Archive for the ‘E-supply Chain’ Category

Understanding the Synergy of Culture and Procurement

Wednesday, September 12th, 2018

 

Today’s post is from our SafeSourcing. Archives

The follow-up question to the one above could be, “Do you even KNOW what your company’s culture is versus what they intended for it to be?”

I recently attended a local ISM meeting where the guest speakers from VAP Packaging did a terrific job (with a number of their team members) explaining the importance of culture not only within their organization but for other organizations as well.   The culture they have developed has empowered their entire team with the confidence to think outside the box and a system or rewards when they do so effectively.  It was impressive.  For a long time, the culture of a company and how that company handles its supply chain have not always been on the same page.  Unity and Teamwork are preached to operations while procurement is still told to SAVE MONEY and CUT COSTS.

Opportunity not just Order Taking – As procurement professionals we are tasked with assisting the business to run more smoothly, to help save money and to help foster business partnerships that will grow the company.   In many companies this translates to “Rick, I need a million widgets.  Go get me some quotes and samples of the best ones out there.  After we decide what we want you can beat them up on price and write up the contract.”   While this does provide some value to the organization by freeing operations time to do what it needs to do, it does not account for the fact that maybe “Rick” could have presented 2 new options to the business that switch to “dongles” at half the cost, half the volume and can improve operational efficiency by 25%.   Not all companies will embrace outside the box thinking from its procurement team so understanding where the current culture stands is an important part of improving that.

Value of cost reduction – There are so many times people get enamored by the numbers.  They hear about a solution or product that has an ROI of 5x in 6 months or that can generate $500,000 in savings, and they instantly seek for ways to implement that service or bring that product into use.  What can be ignored in the process, is the fact that by introducing this new product that is going to save $500k to operations, internal procedures and personnel must now change what they are doing, resulting in a drop in efficiency of 40%, costing the company $1M over 9 months.  There can be a cost of change to achieve savings and understanding the pressure points with the organization is critical to weighing the value of a new change.

Understand the Relationships – Many professionals will see this point and think “See, don’t mess around with the vendor relationships I have spent years developing.”  This is not saying that.  The point being made here is to understand completely what relationships are currently in place so that they can be reviewed for improvement. Partnerships can be good.  They can provide security and assistance in emergencies and they can help strengthen companies when the fit is right.  Partnerships are not always good when they are defined by “I have been doing business with Jim for 10 years and he has never let me down.  I am sure he is giving me the best prices he can give me.  He even stops by once a month to take me to lunch where I hardly see other vendors.”  These types of relationships have the tendency to cover years of price increases and terms that have benefitted only the vendor.  Understand the relationships in place so that facts and research can be done to either challenge or support the value they bring to the organization.

At SafeSourcing we understand the value of understanding your company culture and have been doing it for our customers to help them effectively structure projects for years.  For more information on how SafeSourcing can assist you or on our “Risk Free” trial program, please contact a SafeSourcing Customer Service Representative.  We have an entire customer services team waiting to assist you today.

We look forward to your comments.

The Importance of Supplier Communities!

Thursday, July 12th, 2018

 

Today’s post is our  SafeSourcing Archives 

Suppliers offer a great value to sourcing events. Typically you can use the suppliers’ knowledge on their industry. Without having a knowledgeable supplier base, your sourcing events will not be successful.

By leveraging a Request for Proposal, a company can ask the vendors the best plan for their needs, thereby receiving a broad range of solutions to the problem. Much like technology, the supplier communities are constantly evolving, and typically if you run an RFQ in 2012, there will be major industry changes by 2015.

When you leverage the supplier community, you can find the best way to run an RFQ to match the industry. When you match the quoting process to the industry standard, you will receive apples to apples quotes.

SafeSourcing can help leverage the supplier community within any industry. For more information on how we can help you with your procurement needs or on our “Risk Free” trial program, please contact a SafeSourcing Customer Service Representative. We have an entire customer services team waiting to assist you today.

We look forward to your comments.

 

Are you doing business with your suppliers “A” Players?

Wednesday, February 14th, 2018

 

Today’s post is our SafeSourcing. archives!

You can classify all employees in an organization into three categories: A, B, and C players. Should an organization strive for 90% of employees being ‘A’ players? No, a healthy distribution of A and B players is what an organization should strive for.

