Archive for the ‘Sourcing Safe Products’ Category

SafeSourcing Blog begins its third year!

Monday, May 10th, 2010

When we placed our first post on May 8th of 2008 our goal was to make the blog a piece of an educational website (www.safesourcing.com) for procurement professionals where they could meet, discuss and research and find information on topics of importance to procurement professionals and knowledge workers. We also wanted to call attention to the sourcing of safe products and environmentally sound procurement practices.

The traffic our blog enjoys supports the fact that procurement professionals find our post to be a useful part of their procurement tool belt. Since inception our post has been visited by professionals from eighty nine (89) countries. We are regularly visited by other procurement solution providers and from the best blogs in our space.

Our goal going forward is to continue to focus on the retail vertical and pass on useful information as our learning continues so that others may benefit.

Please tell others about us if you find our information useful. We certainly thank you for and appreciate your patronage.

Comments Welcome.

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.

Why some retail companies are not successful with e-negotiation programs or actually most programs they implement.

Friday, April 30th, 2010

Most companies understand that lowering their cost of goods and services provides the greatest potential benefit or impact to their bottom line. However they face significant roadblocks in doing. At this point, one might ask why some retail companies succeed while others continue to implement program after program with no ongoing measurable benefit. As mentioned in the excerpt above, the first among these is the recognition that effective e-negotiation initiatives like any other successful program requires strong support from executive management. This is important because Retail as an industry lags well behind other industries in utilization rates of e-negotiation tools. So at a minimum in order to get off on the right foot, this means the CEO, CFO, CLO or CPO sponsorship is critical and mostly the first two. Once this directive has been issued, the next step is to identify savings targets across all corporate spend categories. Once these targets are identified and ranked, a category specific attack plan can be developed that best maximizes savings opportunities.

It is important to note, that savings alone does not create a successful e-negotiation plan. What can not be sacrificed in the name of cost reduction are quality, safety improvement and environmental support programs that enforce your Corporate Social Responsibility (CSR) goals.
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A key challenge for any procurement organization directed to implement e-negotiation tools across all of their unique spend categories, is to not over complicate the process into something that you can?t maintain. At a high level, the following steps will insure that you are headed down the right path.

1.?Indentify business owners
2.?Identify all spend opportunities by owner
3.?Consolidate spends into a total corporate view
4.?Aggregate like categories
5.?Rank spend by category and owner
6.?Develop a total company strategy
7.?Research and Source additional qualified suppliers
8.?Collect detailed specifications
9.?Prioritize events based on spend and Importance
10.?Let your solution provider do their job
11.?Hold e-negotiation events
12.?Negotiate final terms
13.?Award of business
14.?Contract completion
15.?Results Analysis

Most quality e-procurement solution providers have well developed e-negotiation strategy and plan templates that will aid you in implementing your best implementation while maintaining quality and supporting your CSR initiatives.

We look forward to and appreciate your comments.

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.

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.

Here are twenty-one reasons why all retailers should use E-Procurement tools.

Tuesday, March 30th, 2010

Since this is not Late Night with David Letterman, our list is not ranked in order of importance although many might argue that not much is more important than improved earnings.

1.?Guaranteed to improve net earnings
2.?Guaranteed to improve safety
3.?Guaranteed to improve Corporate Social Responsibility.
4.?Guaranteed new sources of supply
5.?Retail has less spend assigned than any other industry
6.?Streamlines the? procurement process
7.?Holds suppliers accountable to your standards.
8.?Improves quality
9.?Cost avoidance in a volatile market
10.?Creates a competitive environment
11.?Drives reliable market pricing
12.?Maintains a reliable history for future comparison
13.?Educates suppliers as to how retailers wish to procure products
14.?Supplier training eliminates questions
15.?Improved and consistent product specifications
16.?Improved negotiation.
17.?Improve carbon footprint
18.?Simple award of business process
19.?Frees up time for other tasks
20.?Works for procurement of all product categories
21.?Provides a detailed audit trail.

This author is not sure why a derivative of this list could not become the mission statement for any procurement department.

We appreciate and look for ward to your comments.

Here are Ten Steps that procurement professionals can use to insure safer and more eco-friendly procurement.

Monday, March 29th, 2010

1. Be pro-active in driving product safety within your company and also supporting eco-standards in the procurement process that support your companies CSR initiatives.
2.?Pay it forward with all of your trading partners by sharing what you are doing, how you are doing it and asking them what they are doing to support yours or similar initiatives.
3.?Educate your employees and trading partners about common safety standards and guidelines such as the SQF Certificate www.sqfi.com? or ISO 22000.
4.?Educate your employees and trading partners about common eco-standards such as Green- Energy National Standard www.green-e.org or EcoLogo www.ecologo.org.?
5.?Point associates and trading partners to free educational websites such as www.safesourcing.com to use their free SafeSourcing Wiki or the Sourcebook professional social network for procurement professionals.
6.?Only use trading partners that follow your lead.
7.?Train your team to understand and use all available tools that insure supply chain safety such the free daily safety in sourcing blog at www.safesourcing.com? or the low cost SafeSourceIt Supplier Database and Reverse Auction Tools.
8.?Impose a system of measures and controls to monitor performance against clearly defined goals.
9.?Start at the top and engage all levels of your company.
10.?Measure your company?s progress with Triple Bottom Line Accounting or TBL.

