Archive for the ‘Online Procurement’ Category

Where is the best place for retailers to spend their effort to improve profitability?

Tuesday, January 11th, 2022


Today’s post is an oldie but goody by Ronald D. Southard, CEO at SafeSourcing

The answer to this posts byline is of course all three!

Obviously, all retail companies would like to focus on all three areas and there are even sub sections of these top line areas that we could spell out as needing attention. The challenge is where to deploy already taxed resources?

It does not require an accountant to figure this out. If we assume that COGS or cost of goods and services is about 75% of top line revenue that would result in a simple gross margin of 25%. Based on a number of industries reports we are also safe using a shrink number of 3% of top line revenue.

This author is aware that there are a a few companies with shrink below 1% and cost of goods below 75% which means there are also companies with gross margin better than 25%. The obvious question is are these companies that solution providers want to target for profit improvement sales? Probably not.

So, let’s look at an example of shrink improvement with data analysis tools and process improvement tools versus cost compression with SaaS e-procurement tools. Let’s assume we have a company that does top line sales of $1B. Using a shrink number of 3% shrink would be $30M annually. If you were able to reduce shrink by a third in one year, profit improvement would be $10M. If this were a supermarket company with a 1% bottom line or $10M, improvement could be as much as 100%.

Now let’s take a look at reduction in cost. If we assume the same company has COGS of 75% or $750M and that we were only going to address 20% of that number or $150 and only reduce those costs by 20% which is slightly above industry averages the net profit improvement would be $30M or 300% improvement in year over year net profit. If we were only able to achieve 10% savings which is well below industry averages, net profit would improve by 150%.

I’ll leave the gross margin example for you to figure out. In the above case it is clear that attacking COGS has an impact on the bottom line of up to 3 to 1 versus addressing shrink with your already taxed resources.

If you are interested in an immediate impact to your bottom line, please contact a SafeSourcing Customer Services associate today.

We look forward to and appreciate your comments.

If you are not sourcing your services with eProcurement tools you are missing the boat!

Monday, July 26th, 2021


Today’s post is by Ron Southard, CEO at SafeSourcing

Professional services represent one of the fastest growing procurement areas for thousands of companies. The reason for this growth includes reductions in staff, efficiencies through outsourcing non-core competencies such as IT, and cost reductions for service on demand versus full time internal resources.

SafeSourcing has completed hundreds of professional services sourcing events resulting in the following overall statistics:

Number of Service Providers Invited:  5 to 9
Average Suppliers Participating:  6
Project Timeframe:  < 30 Days
Average Savings:  24%

Here is a list of 25 of the more popular services sourced using our eprocurement tools!

1. Employee Automobile Reimbursement Plan
2. Accounts Payable Recovery
3. Event Planning Services by Location
4. Armored Cars Services
5. Audio Conferencing
6. B2B Payment Solutions
7. Background Screening Services
8. Customer Satisfaction Program Provider
9. Customer Satisfaction Program Provider
10. Customer Statement
11. Disaster Response (Emergency Cleanup)
12. Event Services
13. Facilities Asset Management
14. Temp Labor
15. Jet Charters
16. Legal Services
17. Managed Print Services
18. Payroll Services
19. Recycling
20.Waste Management Services
21.Lawn Care Services
22.Snow Removal Services
23.Environmental Services
24.Construction Services (General Contractor)

If you’d like to learn more about how to reduce your current costs for services or get a savings estimate on a specific services category, please reach out to a SafeSourcing Customer Services Associate.

We look forward to and appreciate your comments.

What’s the difference between a non-responsible and a non-responsive bidder.

Wednesday, May 26th, 2021



Today’s post is our archives at SafeSourcing.

The California Court of Appeals offered a good explanation of the difference between responsive and responsible. “A bid is ‘responsive’ if it promises to do what the bidding instructions demand; a bidder is ‘responsible’ if it can perform the contract as promised.” [1]

Non-responsibility is determined based on whether the bidder can actually fulfill the Invitation to Bid (ITB). Does the company have the necessary facilities and delivery capabilities to fulfill the required products? Determining if a vendor is responsible would have you assessing if the bidder is capable of fulfilling the products as specified, not if the bid itself meets the specifications.

Every ITB has product specifications, terms, and deliverables that each bidder must abide by. For a bidder to be considered non-responsive,  they will not conform or meet one or any of these requirements. When determining if a bid is responsive, you would assess if the bid offered meets the product specifications, terms, and deliverables; not at how well the bidder will actually perform.

When a bidder is categorized as non-responsive there are normally three steps. First, you will notify the bidder with indications of their non-responsibility. Second, the bidder will be given the opportunity to contest those indications. Finally the bidder should be permitted to present evidence that they are qualified to fulfill the products.

Please contact SafeSourcing for any needs with your non-responsible and non-responsive suppliers. We enjoy bringing this blog to you every week and hope you find value in it. 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.


