Archive for the ‘Sourcing Strategy’ Category

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Have you noticed the price of chocolate lately?  

Friday, February 16th, 2024

 

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

With it being close to Valentine’s Day you may have noticed when you were out shopping that the price of chocolate has risen.  It might as well everything else is going up why not one of favorite snacks.  The cost of the main ingredient, cocoa, has been rising upward over the past two years and over the past year it has more than doubled.  This month it broke an all-time record from back in 1977.  The prices are surging so high that even the biggest chocolate makers are struggling to make profits.  Last week Hershey Co. announced that they are cutting 5 percent of its workers because of the historic cocoa prices and inflation-weary consumers helped lower their fourth quarter earnings.  One of the reasons behind the significant increase is the climate issues in West Africa where more than 60 percent of the global production is produced.  According to experts’ cocoa futures have skyrocketed, not only have they doubled in the past year it has also gone up an additional 40 percent since January.  According to a senior food and beverage economist, the rising cost of cocoa has made retail chocolate prices rise about 17 percent over the last two years and it will only continue to rise.  One company that produces 4-ounce chocolate bars stated that the bars were selling to $4 in 2020 and is now up to $5 a bar.  They also noted that it is not just the cost of the chocolate but also the cost of sugar, cocoa butter, packaging, and labor costs.

If you need help sourcing ingredients for your company, feel free to contact SafeSourcing.   We can gather all the necessary information for you and help you decide which company and product 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.

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Does your organization implement eProcurement Solutions?

Thursday, February 15th, 2024

 

Today’s blog is by Margaret Stewart, Director of HR and Administration at SafeSourcing Inc.

In the fast-paced world of business, every dollar saved counts. Whether you’re a small startup or a multinational corporation, finding ways to cut costs without sacrificing quality is essential for long-term success. One area where significant savings can be realized is through efficient supply management. With the advent of technology, eProcurement has emerged as a game-changer in this regard, offering businesses a streamlined and cost-effective approach to purchasing supplies.

eProcurement (electronic procurement) is the process of purchasing goods and services electronically, typically through online platforms or software systems. Unlike traditional procurement methods that rely on manual processes such as paper-based purchase orders and invoices, eProcurement automates the entire procurement cycle, which can streamline to process and cut down significantly on time.

One of the primary advantages of eProcurement is its ability to drive cost savings. By leveraging online marketplaces, comparing prices, and negotiating discounts, businesses can secure better deals on their purchases. Additionally, eProcurement helps eliminate the overhead costs associated with manual processing, such as paper, printing, and labor, further reducing expenses.

eProcurement presents a compelling opportunity for businesses to achieve significant cost savings and efficiency gains in supply management. By embracing technology, streamlining processes, and leveraging data-driven insights, organizations can optimize their procurement practices and position themselves for long-term success in today’s competitive landscape.

Through strategic implementation and continuous improvement, businesses can harness the power of eProcurement to drive savings, enhance operational efficiency, and unlock new opportunities for growth and innovation.

For more information on eProcurement and how the SafeSourcing team can get you started, or on our Risk-Free trial program, please contact a SafeSourcing Customer Service representative. We have an entire team ready to assist you today.

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Is the inclusion of freight in an e- bid or reverse auction equal to the net landed cost?

Wednesday, February 14th, 2024

 

Todays post is from the SafeSourcing Archives.

Sourcing freight lanes or shipping lanes is a project all its own. A shipping lane simply put is the general movement of products between two areas. The first is the departure area and the other is the arrival area. This gets more complicated when we start to discuss full loads versus less than full loads and haul back opportunities that accomplish the optimum in a transportation cost model.

When you structure your e-bid simply asking for a net landed cost or assuming that means free freight or free freight within a certain radius of the origination point,  is just not that easily accomplished.

If you really want to understand your net landed cost, then you should have line items in your event that are specific, measurable and bid on separately. When a company says they want a net landed cost what they are referring to is the cost of a product or products plus all of the relevant logistics costs, such as transportation, warehousing, handling etc. In other words, what’s my cost when it gets here or where we want it?

If you want to drive the best pricing and service possible you need to understand what you are asking for and make sure it is clear in your specifications and terms and conditions.

We look forward to and appreciate your comments.

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Why use SafeSourcing versus other providers in the Procurement Space?

Thursday, February 1st, 2024

 

Today’s post is from a collection of data and other tools that SafeSourcing’s CEO Ronald D. Southard uses regularly in the pursuit of fresh content.