C Players– All employees generally start as C players due to their training and inability to bring a benefit to the company right off the bat. Genuine A and B players will not be C players long. They will eventually bring value to the company and move to an A or B player. The employees that remain C players will eventually be weeded out of the company.

B Players– B players can perform the tasks given to them well, but show no initiative to perform beyond average. B players show more loyalty to a company. In many cases B players are former A players, but do not want the responsibility anymore for whatever reason (age, personal, family, etc.). B players will complete the task given to them and with their loyalty will save companies money in hiring and training.

A Players– Everyone wants a company full of A players. A players are responsible and work to bring great benefit to the company. Sure they are experienced, motivated, and bring great benefits to your company, but how long will they stay satisfied? With the knowledge, motivation, and experience A players have it can be challenging for organizations to sustain their employment. A players find greater opportunities and their loyalty is far less than B players.

What type of player is your company searching for? You cannot run a company with only one type of player. A successful organization will have a healthy balance of A and B players. Understanding who your A and B players are is an important key step.

We all work with the three different players from our suppliers and  we know it can be challenging to receive the results or information you have requested from a B or C player. If a company you are working with has not established  who their A, B, and C players are, then you could end up working with any of them for contract negotiations. At SafeSourcing we have an extensive SafeSourceIt™ Supplier database and  existing relationships with  the suppliers that will deliver the results you request. SafeSourcing finds the suppliers A players in order to bring value to your company from the outside.

For more information on how we can help you with your procurement needs or on our “Risk Free” trial program, please contact a SafeSourcing Customer Service Representative.  We have an entire customer services team waiting to assist you today.

We look forward to and appreciate your comments.

3 Myths About Firewood (Part 2)

Thursday, August 24th, 2017

 

Today’s post is by Steven Belvin, Sr. Account Manager at SafeSourcing

​In my last blog Three myths about Firewood Part I , I explained that there are 3 myths about firewood. The first myth I cracked was that you should keep your firewood close to your home. That was incorrect because your home could become a home for termites and other bugs. With this blog I will cover the other two myths about your firewood.

The remaining two myths are: 1. Bring a lot of wood inside now so you don’t have to go back outside and 2. Spray pesticides on the wood to kill pests.

​Bring a lot of wood in so you don’t have to go back outside to get more. This myth should be easy to crack based on our first myth. Obviously, you want to bring in as much wood as you can to avoid that nasty winter weather. Sounds great, however, once that wood gets indoors, any pests that may have been frozen or hiding could wake up and begin to find a new home in YOUR home. If you bring in too much firewood you could expose your home to an abundance of spiders, termites, roaches, and other nasty pests. Safe to say, we should just keep our wood outside until we need it.

​The next myth of spraying pesticides on the wood to kill pests is actually a very common mistake. The idea and desire is to kill all pests on the wood so they cannot infiltrate your home. However, spraying pesticides on your firewood will create worse problems. Most pests that can chew through wood are pretty resilient. By spraying the wood you will only cause carpenter pests such as carpenter ants and termites to simply borrow deep into the wood to protect themselves. Once you burn the spray and infested wood, you are releasing all those chemicals into your home.So, there is obviously more to firewood than meets the eye. Avoid any pitfalls and keep your home pest-free this winter by recalling these cracked myths. Also, if you are a company looking to purchase bulk firewood then give SafeSourcing a call. We can help you with all your firewood sourcing needs.

For more information on how SafeSourcing can assist your team with this process or on our “Risk Free” trial program, please contact a SafeSourcing Customer Service Representative. We have an entire customer services team waiting to assist you today.

Resources………………………………………………….

“Firewood and Pests: 3 Myths | Plunkett’s Pest Control.” Plunkett’s. N.p., 02 Mar. 2016. Web. 17 July 2017.

 

How to Survive The Psychology of The Grocery Store

Thursday, July 6th, 2017

 

Today’s post is by Gayl Southard, Administrative Consultant, SafeSourcing.