Part II of here is some Lasik for retail e-procurement professionals in order to create better focus.

Thursday, January 28th, 2021


During yesterdays post Here is some Lasik for retail e-procurement professionals in order to create better focus we discussed the following four retail P&L measures and how to use them to pin point a starting point for e-procurement evaluation and events. They were

  1. Gross Sales,
  2. Cost of Goods Sold,
  3. Gross Margin and
  4. EBITDA.

Also in yesterdays post, we promised to review what underperforming the above measures means and how careful evaluation will point you in the direction as to where to begin your e-procurement journey.

Here you go!

If your EBITDA is low, and your top line sales are in line with your plan, it is pretty clear that you have either an expense problem or a cost of goods problem. If the problem is expense related the first indicator is that your gross margin is most likely in line and your costs of goods are ok relative to your plan. In this case since the issue looks like it is below the gross margin line you have an expense problem. This does not always mean that the issue is your largest expense category like health benefits. Often times the problem can be caused by mid level expense related categories particularly categories that are hard to monitor and as such hard to control like hired services. A few examples are items like landscaping, snow removal, pest control, window washing and other similar types of expenses. These expenses have multiple invoices from multiple suppliers multiple times each month and are approved at store level. As a result, eProcurement results for these categories return impressive results while also streamlining suppliers as well as the process. With out going into to much detail the exact same process works if you turn this issue around and sales are near plan and gross margin is out of line, you most likely have a cost of goods issue.

A caution that procurement professionals should be aware of is that of measuring yourself solely against your own plan. You may be achieving your plan, but underperforming the industry you serve. This author believes that this is the 2nd level of analysis required once you have addressed the items indicated above and want to take the next step in creating a sustainable e-procurement process.

I hope this helps and allows you to use the lyrics from the 1972 song by Johnny Nash titled ?I can see clearly now? as your sourcing mantra.

If you’d like to discuss further how I can personally help your company, please use our contact page as I get the updates as soon as you submit it.


Could YOUR Company be saving more money?

Friday, March 1st, 2019


Today’s post is from our SafeSourcing Archives

What prevents a business from reducing costs by engaging in eProcurement best practices? The most common obstacle we see is simply a limitation in mindset, or the lack of will to change practices that maintain the status-quo. eProcurement practices have been around for as long as the internet has, and yet we still find businesses that aren’t aware of the most up to date tools for sourcing, and for whom suggesting a change in practice is akin to blasphemy. What is the barrier to change, and how can you overcome internal objections to improving procurement practices within your organization.

A concept that has come back into the spotlight this election cycle is The Overton Window. This concept is sometimes called “the window of discourse”, and signifies the range of ideas that your audience will accept. Though typically applied to political ideas, it simply relates to what ideas a group of people is willing to consider, and not willing to consider. However, the effort to enact any type of change within an organization will come up against this concept, and will require that The Overton Window be widened. Once the window is widened/the range of concepts willing to be considered has grown in scope, you can begin to garner buy-in of improved processes. So how can we accomplish this in the procurement space? Here are a few recommendations:

  • Let the results speak for themselves: We run risk-free pilot events for new customers to demonstrate what can be accomplished with eProcurement practices. We routinely saving upwards of 20% on spends in excess of a million dollars using our process. Seeing one category save hundreds of thousands of dollars can quickly get your team to see the possibilities open to them for other categories across the business.
  • Implement cost reduction goals: If you create goals that can’t be accomplished by maintaining the status-quo, your team will have to open their expectations to considering new possibilities. “Necessity is the mother of all invention” as they say.
  • Find examples of being overcharged: We often do analysis of a company’s spend categories and uncover situations where companies are being charged 50% more for products/services than other clients of ours being charged. The only difference is that they’ve never addressed that spend and taken it out to market. If your boss isn’t interested in eProcurement, find a spend he’s losing money on that a category RFP has high historical savings in to demonstrate how much money is being left on the table with current purchasing practices.

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.

Organizing the RFP Presentations – Part I of II

Thursday, November 2nd, 2017


Today’s post is from our SafeSourcing Archives

The Request For Proposal process involves many moving pieces.  Determining the questions to ask, the information to garner and the vendors to invite can take weeks to assemble and execute, only to have to spend another week or two sifting through the results in order to put some structure together for comparison.  For many companies their time and energy is focused on these two stages with a sharp decline in resources invested in preparing for the vendor presentations.  Today’s blog will focus on some of the areas which many people fail to properly consider in advance when preparing for their onsite or webinar vendor presentations.