We look forward to and appreciate you comments.

What does SafeSourcing do in the E-Procurement Space?

Friday, March 26th, 2010

Our SafeSourcing vision is to be the leader in knowledge driven retail e-procurement solutions that drive down costs and improve quality with an additional focus on safety.??? Beyond safety, we also focus on support of the environment which is a top of mind CSR issue within the retail executive suite.

By assigning as little as 10% of their cost of goods or expense related items to these tools a retailer can improve net earnings by up to 100% while also providing their consumers with safer products that support a reduction in the industries carbon footprint.

With SafeSourcing?s innovative e-procurement tools, a buyer can initiate reverse auctions or requests for information using the SafeSourceIt? e-procurement tools for new contract purchases, spot buys, replenishment, aggregation and collaboration with other buying organizations, saving as much as 30% to 40% in the process and then simply drop that data into our SafeContract? contract management solution to eliminate issues such as ever greening which costs the retail industry millions annually. Alerts can then be set that will remind procurement knowledge workers of required actions in the future as they arise.?

To support the above initiatives our SafeSourceIt?? global retail supplier database consisting of more than 380,000 suppliers contains thirty-five unique certification standards that are supported by our best practice initiatives such as GFSI, ISO 22000, Green Seal, ECO-LOGO, Fair Trade, SQF and Certified Humane Raised & Hand-Led to name a few. As our database continues to grow all SafeSourcing participating suppliers are regularly vetted for their support of ours and our retail partner?s socially responsible initiatives including their eco-friendly practices to insure continuity.

We look forward to and appreciate your comments.

What the heck is a food recall?

Monday, March 15th, 2010

According to Wikipedia?a ?product recall (in this case we are talking about food products) is a request (the key here is request) to return to the maker a batch or an entire production run of a product, usually due to the discovery of safety issues. In the case of foods and dependant on the type of food could be salmonella, e.coli or other contaminants that have resulted in food borne illnesses. The recall is an effort to limit liability for corporate negligence (which can cause costly legal penalties) and to improve or avoid damage to publicity. Recalls are costly to a company because they often entail replacing the recalled product or paying for damages caused in use, albeit possibly less costly than indirect cost following damages to brand name and reduced trust in the manufacturer. (author comments in red)

As an example of the above, the FDA recently recalled products that contained a potentially contaminated flavoring ingredient called hydrolyzed vegetable protein or (HVP). Last week as a result of the recall which grows daily a company recalled 1.7 million pounds of ready-to- eat beef taquito and chicken quesadilla products from a Houston based company. To date this FDA recall includes over 105 products.

How much of the products that are recalled are ever thrown out or returned for a refund is nearly impossible to measure. But this author is sure that of the 1.7 million pounds mentioned above, very little actually is returned and much of it has most likely already been consumed.

We look forward to and appreciate your comments.

Here?s some more on Food Safety, Salmonella and Traceability for e-procurement professionals.

Tuesday, March 9th, 2010

When the FDA refers to traceability today they are talking about one back one forward reporting. Does this make our supply chain safer?
The definition of traceability according to Wikipedia refers to the completeness of the information about every step in a process chain. Traceability is the ability to verify the history, location, or application of an item by means of documented recorded identification.

When the FDA uses this term what they are referring to is the capability of bidirectional traceability or tracing products one step back one step forward. This means identifying the immediate supplier of the product and identifying the immediate recipient of the product, which is not the final retailer.
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However the process also requires some level of common sense. I?m a man of faith, but blind faith really gets us no where when we are talking about food product traceability. GS1 has created a certification for traceability in cooperation with a number of organizations such as FMI, CIES and BASF.

From a common sense perspective one would believe that all products we consume are safe, that all produce and grain products are traced back to the seed level. Unfortunately this is not the case.

Let?s just examine milk products or byproducts. In a post from last year this author discussed a situation in China at the time where 13,000 babies were hospitalized and over 53,000 babies affected and that similar events could happen here. Well, yesterday we heard of HVP for the first time and the associated recall by the FDA. Traceability is really the only way that manufacturers and retailers and other members of the supply chain can maintain control of the ingredients in the products they produce or buy for resale.

As always we appreciate and look forward to your comments.