Running into the local Kroger or Safeway for a quart of milk and coming out with a cartload of unintended food purchases is universal—and it’s not our fault. Supermarkets make us do it, or at least they try. Grocery shopping is an orchestrated process. Every feature of the store—from floor plan and shelf layout to lighting, music, and ladies in aprons offering free sausages on sticks—is designed to lure us in, and seduce us into spending money. Once you enter a grocery store, it’s often not easy to get out again. A common feature of supermarkets is the one-way entry door; to get back out, you’re compelled to walk through a good portion of the store. After the one-way front door, the feature first displayed is the produce department. The impact of all those scents, textures, and colors (think fat tomatoes, glossy eggplants, luscious strawberries) makes us feel both upbeat and hungry. Also the store bakery is usually near the entrance, with its smell of fresh-baked bread; as is the flower shop, with its buckets of tulips, and bouquets gorgeous flowers. The message we get right off the bat is that the store is a welcoming place.

The cruel truth is that the produce department is less garden and kitchen than stage set. Lighting is chosen to make fruits and veggies appear at their brightest and best; and – according to Martin Lindstrom, author of Brandwashed: Tricks Companies Use to Manipulate Our Minds and Persuade Us to Buy—the sprays of fresh water over the produce bins are all for show. Though used to give fresh foods a deceptive dewy and fresh-picked look, the water actually has no real purpose. It actually makes vegetables spoil faster.A classic of this kind of customer manipulation, Lindstrom points out, is the banana—still America’s favorite fruit—whose signature ripe yellow is actually the result of painstaking marketing analyses. Sales records indicated the customers bought more bananas if their peels were Pantone color 12-0752 (Buttercup) rather than the slightly brighter Pantone color 13-0858 (Vibrant Yellow). Banana growers responded by planting their crops under conditions tailored to produce Buttercup.”1

The supermarket is designed to make customers spend as much time as possible in the store. Dairy departments are almost always located as far from the entrance as possible.   Customers will most likely have at least one dairy item on their list which will make them walk the length of the store. Mid-aisle positioning is intended to sideline the so-called Boomerang Effect, in which some shoppers (notably men) simply head for the item they need, then return the way they came.

“Music encourages us to dawdle: A famous study of background music and supermarket shoppers, conducted in 1982, found that people spent 34 percent more time shopping, with a corresponding uptick in sales, in stores that played music. And supermarkets tend to be devoid of external time cues: most have no windows or skylights, and shoppers are often hard-pressed to find a clock.

The theory is the longer you stay in the store, the more stuff you’ll see, and the more stuff you see, the more you’ll buy. The average supermarket carries approximately 44,000 different items. “According to brain-scan experiments conducted by Paul Mullins and colleagues of Bangor University, Wales, the demands of so much decision-making quickly become too much for us. After about 40 minutes of shopping, most people stop struggling to be rationally selective, and instead began shopping emotionally—which is the point at which we accumulate the 50 percent of stuff in our cart that we never intended buying.”2

Shelf order is a psychological trap. The expensive items are generally placed at eye level; generic brands are on the lower shelves so that you have to crouch. Foods meant to appeal to kids are set at kids’ eye level so that the cartoon characters on the boxes make eye contact with (short) passers-by.

The displays at the ends of the aisles (end caps) are shopper traps. Companies pay high prices to display their products there.  A product at an end cap sells eight times faster than the same product shelved elsewhere on the aisle. Also the size of our shopping carts increases the chance of our buying more. Carts have tripled in size, and they’re still growing. Shoppers tend to buy 40 percent more with a bigger cart. So what to do about all this? Make a list and stick to it. Try not to shop so often—fewer and more efficient trips to the store are easier on the pocketbook.

For more information on SafeSourcing and how we can help you with your sourcing needs, or on our Risk Free trial program, please contact a SafeSourcing Customer Service representative. We have an entire team ready to assist you today.

References——————————————-

1, 2.   Rebecca Rupp, The Plate, 6/15/2015

 

Landscape Maintenance

Friday, May 19th, 2017

 

Today’s post is by Troy Lowe; Vice President of Development at SafeSourcing.

Now that things are warming up, it doesn’t take long for your landscaping to get out of control.  Whether that be lawn, flower beds, bushes, plants or trees.  Most of these items will need to be cared for on a weekly or bi-weekly basis to keep them under control and looking nice throughout the summer.  In order for this to be done successfully, you will probably want to hire a reliable landscaping maintenance company to maintain your property.  There are a lot of factors that go into selecting the right company.  Are they bonded and insured in case there is any property damage during the routine maintenance?  How long have they business?  Going with a more experienced company will help ensure that the job is done professionally and right the first time.  You may want to check around with others in your area and make sure that the company has a good reputation.  Also, ask for references and ask key questions regarding the type of work that you will need to have performed.  Does the company offer other services such as weed control, fertilization and insect management?   These services will help keep the lawn and bushes healthy and may be less expensive if they are provided by the same company.  Below are other things that need to be considered when searching for a maintenance company.