Lock down the initial details – Deciding on the strategy for whether to employ a webinar, on-site meeting or both is an early detail to commit to.  This decision along with the meeting time slots and duration will be key pieces to organize successful presentations.  The advantage of an online meeting format is that it gives vendors great flexibility in meeting proposed dates and times without incurring travel expenses to do so.  In these cases, garnering the presentation file in advance to be printed out and available for notes is an important aspect.  On-site presentations require more preparation but can be critical in seeing vendors who will be supporting the company face-to-face.  Interaction tends to go up in face-to-face meetings and communication that does not include voice delays over digital phone lines can make for a much smoother two-way presentation.

Provide the expectations – Vendors number one question when being invited to an RFP presentation will be to understand the customer’s expectation of their needs.  Developing an agenda, even a high level version, will go a long way to helping the vendors fashion their presentations to exactly what you want to see while providing you the framework by which you can accurately compare each presentation.  The most affective agenda will be the one that details the main points you want covered with a suggested timeframe to be spent on each.  This gives the vendors an accurate picture of how much time they will be allowed, budgets time in for Q&A, and ensures that half of the presentation does not turn into a marketing pitch about how great the vendor’s company is leaving little time to review actual content.

Planning the presentation details and expectations in advance of the meetings is an important key to help companies pin down what they really want to see and to help vendors best prepare to show it.  Tomorrow’s blog will wrap-up preparing for RFP presentations with more focus on the evaluation of the presentations themselves.  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.

What is an RFI, RFP, or RFQ Part I of VI?

Friday, May 13th, 2016


Today’s post is by Heather Powell, Customer Services Manager at SafeSourcing Inc.

The world of procurement is continually changing, and this includes the world of e-procurement when it comes to the requirement for information, a proposal, or a quote.  In this series of blogs I hope to simplify for you readers the differences between the three requests, what your expectations are when receiving the requests back, and how to make a sound business decision with what has been presented back to you.

According to a request for quote (RFI) is a request made typically during the project planning phase where a buyer cannot clearly identify product requirements, specifications, and purchase options. RFIs clearly indicate that award of a contract will not automatically follow.

An example for a use of a RFI: You now are the proud owner of a used warehouse that you want to turn into a distribution center. It has some racking but you need more racking.  However, you have no idea what the best layout will be needed, what types of rack you need, how much materials are needed, or how long it will take to install the racking. The existing racking looks in ok shape but you don’t know if it is safe, placed appropriately, outdated, or even needed. You will need to rely on experts to give you this information.  The best practice is to get at minimum 2, but recommended to get 3 to 6, requests for information from racking manufactures, distributor, and/or installers.

You may ask, why so many?  In an area where you have no knowledge, knowledge is power. How will you know between 2 suppliers that one will not overbid the materials and under bid the labor, but the other supplier will underbid the materials and overbid the labor? How do you know that the materials are the same? Does the weight vary? Did they include the weight?  It is very hard to make a sound business decision based on these two requests for information. Having a pool of bids can help you see if there are major differences between them all. Having an average will direct you to what you really need.

The application of an RFI can be used on new goods for use, re-sale, packaging design, any and all services, software, hardware, equipment of any kind, actually it is limitless as to what you can utilize a RFI for in business.

Follow me onto the next blog where I  endeavor to explain  a request for proposal (RFP) and how you can tie a RFI and an RFP into one collective project.

SafeSourcing can help you with your needs in creating, running, and reporting on an RFI for any item, project, or industry need. We can do this all electronically in your set timeline, and report it back to you in an easy and understandable package where you will be able to see the apples-to-apples comparison.

For more information as to 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.

Understanding “The Internet of Things”

Wednesday, October 7th, 2015


Today’s post from our SafeSourcing Archive.

Although it is a term that has been around for almost 17 years, “The Internet of Things” is really starting to pop its head up in research industry reports, magazines, news specials and other business journals.  The question is what is “The Internet of Things” and what does it mean for your business as we head into 2018.

The concept which had its roots begin with radio-frequency identification tags that were designed to track equipment more easily, the Internet of Things was coined to define a world in which sensors, tags, and other data points will continue being imbedded into equipment and devices allowing them to not only be tracked, but to share information like health, location, status, and supply or service levels.  In essence the network of information will expand outside of the internet into the world of objects.

So the question still becomes for businesses of how this new concept can be used to help them.  Today we will look at a few of the ways you may already be using this concepts today without even knowing it.

Intelligent Sensors – One of the downsides to human beings collecting and creating much of the data available on the internet today is that we tend to be inaccurate and fallible in the manner in which we go through this process.  No one wants to sit for 24 hours a day recording the temperature, humidity and air pressure in a room so that they at some point notify someone else that there may be an issue.  With intelligent sensors that can send alerts through a company’s network of through the internet, accurate and frequent readings can be taken every second if need to be report changes as they occur real time.  Add to the fact that this becomes independent of the most rural locations or extreme conditions and the value of these sensors becomes extremely important to companies where changes in these types of conditions can drastically affect their products.