  1. Cost Savings: SafeSourcing can help businesses achieve cost savings through strategic sourcing and negotiation processes. By leveraging their expertise and technology, they will assist in obtaining better prices from suppliers than you can.
  2. Efficiency in Procurement: SafeSourcing offers tools and platforms that streamline the procurement process, making it more efficient and reducing the time and resources required for sourcing all categories of goods and services.
  3. Supplier Relationship Management: SafeSourcing might provide services to help businesses manage relationships with their suppliers effectively. This can include monitoring performance, addressing issues, and fostering collaborative partnerships.
  4. Risk Mitigation: The company may have tools and processes in place to assess and mitigate risks associated with the procurement process. This could include evaluating supplier reliability, compliance, and other factors that may impact business operations.
  5. Access to a Network of Suppliers: SafeSourcing could offer access to a wide network of pre-vetted suppliers in their SafeSourceIt™ Supplier Database. This can be particularly beneficial for businesses looking to expand their supplier base or enter into new markets.
  6. Technology Integration: If SafeSourcing utilizes advanced technologies, businesses may benefit from the integration of these tools into their procurement processes. This could include e-sourcing platforms, analytics, and other technological solutions embedded in the SafeSourceIt™ family of solutions.
  7. Compliance Support: SafeSourcing through regularly sourcing hundreds of categories may assist businesses in ensuring that their procurement practices comply with relevant or evolving regulations and industry standards. This can be crucial for avoiding legal issues and maintaining a positive corporate image.
  8. Customized Solutions: The company may tailor its managed services to meet the specific needs of individual businesses. This personalized approach can be advantageous in addressing unique challenges and optimizing the procurement process.

To learn more please contact a SafeSourcing Customer Services Representative.

 

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What should be considered when purchasing vehicles personally or for your fleet?

Monday, January 22nd, 2024

 

 

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

If you have been paying attention to news lately there has been a lot of talk about electric vehicles.  Recently the rental company Hertz announced that they are dumping EVs including Tesla’s for gas cars.  According to the news they are selling about 20,000 electric vehicles from its U.S. fleet citing higher expenses related to collision and damage.  Another article appeared recently that stated that due to the current cold temperatures around the United States that the public charging stations have turned into vehicle graveyards over the past couple of days.  Owners are stating that they have been trying to charge the cars for days with no success and have had to borrow vehicles or get rides to their destinations.  One of the workers jokingly stated, “We got a bunch of dead robots out here.”  If you are looking into buying a new vehicle and have considered EVs or hybrids, please read the BLOG below that I wrote a few months back.

If you are in the market for a new vehicle and have been paying attention to gas prices lately you may want to look into an electric or a hybrid.  If you want to stay on the cheaper side you may want to consider the hybrid over the fully electric because they seem to be better value at this time.  A hybrid vehicle can save you on gas because they can get over thirty-five miles per gallon compared to a standard gasoline engine vehicle, which is about a forty percent improvement.  This is done by combining an electric motor with a gasoline engine.   When driving, the vehicle can switch between the electric motor and the gas motor and during some conditions both are used simultaneously.  This results in less gas being used, which gives you a better fuel economy than vehicles that just have a gasoline motor.  The electricity used comes from a high voltage battery pack and does not have to be plugged in to charge because the charging occurs by the gas engine and by capturing energy from deceleration.  Therefor when making long trips you do not have to plan out where you may have to stop to charge the battery unlike a full electric vehicle.  Below are some of the advantages of hybrid vehicles.

  • Lower Fuel Costs
  • Immediate Torque
  • Tax Incentives
  • Lower Emissions
  • Possible Use of HOV Lanes
  • Lack of Idling
  • Value Retention
  • Dependability

If you need help finding new vehicles for your company, feel free to contact SafeSourcing.   We can gather all the necessary information for you and help you decide which product 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.

 

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Why increased profitability continues to evade the middle market retailers.

Friday, January 5th, 2024

 

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

I wrote this post 14 years ago and it’s still true today.

There are two primary sources of objections that continue to halt the use of these profit enhancing tools in the retail middle markets particularly c-stores and regional supermarket chains.

The first source is your own buyers or category managers. For some, it is the false belief that these tools will eliminate their jobs. For others, it is the thought that in rising markets, buyers tend to be conservative in the hopes that their suppliers will continue to honor old contracts and delay price increases. Neither assumption is true. E-procurement tools make a buyer’s job easier as they can do more in less time such as working with dozens of suppliers versus only the same few. Honoring old contracts almost never happens. Ever-greening of contracts is a huge problem in retail where the lack of sophisticated contract management systems that can provide automatic alerts results in hundreds of contracts auto renewing at predetermined price increases. This results in huge cost increases to retailers that were not planned for. This is all the more reason to be thinking about your spend months before contracts expire even if it only results in cost avoidance.