➢ Contract Options

➢ Is the company Regional or local

➢ Experience of Management

➢ Customer Service

➢ Price

➢ Warranty

If you need help finding a licensed landscaping maintenance company, feel free to contact SafeSourcing.   We can gather all the necessary information for you and help you decide which company meets your needs.  If you would like more information on how SafeSourcing can help you, please contact a SafeSourcing Customer Service representative. We have an entire team ready to assist you today.

 

Equipping to Deliver

Monday, April 17th, 2017

 

Today’s post is from our SafeSourcing archives

In a recent study performed by Noosh, Inc., of over 5,000 companies handling almost $12 billion in procurement projects, some not so surprising trends were confirmed by the data.  One of these dealt with companies expecting their procurement teams to handle more sourcing projects with a higher degree of complexity in the same amount of time than in previous years.  Today we will look at a few areas that can be addressed to help achieve these results.

Helping hand – Several 3rd party strategic sourcing companies exist with the purpose of helping extend procurement teams in order to tackle more projects in a shorter amount of time.  Where individuals on your team may source a category like stretch wrap every year or two, 3rd party companies are sourcing the same category several times a year all over the world for companies of varying sizes.  Not only can they run a project from beginning to end, but they can also provide advice on the best way to structure a project based on what is currently working in the industry.

New tools – Investigating tools that can streamline certain areas of the sourcing process is another important step.  One example of these types of tools is a survey tool.  This tool will allow departments to quickly gather the information they need to assemble projects and structure the best approach.  When this information is combined with online RFx or Reverse auction tools, it allows the department to have several suppliers compete for the business in a LIVE online format that produces hundreds of quote adjustments from several suppliers all at once.  This frees the procurement team up to concentrate on other aspects of the eventual contract that will be signed.

Get better at tracking – Once the decision on getting extra help and getting the right tools in place has been made, developing ways to standardize and track the progress of these projects is the third area that should be examined.   Most strategic sourcing companies can assist in this area as well but in standardizing the sourcing approach, documents, project plans, expectations and roles can all be defined in order to streamline how future projects will run but also to provide an accurate timeline of when it will be completed.  This reduces the company’s vulnerability that can happen when a department attempts to source something on their own.

For more information on how SafeSourcing can help be a helping hand, provide new online tools or assist with developing stronger tracking and standardization or on our “Risk Free” trial program, please contact a SafeSourcing Customer Service Representative.  We have an entire customer services team waiting to assist you today.

We look forward to your comments.

Are you looking forward to the outdoor cooking season?

Thursday, June 2nd, 2016

 

Today’s post is by Troy Lowe; Vice President of Development at SafeSourcing.

With spring upon us, many of us will be cooking out on the grill. It’s great to be able to relax in the warm sun with a cold beverage and a spatula in your hand.  It also helps knowing that cooking your meals will be a little cheaper this season than last.  According to the USDA, supermarket prices should only rise 1 to 2 percent this year which is lower than the 20 year average of 2.5 percent.  Although the supermarket prices have risen overall, the good news is that the price of beef is about 5 percent lower and poultry is down about 4 percent.  Eating healthy will cost us a little more due to the fact of fresh vegetables being about 9 percent higher.  Overall we should be spending a little less this season which eases the stress and makes grilling out that much more enjoyable.  Below are some other notable price changes between March 2015 and March 2016.

  • Pork – Down 5.6%
  • Eggs – Up 0.7%
  • Dairy Products – Down 2.8%
  • Milk – Down 6%

Interested in learning how SafeSourcing can help your company reduce your costs and run more efficiently? Like to try a risk free trial? Please don’t hesitate to contact a SafeSourcing Customer Service Representative. Our team is ready and available to assist you!

 

Teaming up with Suppliers For More Savings…. Part II of II

Thursday, May 12th, 2016

 

Today’s post is our SafeSourcing Archives.

Yesterday we began taking a look at some of the ways you can arrange to run a sourcing project for products on behalf of your suppliers to increase the opportunity for the suppliers of those products, lower your suppliers’ costs while lowering your costs for those items or services as well.  Today we will conclude the series by looking at the project itself and the process of using the results to achieve greater value for your company.

