Archive for the ‘Procurement Solutions’ Category

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Make sure that you are not being shunned by your procurement team!

Friday, April 8th, 2016

The numbers of words that end in TION are in the thousands . According to Wikipedia to be shunned is to modify the behavior of a member. Another definition that probably better suits the purposes of this post is from Wiktionary is, the act by which something is shunned; avoidance.

The reason for my play on words (SHUN versus TION) is to call attention to a similar practice of continually offering objections to processes that are advanced, modern and return greater results than more traditional procurement methodologies. Think of it as a form of enlightenment, which in its own right caused a lot of the other type of shunning over the course of history.

You might even call these OBJECTIONS. Have you ever heard any of these?
1. We don’t believe in Reverse AUTIONS
2. This process does not support our TRADITIONS
3. We only have one or two OPTIONS
4. We have no SPECIFICATIONS
5. They don’t understand our CONFIGURATION
6. We have never been good at COLLABORATION
7. We already know how to get the best QUOTATION
8. We have the best prices in the NATION
9. We are under no OBLIGATION
10. We already have a handle on the best VALUATION
11. You can not guarantee our SATISFACTION
12. We know what we are doing and don’t need any procurement EVOLUTIONTION
13. This is nothing more than useless IMPROVOSATION
14. We won’t get better pricing just by  category CONSOLIDATION

There will always be people on your team that fight progress, don’t let them TION you. If you’d like someone to change your PERCEPTION, call a SafeSourcing customer services representative of an INTRODUCTION.

We look forward to and appreciative your comments

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Lean business practices create a weighty issue.

Tuesday, May 6th, 2014

Todays post is from Ronald D. Southard, CEO of SafeSourcing Inc.

This author tires of the desire of businesses that are trying to reinvent themselves and in so doing constantly coming up with new buzz words, industry terms and business jargon in order to try and prove that they are thinking differently and as such should be trusted to be on the right path. Maybe their original business plan was just flawed and they are not deserving of our trust.

Lean in any functional area of a business simply means producing more or getting more done with fewer resources. I’m not sure this is a great message for companies that are just launching, trying to grow or improve. If you’ve been around for while, and your customer reads between the lines properly, this may just mean that you did not plan your launch properly or react properly to market indicators in the past.

We all know that lean practices were originally a move to reduce costs in the manufacturing process and since it worked for manufacturing where we are typically talking about thousands if not millions of pieces and parts, other companies began to think why not for our business. As such let’s apply the term lean to the supply chain or the procurement space. Any one that knows the procurement space already understands the lack of resources.

The goal of every business should be to provide the end user or customer with what they want or what you have promised them at a fair price. If you do so, that customer and others that hear about that customers experience should buy more. When this happens, if the business plans appropriately they should grow and grow profitably. And this should create new and sustainable jobs. So, how is this any different than the way businesses were run 50 years go or even 100 years ago? The truth is that it’s not.

The decision to not hire, to try and do more with less and to reposition resources rather than firing someone is a better way to run a business. Unfortunately they do not teach this in business school. This author has been through many mergers, acquisitions, downsizings and the like over a lengthy career. One thing you can always count on in these scenarios is let’s cut expenses. You can call it lean, but it’s not.

So, let’s not hide behind the term lean or other business jargon or buzz words.

If you’d like to learn more about how SafeSourcing can help you reduce costs without reducing headcount, please contact a SafsSourcing Customer Services Account Manager.

We look forward to and appreciate your comments.

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“The Negotiation Began Long Before the Quote. Or, Make a Plan and Stick with It”

Friday, August 9th, 2013

The answer may be surprising. One may assume that the negotiation begins when the vendors begin quoting. This is a reasonable assumption, but I know that negotiation begins long before this point.

Often, in procurement, a negotiation can begin with the writing of the specification. I find that when the host organization is writing their specifications, they are forced to rely on their incumbent vendors for details about the products or services that they are providing. During this process a vendor may have the upper hand and, as a result, may influence the specification in a way that will benefit them throughout the process. Not so long ago, a specification was written for a fairly simple manufactured product. The specification for this product dictated the use of stainless steel. This would not have been an issue, except that only one of the vendors was able to meet the specifications. It turns out the use of stainless steel was patented in this case.

