes were great?
8.??I can?t believe how fast you guys set this up?
9.??We saved that much money and only have to pay what we discussed?
10.??Can we do another one today?
11.??I may get a promotion out of this?
12.??I love that calculator at the end of the bid process?
13.??I like all of the supplier data that was accessible during the auction?
14.??Now I know how the big guys get the pricing they do?

So what does this all mean for retail procurement professionals? It means that today?s tools are easier to use, more interactive, maintain your attention during an auction,? integrate gaming technology to keep it fun and are lower cost than their predecessors.

This all adds up to a focus on retailers entire spend both indirect and direct as well resulting in increased utilization by middle market and large retailers alike.

If you would like to have fun, save money and do it quickly, please visit us at www.safesoucing.com.

We look forward to and appreciate your comments.

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Some closing thoughts on e- procurement goals and resulting resolutions for the New Year.

Wednesday, December 30th, 2009

As an example, let?s take an individual look at our? #10? procurement thought ?Evaluation of low cost technology solutions?

Each and every year companies spend millions of dollars developing new business plans for the upcoming year. Basically these are the company?s New Year resolutions. Most of the fourth quarter of every year is focused on this endeavor. As we discussed in our first post of this series this means there is no excuse for not having your e-procurement goals written down.

Because of new open source software applications you should no longer have to shell out a ton of money for license fees. Your current e-procurement solution provider if using the most current technologies should not have to charge you an arm and a leg for using their application. In fact, your prices should be continuing to scale down. The need to pay increases in license fees or use fees today to have software installed behind your firewall or in a hosted environment should be compressing dramatically as a result of lower development costs for newer versions of applications based on the use of inexpensive or in some cases free open source tools. The resulting applications are then being offered in the form of Software as a Service or Cloud Computing where you use only what you need and pay accordingly.

Companies can begin to seek lower fees by simply asking their present solutions provider; why their costs have not dropped. The size of your providers IT organization adds to your providers overhead and as a result to the fees you are paying for using their tools. These organizations should be shrinking. If a current application has its roots in the late 1990?s or early in this decade you are paying more to use it as a result of the embedded cost to develop it. More current applications that use a variety of freeware tools make it possible? for today?s developers to do? multiples of the work? a single developer could accomplish as little as five to ten years ago.

Next generation applications should also include a level of intelligence that was not available five to ten years ago. Whether that is simple language versus HTML or the use of intelligent agents, the result should be easier to use applications resulting in shorter cycle times and not increases in new service offerings to compensate for reduced development costs.?
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What this all leads to for the e-procurement knowledge worker is lower embedded development costs, lower ongoing support costs and more flexibility relative to customization requests going forward. It also means that it is easier to change providers because there is relatively no technology cost required and ramp up time is almost immediate. This in and of itself will hold your current solution provider accountable to the service levels you require.

Have this discussion with your e-procurement solution provider; it may save you thousands or dollars.

We appreciate and look forward to your comments

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More thoughts on e- procurement goals and resulting resolutions for the New Year.

Tuesday, December 29th, 2009

Companies with as few as three stores and companies with thousands of stores are often looking for the same types of issues. The process and the results are very similar regardless of scale and as such require the same careful focus to drive those results. If we were to white board what should be included in our goal or resolution setting it would certainly include many of the following areas.

1.?Lower costs
2.?Consistent and improved quality
3.?Products that guarantee safety for your consumers
4.?Smooth transition to new supplier relationships
5.?Quality product specifications
6.?Unlimited new sources of supply
7.?Well thought out internal and external collaboration and aggregation
8.?Support for environmentally focused products
9.?Support of CSR Initiatives.
10.?Evaluation of low cost technology solutions
11.?Joining and collaborating with a share group
12.?Review of Incumbent suppliers
13.?E-Sourcing or e-procurement training.
14.?Existing procurement tool evaluation
15.?Existing contracts evaluation
16.?Spend evaluation
17.?Alternative geography sourcing
18.?Sourcing and Supply Chain Knowledge transfer
19.?For resale sustainable practices review
20.?Perfecting The expense category
As your organization develops their list similar to the one above, prioritization and elimination sessions will lead you to a best few focus from which you can refine your e-procurement goals and or resolutions for 2010. Please use the above guidelines as a source for your thinking. Simple goals written down are the most achievable. During the balance of this week, we will focus on many of the above five areas in more detail.