Object to Object communication – In the example above the sensors on objects become important channels to collect information, aggregate and analyze the data and provide decision points for people to act on.  What is also part of the Internet of Things if the capability for objects, based on data from their surroundings, to communicate and request changes right away.  If the sensor on a multi-million dollar reel of airplane material could read the temperature, which must be kept in a freezer, and then send an alert to the system controlling the temperature of that freezer to slightly adjust the environment you could reduce the possibility of damage in real time without having to wait for a response.

Image and voice recognition – As technology changes and information data centers grow in size, the Internet of Things will be able to take input such as photos, video and audio and create actions based on what they see.  Consider a network video appliance that has the capability to analyze and recognize objects in the video frames as it streams and saves them.  Recognizing the shape of gun, the metrics of a car wreck, the numbers on a license plate or the shape of a face could all be used and sent to other Internet of Things objects to help create scenarios where lives are saved and disasters averted.

Over the next few months you will be hearing a lot of the Internet of Things and the affect it can begin to have on your business from financial, safety and efficiency standpoints.  To understand more about the Internet of Things or how you can begin to look at this concept in how you source your goods or services, please contact a SafeSourcing Customer Service Representative.

We look forward to your comments.


Why companies should choose SafeSourcing’s customer services for their fast track complex eProcurment events?

Friday, July 12th, 2013

Today’s post is by Ryan Melowic; Assistant Vice President of COE at SafeSourcing.

In business today most procurement teams aren’t always properly staffed.  Therefore, the cycles that would be needed in order to execute complex eProcurment events aren’t always available. In a recent example a client came to us with a project they needed completed accurately and quickly.  This project involved finding R&M vendors for their 450 plus stores.  The vendors needed to be broken down by industry and by location.  As such, SafeSourcing would need to communicate with over 400 vendors in a period of two weeks.

When faced with a tall order like this SafeSourcing has procedures we follow which will always get us to the finish line and they are as follows.

Understanding what the host would need to make their final decision.  Without knowing this it wouldn’t be possible to gather useful data for the host.  If the host wants to qualify the vendors they need to know what differentiates the vendors.  Examples might be size, experience, coverage and price, any combination of which may define the supplier.  The raw data is fine, but not a useful format in making decisions. However SafeSourcing reporting services can provide format adjustments that easily let us manipulate data to make decision making easier.

With the hosts needs defined we then lay out a proposed method and timeline in order to achieve their goals.  When using SafeSourcing our staff becomes an extension of your team.  To complete the project and timeline we assign multiple members of our team to one project such as an overall project manager and Center of Expertise associates.  So, if it is determined that it would take one team member 160 hours to complete the requirements of the project SafeSourcing might assign 4 member of our team to the project in order to finish in a week.  We have the staff needed to divide and concur you company’s fast track complex eProcurment events.

Finally, our reporting is second to none.  We insure the report package which your company is provided allow for clear decisive decisions by providing an executive summary with multiple award scenarios.  These decisions will be data driven and well thought out. 

For more information as to 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

Handling Questions for RFI/RFP’s

Wednesday, July 3rd, 2013

Today’s post is by Sarah Kouse; Project Manager at SafeSourcing.

When participating in an RFI/RFP there are two sides of the question preparation process. There are the vendors who are asking the questions and there are the questions from the sourcing company gathering the questions from all the vendors and preparing them for the client.

Consolidate and Submit – As a vendor, when you are participating in an RFI/RFP, questions may come to mind at different times and you may be compelled to send questions when you think of them.  The downfall to this is that viable questions could be missed in the consolidation process and not answered. Therefore, when you have questions regarding the content of the document, the best way to get answers to your questions is to prepare them in one document and send all of the questions in that document all at once referencing the section and/or question from the RFP the item refers to.

Prioritize by Frequency – On the customer side, once all documents containing the questions have been sent, consolidate all the questions asked, labeling each question with the company name, who asked the questions, and  analyze them to determine if any questions have been asked multiple times.   With the questions organized and prioritized in this way, a team of stakeholders can quickly and easily focus on all of the questions at once, frequently getting them all answered in a matter of just a couple of hours.  Once the document has been consolidated with all the participating vendors’ questions that document will then be sent to the client to review and answer the questions.

Give everyone the same insight – Once the document has been reviewed and all the questions answered, that document will then get sent back to each vendor who is participating in the RFI/RFP process, even if a vendor did not ask a question. The reason this document is sent to every vendor is not only to make it fair for every vendor participating, but also serves as a reference guide for any questions that may come up in the future. The vendor could reference that document to potentially quickly get their answer.   Some trains of thought are that they don’t like this approach because it allows some vendors to be lazy and get the benefits of the other vendor’s questions.  This, however, usually shows itself in how a vendor like that answers the RFP as well as the fact that as the customer you know who took the time to ask questions and who did not. 

For more information on how we can help you with your RFIs and RFPs or other 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.