Even more often, this type of influence can be felt in the days leading up to an RFQ. Typical vendor negotiation tactics during this timeframe may include calling on the sourcing partner or host organization directly to try to get time extensions or to attempt to implement last minute specification changes as discussed above. Worse yet, they may also use this time to negotiate for higher prices. If a maximum has been set for price submission, it is not uncommon to hear feedback that these prices are too low. While these complaints may be valid, the timing seems suspect. In these last minute cases, it is important to react carefully and avoid being forced into a decision that you would not have made two weeks ago.

So, how do you sort through the feedback and specification input (solicited or not)?

You have to make a plan and see it through. Your strategic sourcing partner has experience navigating vendor communications. They are actively tracking the feedback and working with the vendor community make the journey from planning an RFQ to awarding business go as smoothly as possible. Place your trust in both your partner and the process and you will find favorable results.

We look forward to and appreciate your comments.

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Procurement Camouflage! At SafeSourcing we’d rather wear ORANGE.

Monday, August 5th, 2013

Today’s post is from Ronald D. Southard, CEO at SafeSourcing Inc.

I began working in the Supply Chain in 1970. I was in the US Air Force and actually worked in Base Supply. My certification was inventory management specialist AFSC 64550 and then supervisor AFSC 64570. We did not have category managers at that time, although our job was similar.  We had to understand our category or categories in depth, evaluate usage, buy in advance of need, schedule shipments to just about anywhere in the world and do it on time and within budget. No $600 toilet seats in this job as the country was still at war. So at this point I have pretty much seen it all. Technology has and continues to advance at an ever increasing pace. Individual areas mentioned  above have become areas of specialization such as logistics. All sorts of naming conventions for a particular practice like category manager have come and many have gone.

So what’s the point you ask? The point is that the base function of procurement  has not changed that much from my description above, nor has how one attacks the overall procure to pay process. And that is precisely where the term camouflage comes in. We don’t need Wikipedia or an online dictionary to define the meaning of camouflage.  Camouflage is worn in order to blend in to the current environment. It is worn to be the same so that others cannot see you for what you really are.  On the other hand, hunters wear orange so that they can be seen and seen clearly as just  that; different! Different from the trees, different from the animals, different from the grass. Very plainly it is worn to be seen as a hunter and not as the prey. The camouflage keeps them safe.

I think many companies in the Procurement, eProcurement and Procure to Pay space wear camouflage. They live in what Nido Qubein the President of High Point University likes to call “A Sea of Sameness”. They are doing the same things that others have done for years in the same way with little to differentiate them from one another. Technology is not the differentiator needed in this space, ideas are! Executable ideas are the foundation for wearing ORANGE, for standing up and standing out.

Let me give you an example without going into too much detail. After every RFI, RFP or RFQ we run at SafeSourcing, our SafeSourceIt™ system  automagically sends  a survey to all participants. This includes suppliers as well as the host. We use our SafeSurvey™ tool.  Think of Survey Monkey but better. Many of our customers use this tool for their internal and external communication.  You can’t imagine all of the ideas we get from this simple process. The information allows us to grow our sourcing intelligence as well as our application design. Last week we received a survey from a customer that participated in a very complex event for Safety Supplies. The input was not positive on the surface. Comments centered on the complexity of entering the data in the way that we required. I was something like this. We have never been asked to enter data in this way (our secret sauce). Although the tool was easy to use with no screens to toggle between, why would you collect data in this format (we call in decile based sourcing).  Later that week, this same supplier called me and said I have used many eProcurement tools and the more we think about it, although it was tough for us to price this way (oh well), we are thinking about using SafeSourcing in order to bring our costs under control. Can we set up a meeting? By the way, savings for this event were seven figures.

What caused this type of response? ORANGE thinking (out of the box) swimming against the current to get out of the sea of sameness as our camouflaged competition.

