Archive for the ‘Retail Supply Chain’ Category

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Was the recent e.coli settlement a supply chain problem?

Friday, May 14th, 2010

We have posted many time on the need for a traceable supply chain and the need for better due diligence throughout the procurement process including plant, farm and other source inspections. Keeping this data in a format that is searchable in the supplier vetting process is paramount to mitigating risk to consumers, suppliers, manufacturers and other areas of the supply chain is just to great without it.

Cargill Inc. which is a great agribusiness announced yesterday that they were responsible for the life shattering injuries suffered by Stephanie Smith by eating a contaminated burger in 2007. The parties agreed to settle the law suite and the terms were not disclosed beyond that Cargill agreed to cover her care for the rest of her life.

The debate on food safety continues and as it does drives the need for compliance at all levels of the supply chain from the farm to the table and the capability of tracing finished goods from the consumer to the source in order to. Without these tools issues like this will continue to happen.

We look forward to and appreciate your comments.

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What is the retail procurement lifecycle of a product or service?

Thursday, May 13th, 2010

This author generally begins discussing this subject with our customers and prospects during the discovery phase of our engagements. It helps to get us all on the same page and as such we get a lot of different definitions. Quite frankly we get almost as many as the number of people we discuss the subject with. Surprisingly the process which is quite simple as a definition is not any different from when I first learned it over 40 years ago in the U.S. Air Force other than its automation provided by modern procurement tools.

Typically procurement consists of seven (7) steps. Where the confusion generally enters is that each step can have a process of its own or be interrelated with another step in the process. An example would be the contract lifecycle that easily fits within the negotiation cycle and the renewal cycle. Another might be that information gathering which is the generally accepted first step in the process can apply to multiple issues such as information gathering for the related product or services such as specifications as well as the information gathering of prospective supplier data.

As such, the simple steps to the procurement lifecycle that most individuals generally agree upon are as follows.

1.?Information gathering
2.?Supplier contact
3.?Background review
4.?Negotiation
5.?Fulfillment
6.?Consumption
7.?Renewal

Most times keeping this simple model in mind will allow? retail procurement professionals to answer the question where are we in the process when a project gets stalled or off track.

We look forward to and appreciate your comments.

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Supplier management may be your most important issue during a time of economic recovery.

Wednesday, May 12th, 2010

In the Monday May 10th issue of USA TODAY the Money Section carried an article titled “Suppliers can?t meet demand” by Paul Davidson. The article went on to discuss that the economic rebound has been so robust that manufacturers are struggling so much with demand that it is causing huge bottlenecks in the supply chain. The article also went on to discuss that companies are reluctant to hire to meet the demand because they are not totally convinced that the current rebound will last.

The retail supply chain is something that this author has posted on dozens of times from the importance of a robust retail supply chain to how to manage your relationships with current and new sources of supply. A significant part of that is to have secondary and tertiary sources of supply that you can rely upon. By example, during the most recent H1N1 flu outbreak, Safesourcing was able to provide multiple sources of surgical mask suppliers to one of our customers that had not been able to find them elsewhere for sales in their stores. They did not know of these suppliers. They are also a very large company. Although this particular issue was caused by panic buying, it is still a supply and demand problem and correlates very well to the USA TODAY article. The message here is, don?t wait until a time of panic or increased prosperity to work and plan for spikes in the supply chain that may cause your customers pain.

Following are five Safesourcing blog posts from 2008 that should provide some good base reading on this subject.

1.?Is critical thinking in supplier selection a key to quality auctions? You bet!
2.?Supplier Open Communication. A key to high quality e-procurement events.
3.?Supplier-selection-this-may-be-the-most-important-decision-you-make
4.?What is retail supply base management?
5.?What is the benefit of a large retail supplier database and how do companies use the data to support growing their spend with reverse auctions?

The SafeSourceIt? Retail Supplier Database contains over 380,000 vetted suppliers.

We look forward to and appreciate your comments

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Safesourcing Inc. completes a successful year two.

Friday, May 7th, 2010

It hardly seems possible that we launched our company two years ago. At the time there were indicators for those paying attention of trouble in the global economy but know one had any idea just how bad it was going to get. In hindsight what a time to launch a company. When customers and business partners asked me why, my response was if you are doing what you believe in and the results you promise are true, then there really is no bad time to launch a business.

Our promise has been the same from day one, to reduce the cost of goods and services regardless of a company?s size or the size of the category being sourced. And, while doing so improve quality, safety and environmental focus. Today, two years later our customers will attest to the fact that we have held true to that promise.

Following is a short list of accomplishments that we are very proud of.