We appreciate and look forward to your comments

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On the twelve days of retail e-procurement Christmas.

Monday, December 21st, 2009

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1.?On the first day of Christmas our e-procurement service provider gave to us, a streamlined procurement process.
2.?On the second day of Christmas our e-procurement service provider gave to us, more suppliers to source our goods from.
3.?On the third day of Christmas our e-procurement service provider gave to us, pricing that works for smallest categories..
4.?On the fourth day of Christmas our e-procurement service provider gave to us, consistent and customized product specifications.
5.?On the fifth day of Christmas our e-procurement service supplier gave to us, more time for other priorities.
6.?On the sixth day of Christmas our e-procurement service provider gave to us, improved quality in our products.
7.?On the seventh day of Christmas our e-procurement service supplier gave to us, better supplier education.
8.?On the eighth day of Christmas our e-procurement service provider gave to us, a simple award of business process.
9.?On the ninth day of Christmas our e-procurement service provider gave to us, support for a better carbon footprint.
10.?On the tenth day of Christmas our e-procurement service supplier gave to us, total category e-procurement.
11.?On the eleventh day of Christmas our e-procurement service provider gave to us, safer products for our customers and planet.
12.?On the twelfth day of Christmas our e-procurement service provider gave to us, a sustainable e-procurement process and improved corporate net earnings.

Now, ask yourself if all of these goals are accomplished on your company?s behalf by your present e-procurement service provider.

We look forward to and appreciate your comments. Happy Holidays.

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TOY SAFETY

Monday, November 30th, 2009

During this season of giving it is important for Manufacturers that makes toys, Retailers that sell toys and the consumers that are buying these toys to refresh their memories as to child safety laws. These laws can be broken down into a number of areas that include but certainly are not limited to choking hazards, chemical content and noise restrictions.

There are several sources for this information and most companies that manufacture and sell toys have statements relating to the safety of those toys. A good source to begin your search is the Consumer Product Safety Commission. If you visit their website, they have a cool tool that allows you to Find CPSC Product Safety Standards or Guidance relative to a wealth of products. By selecting the drop down for toys/children products all, you can navigate to a number of documents that spell out required safety standards. You can also follow the CPSC on Twitter or receive and rss feeds of their product recalls.

This author is particularly concerned about choking hazards with the number of small give away products that come to the market during the holidays. The standards that these products should adhere to are also listed on this site.

A new tool I was just reading about for the tech savvy is a site called www.toysafety.mobi that is ideally suited to provide up to date inforamtion for consumers with mobile computing technology such as iphones and blackberry devices.

For retailers, your e-procurement solutions provider should also be able to provide you with a lot of this information.

We look forward to and appreciate your comments .

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New Moon Rising!

Wednesday, November 18th, 2009

The above can be applied to just about any subject. In this case we are talking about e-procurement, strategic sourcing, e-negotiation, reverse auctions and e-RFX which are all terms with similar meanings. You can visit Google, Yahoo, Bing, Wikipedia and other internet search sources and you will be taken to a link to a provider?s home page or to a web page with a definition of these key words. Some definitions have been updated; some solutions offer more current technology at a lower price. However the bottom line is still the same. If you assign a good amount of your spend to these types of tools the following is a partial list of benefits you should enjoy.

1. You will compress your pricing
2. You will improve your earnings
3. You will find new sources of supply
4. You likely will improve terms and conditions
5. You will likely improve quality
6. Your procurement team will be more productive
7. You will have process improvement
8. You will directly support safer products
9. You will directly support the environment
10. You will hold suppliers accountable to the line item detail.

Historically these tools have not been highly used by retailers other than the largest of corporations and even in those cases large amounts of spend have not been assigned to their use. These tools can be used for small spends, large spends and just about any spend in between. Since there is always a new moon on the horizon, there is always an opportunity for newly enlightened companies to take advantage. We are about to end the first decade of the twenty first century. Isn?t time to look at things in a new way?

We look forward to and appreciate your comments.

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Retailers; who monitors your supplier?s safety performance?