Determine the greater opportunity – Once you have determined where your spend lies in relation to your suppliers’ other customers and opened a dialog with them about your plans, it will be time to begin laying out the scope of what the project will entail.  Much of this will be determined by the amount of involvement your suppliers wish to provide in the way of information and management of the process.  The first major part of this step will be to understand if there are other products or services that need to be included in the project even if your company does not use them.  These create a greater opportunity for the suppliers and will results in better results for you and your incumbent suppliers.  The second part of this step is to determine the volume, frequency and location these items will need to be delivered to so that you can begin rounding out the specification and terms and conditions documentation.

Control the project yourself – No matter how much involvement your incumbent suppliers wish to provide you in this process, it is imperative that you own and manage the project from start to finish.  The insight you will gain on these products and services throughout the process will be extremely valuable and will be the foundation by which the final negotiations are achieved with the manufacturers.  Establishing and maintaining these relationships can also be important in later stages should there be customer service issues that your suppliers are unable to leverage properly themselves.

Leverage the results to your advantage – When the project is complete you will be left with a detailed view of the manufacturers, their offerings and their pricing.  You will have at your disposal all of the tools necessary to not only negotiate better value from the manufacturers but also better terms for how those products and services are then charged to you from your suppliers.  Your efforts will be used by your suppliers with all of their customers, improving their margins across the board.  This type of leverage will allow you to reduce or eliminate upcharge percentages from your suppliers or possibly to receive some other benefit in exchange for the results you were able to achieve.  This step would include reaching out to the manufacturer(s) selected and obtaining a letter of intent stating you are working with them and they will honor the pricing to your suppliers and their customers as well.

Sourcing projects on behalf of your suppliers may not be something you are used to running; however the benefits are just as real as traditional sourcing efforts.   These projects provide manufacturers greater volume opportunities and provide your suppliers and their customers and you with better service, value and pricing and should be included in all annual project reviews.  For more information about SafeSourcing or on our “Risk Free” trial program, please contact a SafeSourcing Customer Service Representative.  We have an entire customer services team waiting to assist you today.

We look forward to your comments.

Teaming up with Suppliers For More Savings…. Part I of II

Tuesday, May 10th, 2016

 

Today’s post is from our SafeSourcing Archives

It seems like every article and blog you read about sourcing deals with how to get the best value out of the relationships you have with your vendors and for most companies this is not a bad thing.  One of the areas that frequently gets overlooked is the opportunity to leverage your company’s spend on behalf of your suppliers to achieve better pricing for you, them and their other customers.  Products like pallets, roofing materials, corrugated or other packaging related material are perfect categories to look for this situation because they are frequently costs that are passed straight through from the manufacturer to your supplier to your company.

By negotiating better prices than your suppliers have themselves, you can help your suppliers lower their costs for their other customers and you.  This gives them added incentive to work with you and can provide a much bigger spend opportunity to the vendors than just yours alone.  Today’s blog will focus on some of the steps you can take in engaging all of the interested parties in this process.

Understand your portion – Before anything gets set in motion or communications are begun with outside suppliers or your incumbents, it will be critical to get an idea of where your volume of product from your suppliers falls in relation to their other customers.   This understanding will help you and your company level set before speaking with your suppliers about the project.  Your leverage will come in direct relation to the portion of spend your company represents with not only your incumbents but also the amount it would represent for a new supplier.  If you make up 10% of your incumbents pass through cost for a product, you still may be able to run the project, however the leverage your spend and the results you achieve represent will need to tempered differently than if your spend represented 50% of your incumbents spend in this area.

Engage your suppliers – At the onset, engaging your suppliers and/or distributors in this process will be key.  By letting them know in advance that you are looking to negotiate your volume on your own, you give them an opportunity to examine their current suppliers and customer needs and help you form an event that provides a much larger opportunity for the market.  The other advantage to notifying your suppliers, regardless of their involvement, is that there will be no surprises once the process is complete and they understand the direction your company is going.

Tomorrow we will look at the final steps to consider when running projects for products on behalf of your suppliers.  For more information about SafeSourcing or on our “Risk Free” trial program, please contact a SafeSourcing Customer Service Representative.  We have an entire customer services team waiting to assist you today.

We look forward to your comments.