1.?Over 700 educational blog posts relative to e-procurement issues of importance.
2.?Over 1500 useful procurement related wiki terms and definitions.
3.?Added an average of more than one new customer for every month in business.
4.?Grew our supplier data base to greater than 380,000 retail suppliers
5.?Sourced 100?s of categories from commodities to finished goods and services.
6.?Sourced categories as small as $5K with savings > 30%.
7.?Sourced categories as high as $80M.
8.?Never held an e-negotiation event that did not result in savings.
9.?Conducted every process in e-procurement including RFI, RFP and RFQ.
10.?Installed our product in Asia in a multi lingual implementation.
11.?Averaged over 24% savings over two years.
12.?Developed a unique process for sourcing small spends for the retail mid market.
13.?Grew our database to over a terabyte of data.
14.?Helped companies source with environmental and social consciousness
15.?Today released SafeContract? a fully featured hosted Contract Management System.

To our customers thank you for your support. We endeavor to earn your business every day. To our business partners thank you for your guidance during a tough economic period. To the retail industry our goal is to be your best vehicle for reducing costs and improving earnings with an increased focus on corporate social responsibility.

Thank You.

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As a follow up yesterdays post, the next question was; what is the benefit of a large retail supplier database?

Thursday, May 6th, 2010

Retailers should have continuing success when running prior e-procurement events over again, one area of commonality that has historically made this difficult is a lack of new suppliers.

There is a proper way to insure the sustainability of your reverse auctions going forward.? Since you have already conducted or should have conducted your detailed discovery and analysis a robust retail supplier database will allow you to do the following.

1.?Conduct a detailed supplier discovery
a.?Rank suppliers
i.?Size
ii.?Experience
iii.?References
iv.?Environmental certifications
v.?Safety Certifications
2.?Develop a three year supplier game plan
a.?Develop a three year time line? for all categories
b.?Identify suppliers for each event over the three years
c.?Develop a three year rotation schedule for the selected suppliers.
3.?Role Play internally? each year for a test category
a.?Ask the following questions
i.?Who will you invite and why
ii.?Keep in mind the unique benefits of distributors and manufacturers
iii.?Discuss award the business strategies
iv.?Review alternate scenarios
v.?Review impact on non awarded suppliers
vi.?Determine which suppliers will be invited back
vii.?Determine what new suppliers from your database search will be invited next year

If you only have the same list you originally used to conduct your historical events, don?t expect savings the 2nd and 3rd time around if market conditions are similar. Or, you could call Safesourcing.

We look forward to and appreciate your comments.

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A Retailer partner asked me today how we built our retail supplier database SafeSourceIt?.

Wednesday, May 5th, 2010

The first part of the answer is that you have to be a student of the database industry to understand what may be available to you without having to do a lot of work. At the end of the day a database is a list albeit a sophisticated list with lots of tables and joins and other database features that allow for the combination and use of data.

As an example, when looking to build a retail supplier database there is certain information you require in order for the data to be believable. UDDI (Yu-di) is an open industry initiative, sponsored by the Organization for the Advancement of Structured Information Standards (OASIS), enabling businesses to publish service listings and discover each other and define how the services or software applications interact over the Internet. These service listings can take a number of different forms such as business registrations, for UDDI they are in the following formats.

1.?White Pages ? address, contact, and known identifiers;
2.?Yellow Pages ? industrial categorizations based on standard taxonomies;
3.?Green Pages ? technical information about services exposed by the business.

Combining these data which is readily available from a variety of sources provides a great start. From there the challenge to add other attributes that are important to you such as certifications, sic codes, detailed company descriptions, sales figures, products carried, experience, ratings etc.

This author has always believed that reinventing the wheel is? a misguided way to accomplish development initiatives and with all of the open source available on the market today and the cost of IT talent as high as it is we have to explore these alternatives to core development if time to market is a critical success factor.

So there you have it, my thinking and process for building our database. The next question is how we keep it fresh an updated. And that my friends are a trade secret.

We look forward to and appreciate your comments.

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A Retailer partner asked me today how we built our retail supplier database SafeSourceIt™.

Wednesday, May 5th, 2010

The first part of the answer is that you have to be a student of the database industry to understand what may be available to you without having to do a lot of work. At the end of the day a database is a list albeit a sophisticated list with lots of tables and joins and other database features that allow for the combination and use of data.

As an example, when looking to build a retail supplier database there is certain information you require in order for the data to be believable. UDDI (Yu-di) is an open industry initiative, sponsored by the Organization for the Advancement of Structured Information Standards (OASIS), enabling businesses to publish service listings and discover each other and define how the services or software applications interact over the Internet. These service listings can take a number of different forms such as business registrations, for UDDI they are in the following formats.

1. White Pages — address, contact, and known identifiers;
2. Yellow Pages — industrial categorizations based on standard taxonomies;
3. Green Pages — technical information about services exposed by the business.

Combining these data which is readily available from a variety of sources provides a great start. From there the challenge to add other attributes that are important to you such as certifications, sic codes, detailed company descriptions, sales figures, products carried, experience, ratings etc.