Tuesday, November 17th, 2009

This is an even more complex issue when you consider that in order to do so data is required from your organization relative to the historical performance of your existing suppliers, data from the supplier as to their own assessment of their historical performance and finally other types external data that neither you or your incumbent may have.

When we talk safety, the question that retailers need to ask their suppliers is pretty simple. What certifications do you carry relative to food safety such as Safe Quality Foods (SQF), Global Food Safety Initiative (GFSI), American Humane Certified and many more? Additionally you should question all suppliers and manufacturers relative to their USDA and FDA inspection history.

Although Green Initiatives fall into the area of the social consciousness of a company, there are a variety of questions that should also be asked in this area as well such as what are your own companies green product initiatives such as Green Seal, Eco-logo and Green Star certifications and participations and how do your existing and new suppliers support or plan to support these same initiatives.

As retailers consider their alternatives in these areas, it may be easier for them to rely on their e-procurement solution providers for this data if the provider has it included in their supplier database. Pre-populated e-procurement templates can also act as a form of scorecard for existing suppliers and potential news sources of supply. This is actually a type of automated RFI process which can save retailers a lot of work and time when trying to find additional sources of supply or when trying to drive cost down with existing suppliers. These data may also help to protect retailers from harmful litigation when products end up not being as safe as promised.

If your existing e-procurement provider can not provide these types of data on demand as a normal byproduct of your standard e-procurement process at no additional cost, you should consider changing providers?

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

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Retailers; who monitors your supplier’s safety performance?

Tuesday, November 17th, 2009

This is an even more complex issue when you consider that in order to do so data is required from your organization relative to the historical performance of your existing suppliers, data from the supplier as to their own assessment of their historical performance and finally other types external data that neither you or your incumbent may have.

When we talk safety, the question that retailers need to ask their suppliers is pretty simple. What certifications do you carry relative to food safety such as Safe Quality Foods (SQF), Global Food Safety Initiative (GFSI), American Humane Certified and many more? Additionally you should question all suppliers and manufacturers relative to their USDA and FDA inspection history.

Although Green Initiatives fall into the area of the social consciousness of a company, there are a variety of questions that should also be asked in this area as well such as what are your own companies green product initiatives such as Green Seal, Eco-logo and Green Star certifications and participations and how do your existing and new suppliers support or plan to support these same initiatives.

As retailers consider their alternatives in these areas, it may be easier for them to rely on their e-procurement solution providers for this data if the provider has it included in their supplier database. Pre-populated e-procurement templates can also act as a form of scorecard for existing suppliers and potential news sources of supply. This is actually a type of automated RFI process which can save retailers a lot of work and time when trying to find additional sources of supply or when trying to drive cost down with existing suppliers. These data may also help to protect retailers from harmful litigation when products end up not being as safe as promised.

If your existing e-procurement provider can not provide these types of data on demand as a normal byproduct of your standard e-procurement process at no additional cost, you should consider changing providers?

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

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SafeSourcing Website experiences significant traffic growth.

Thursday, October 22nd, 2009

During the last ninety day period the SafeSourcing website www.safesourcing.com has experienced significant growth globally. According to a number of rating services including Alexa and Google Analytics our website has had visitors from thirty seven (37) countries. Our reach which is a percentage measure of global internet users has grown 130%. Our traffic rank has increased 168% and our page views have increased 150%.

This growth places us amongst the top websites in the procurement space. Spend Matters and Sourcing Innovation continue to be the ranking leaders in our space. Both are required daily reading for this author.

We are very proud of our growth as it indicates that SafeSourcing is providing valuable content to regular visitors as well as registered members. We are also enjoying a good mix of both returning and new users. In reviewing these data the entire website is being explored on a regular basis including the following areas.

1. Sourcebook our professional social network for procurement professionals.
2. The SafeSourcing Wiki
3. The SafeSourcing daily Blog
4. SafeSourcing environment and safety alerts
5. SafeSourcing specifications template library
6. The SafeSourceIt? Supplier Database
7. The SafeSourcing Query tool
8. SafeSourcing Product Information Sheets
9. SafeSourcing White Papers
10. SafeSourcing Press Releases.

Thank you to those of you that have allowed us to achieve this growth.

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

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