If you’d like to learn more about how to attack your costs in a more creative way, please contact a SafeSourcng customer services representative.

We look forward to and appreciate your comments.

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Do you want onion with that?

Monday, May 20th, 2013

Today’s post is by Mark Davis; Sr. Vice President and COO at SafeSourcing. Mark asks ”

It wasn’t too long ago that restaurants and quick service restaurants included onions on things they served as part of the package.  If you didn’t want them included you needed to make a special request. Somewhere along the line onions must have gotten a bad name because more and more when you order something they tell you in advance and give you the opportunity to remove them from the deal right then and there.

It occurred to me that I have begun seeing this mindset frequently in the procurement world as well, as departments are now getting to choose when the procurement department gets brought in and at what level they are participating.  Like the onion, I don’t think procurement teams have deserved their new fate, but like it or not, it is the way many companies now operate.

Today we will be looking at some ways to deal with this change using methods not unlike a chef would in order to keep the onions in the dish and keep the customer happy.

Understand the onion – One of  the many  issues that many procurement departments are dealing with is that they do not truly understand the issues other departments have with involving them. Without knowing why someone is hesitant to include you it makes it difficult to counter on why you should be included.  Arguments like “you only care about the lowest price”, “This project is too complicated”, “we are too far along”, “this isn’t a commodity” are common and how they are responded too must be addressed in advance by your team so that you can acknowledge the other departments’ hesitancy.   Please review the SafeSourcing blog on handling objections to help with this.

Transform the onion – In my family I have people who would not touch a raw onion to save their life but have no problem eating onion rings (I know, I don’t get that either).  By transforming the onion it becomes an agreeable object.  There are times when procurement teams need to undergo a similar transformation by assisting departments in ways that help them while still achieving your goals of controlling costs.  Working on requests for proposals that offer vendors a best and final price adjustment can help everyone achieve their goals in a new way that does not threaten the integrity other departments are hoping to keep.

Don’t tell on the onion –  I have watched people cooking meals sneak unwanted ingredients into the recipe masterfully in ways that no one would know only to be undone by feeling the need to tell their secret afterwards.  Telling someone they just ate an onion they didn’t know about rarely leads to them to start liking onions.  For a procurement professional this means when you get an opportunity to help a department like IT run a project on enterprise software don’t ruin it by touting about how you reduced the cost, instead focus on how you helped that team find the best solution for the company while getting the vendor to include free training and a reducing the costs by 12%.   This lets the business owners hold onto the fact that the decision was truly made based on value and not just price which is really how every project should be.

If you are a procurement team struggling to get included in all of your company’s spend projects we at SafeSourcing are constantly helping our customers and can assist you by explaining our recommended strategy for helping departments that historically not wanted “help.”

 For more information on these strategies 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.

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I could not believe the question, but it was asked in a category manager meeting.

Wednesday, March 28th, 2012

Google or Bing certainly might help here, but in the old days we needed to know this stuff. So let me give you an old fashioned answer.

Typically this author thinks of this process in the six steps that follow

?? 1.?When buying a product or a service a decision is required to do so.
?? 2.?Once the decision has been made, analysis of what you are currently? buying in what volumes for use in what locations that will continue to satisfy your needs to be completed.
?? 3.?Your purchase offer is submitted to a supplier or suppliers in order to collect pricing and other information such as the Terms and Conditions required in making your decision.
?? 4.?A contract is signed for the product or service that outlines the responsibilities of the involved parties as well as remedies if contract terms and conditions or volumes are not met.
?? 5.?A purchase order is issued with the appropriate approvals that match to the specifics as outlined in the contract in order to properly manage the contract.
?? 6.?Payment is generated based on the purchase order submitted against the contract.

Sometimes there is a steep where an LOI or letter of intent is issued between step 3 and step 4 in order to take advantage of contract terms earlier in the cycle.

So now what happens if you don?t have a contract management system or a purchase order management system? Generally it?s referred to as leakage. In about 12 months you will be very familiar with it.