This author has always believed that reinventing the wheel is  a misguided way to accomplish development initiatives and with all of the open source available on the market today and the cost of IT talent as high as it is we have to explore these alternatives to core development if time to market is a critical success factor.

So there you have it, my thinking and process for building our database. The next question is how we keep it fresh an updated. And that my friends are a trade secret.

We look forward to and appreciate your comments.

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Hey retailers; how green are your suppliers? You can not manage something that you do not measure.

Tuesday, April 27th, 2010

When we think about safety and eco standards relative to our supplier partners, I honestly believe that retailers say quietly to themselves; how are we supposed to monitor this with everything else we have to deal with in procuring products?

This issue becomes more complex when you consider that data may be required from your organization relative to your existing suppliers, data from your supplier as to their own interpretation of their adherence and practice and finally other external data that neither organization may have.

Reflecting on safety, the question that retailers should ask all suppliers old or new 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 others? Another area to question should be regarding USDA and FDA inspection history.

Although Green Initiatives fall into the social consciousness area of a company, there are a variety of questions that can be asked in this area as well such as Green Seal, Eco-logo and Green Star certifications and participation in other partnerships that are environmentally focused.

A source that may make it easier for retailers would be to rely on their e-procurement solutions providers for this data if the provider has it included in their portfolio such as a supplier database. E-procurement specification templates can act as a form of scorecard for existing suppliers and potential news sources of supply if they are used as a repository for database queries relative to the above subject matter. This can become a type of automated RFI process which can save retailers a lot effort 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.

Can your e-procurement solutions provider provide these types of data on demand as a normal byproduct of your standard e-procurement process?

We look forward to and appreciate your comments.

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A procurement lesson! The CPSC issues Guidance on Repairing Homes with Problem Drywall from China.

Monday, April 5th, 2010

Last year I posted on offshore sourcing and the related problem of homes built with drywall from China. Now the CPSC has issued guidance as to what consumers should do. You can bet that this is not the end of this story. The first question I would be asking is who my contractor bought the drywall from in this country.

Inez Tenenbaum of the Consumer Product Safety Commission told the Associated Press, ?We want families to tear it all out and rebuild the interior of their homes, and they need to start this to get their lives started all over again.?

Below are some procurement recommendations:

1. Verify the name and address of the supplier or suppliers and their manufacturing addresses, phone numbers, email addresses and fax number. Conduct a cross-reference search of this information and the company name against other supply chain sites

2. Only deal with a company that has a specific company address and other professionally listed contact information.

3. Place multiple calls to the supplier at their provided contact numbers over a period of time and inquire about their company and the primary contacts. Ask for a management breakdown and to speak with at least two members of senior management.

4. Ask for references in the USA or another developed country that you will be doing business with.

5. Inform the supplier that you will be visiting their location for an office/factory tour. There are a number of third parties that can conduct a background checks on your behalf. These companies also have reference reports available. They are well worth the small associated cost.

6. Never agree to any up front payment without a sample or test of the products to be procured. These pre-shipment inspections are a must for any new supplier. You want to ensure that the goods are of adequate quality before placing or accepting any new products.

We look forward to and appreciate your comments.

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Part II of II. Is critical thinking in supplier selection a key to quality and sustainable retail reverse auctions?

Friday, April 2nd, 2010

Continuing from Part I of II Is critical thinking in supplier selection a key to quality and sustainable retail reverse auctions?

The following scenario offers one example as to how the careful management of your suppliers and a little strategic thinking can drive the type of results you desire as well as a long term sustainable process.

Suppliers will almost always not be of the same size. This does not mean however that they are not of the same quality. Smaller vendors that have accepted your invitation will most likely bid early during your event and then drop out after the early rounds. These suppliers will most likely not agree to participate in the future as they consider their chances of winning the business unrealistic. This too is manageable however back to our first premise. Suppliers that finish first or second or your incumbent that may have been replaced will in most cases agree to participate again, but? a lack of new competition will make the auctions less successful.

Thinking more strategically, an apparently logical question might be… If we only have six suppliers available how many should we invite to participate the first time and is more always better over the long run? Should we invite them all? Every company will answer this question differently. When considering the future, do we want successful early events or would we like a continual process improvement that drives continuous savings?

There are several possible solutions to consider. One scenario might be to only invite four participants to your first event. This will create a competitive environment for your reverse auction. After all it only takes two suppliers both interested in your business to drive quality results. Now back to our story. Let?s make the assumption that in twelve months or in the next purchasing cycle when you wish to repeat this auction that the two largest suppliers from the previous event agree to return. You could now invite supplier?s number five and six that were not included in the original auction. You have now created a competitive auction for the second year or purchasing cycle. An additional thought might be to not invite all of the largest suppliers to your first reverse auction, in order to manage the quality of your suppliers for future auctions. This type of critical thinking supports continual process improvement in e-procurement implementations.

We look forward to and appreciate your comments.

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