Contact SafeSourcing and let?s see if we can help you out with our procure to pay solutions.

We look forward to and appreciate your comments.

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I’m proud to be a Veteran

Friday, November 11th, 2011

The background for my career began in base supply in the U.S. Airforce during the Vietnam era. My AFSC was that of an inventory management  and logistics specialist. I still use those tools today and think often of all the brothers and sisters in all branches of the service both past and present on this day.

Thanks to all of you for what you have done  and continue to do for our country.

We appreciate all of your contributions.

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Many Mid Tier One and Tier Two retail companies can not afford advanced analytic software! The truth is they also can’t afford to not have it! So what to do?

Friday, August 12th, 2011

Let’s first try to understand what analytics actually is. According to Wikipedia’ a simple definition of analytics is “the science of analysis”. A practical definition, however, would be that analytics is the process of obtaining an optimal or realistic decision based on existing data. Business managers may choose to make decisions based on past experiences or rules of thumb, or there might be other qualitative aspects to decision making; but unless there are data involved in the process, it would not be considered analytics.

So why can’t many companies afford analytics? The answer is because they are complex. In my early days of selling data warehouses with one of the industry leaders, in fact the best in the space today the combination and analysis of data from disparate functional areas of a business were nearly impossible. As such if a company was advanced enough to have this type of information it most likely existed in islands that evolved into departmental data marts like category management systems. These data marts ultimately evolved to complex databases with relational data models that allowed access of data contained in these  disparate systems and then into on line analytical systems capable of managing massive amounts of data .

It’s probably no surprise that the early adopters of these technologies were the biggest of the big companies and governments. So when we get to analytics that support e-procurement systems or procurement systems in general, the systems that provide the analytics have to reside within a company’s corporately supported data model. If not, they initially at least have to have a procurement data model that supports data contained in ERP systems, Financial systems etc. Since the trend is not a backwards direction of recreating islands of information,  pilots of these systems that show significant benefits, will only end up as a corporate roll out through integration within the corporate framework and data model.

I could go on to explain the expense and time associated with these implementations, but there is a reason that these solutions are not readily implemented within lower tier one and tier two retailers. Number one is that many still do not have easily accessible corporate views of data. Number two is the cost; resources and time to implement them are difficult for these companies to justify.

As such there continues to be a need (niche) for providers that understand retail from an operational and financial perspective that know where to look, what to ask for and can assemble, analyze and report on data the old way to support the procurement data requirements of mid tier one and tier two retailers.

We look forward to and appreciate your comments.

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Hey buyers! The economy is still terrible. Maybe now is the time to finally try reverse auctions.

Wednesday, August 10th, 2011

However, we continue to see a reasonable uptick in the use of e-negotiation tools in retail and this author believes that some of the following quotes from a retail CEO and his team  that watched their first  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”

Why not join others that have come a little late to the party. You can still benefit because 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. If you happen to have already been doing this for years, why not find an easier way or do it less expensively.

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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Getting to know your specifications.

Friday, June 17th, 2011

Here is a challenge: Pick a product that you purchase and write out a specification. Be specific and include components and peripherals. Take it a step further and write down how many and how often you purchase. Finally, what is the price you are currently paying for this product? Is that the same price you agreed to pay when at the beginning of the contract?

This exercise may seem basic, but this knowledge is a vital component of the procurement process. Here is a list of potential red flags that may mean it is time to research your products.

     1. All of your product data is in the form of a vendor invoice.
     2. You are uncertain of your order volumes or frequencies.
     3. You have been placing the exact same orders for years.
     4. Your pricing fluctuates often.

Be honest with yourself; is there room for improvement in product knowledge? I would encourage you to reach out to your strategic sourcing partner for suggestions. Aside from dollar savings results, you will also benefit from having a complete set of product specifications, vendor information and more at the completions of your strategic sourcing process. 

For more information on SafeSourcing and how we can assist with this process, please contact a Customer Service Representative for more information.

We look forward to and appreciate your comments.

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