The second area where you can expect pushback is from your incumbent suppliers or wholesale distributors. If you have never participated in the setup of a reverse auction and most middle market retailers have not, that initial call to your suppliers to ask them to participate in a reverse auction event is always an interesting journey. Be prepared for all of the reasons in the world why you should not waste your time on this type of process. The more forceful the pushback the more likely you are to see savings that you should have seen earlier. As such, although suppliers may b well aware of or even using these technologies to reduce their costs, middle tier retailers have not able to share in these savings to the extent they should.

If middle market senior executives lead the charge and cost and the availability of new sources of supply is no longer an issue, there is no reason middle market retailers should not benefit greatly from running online bids or RFQ’s.

If you’d like a risk-free trial, please contact SafeSourcing.

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Happy New Year 2024. This year’s strategic sourcing plan should already be in place

Wednesday, January 3rd, 2024

 

What specific short-term tactics will you deploy that support your plan and drive immediate and measurable results.

One example of the above might be to augment the manual processes that many sourcing professionals use today in order to find new sources of supply interested in bidding for their business rather than continuing to live with the same small, known group of suppliers they have used for years. Historically this has been a very time-consuming practice that results in few if any new sources of supply. This represents a great opportunity to deploy a tactic that can have an immediate impact for an organization without the need for the implementation of a completely new sourcing strategy.

There is a specific process to follow that will encourage new sources of supply to want to bid for a company’s business beyond just being invited. Simply having your buyer assigned the task of picking up the phone and calling new sources of supply will not result in new suppliers agreeing to bid for your business. There are specific objections to overcome and questions to answer that require a specific skill set.  This is a perfect opportunity for Software as a Service providers that offer supplier research. Skilled providers in this area can provide companies with as many as a half dozen or more willing new sources of supply in as little as thirty minutes that may in fact reside within a company’s existing marketing area.

Sourcing tactics can be isolated procurement related actions or events that take advantage of opportunities offered by the gaps within strategic plans such as lack of new sources of supply mentioned above.  So, our tactic here would be to find additional sources of supply that we can invite to compete for a company’s business in a variety of categories. The fact is that additional sources of supply competing for a company’s business results in compressed pricing and often better-quality products.

We appreciate and look forward to your comments.

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HAPPY NEW YEAR 2024 from SafeSourcing; Your GLOBAL SOURCING PARTNER!

Monday, January 1st, 2024

 

picture of world

 

If you’d like to learn more about alternative sources of supply offshore or nearshore or anywhere around the world., contact a SafeSourcing customer services account manager to learn more about SafeSourceIt™ our 587,000 global supplier database and let us translate it into increased profits for you.

We look forward to and appreciate your comments.

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Offshore, Nearshore, No Shore.

Thursday, December 28th, 2023

 

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

You might be surprised that during the last year the US increased import of Mexican manufactured goods by nearly 60% according to an article titled Global Trade is Shifting, Not Reversing in a January 3rd issue of the Wall Street Journal by Stephen Wilmot. I wonder how much of that even had to be put on a ship, hmmm? No child labor, hmmm? Quicker delivery times, hmmm? Here’s to North America!

Now, a simple question for all companies that are interested, is how do you find these manufacturers and other suppliers and distributors in North American (US, Mexico, Canada)? The simple answer is to contact SafeSourcing and ask about our  SafeSourceIt™ Global Supplier Database  that includes over 557,000 global vendor/suppliers.

To learn more, please contact a SafeSourcing customer services associate.

References: Wall Street Journal, Stephen Wilmot

 

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So, what happens with the evolution of Artificial Intelligence, Quantum Computing and Crypto?

Wednesday, December 20th, 2023

 

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

Do you need Artificial Intelligence (Ai) to write your business plans for you, or Quantum Computing to come up with your next strategic plan? Will you report your earnings in Crypto like Bitcoin (BTC) or Satoshi instead of dollars?

As we close out 2023, these are some of the questions I ponder as everything in our world evolves at greater than the speed of light. Who knows, maybe I’m strange, but this is a fascinating time to be alive.

I can’t just do my job of running our managed service eProcurement Company SafeSourcing without considering these things. Just imagine when Quantum computing and Ai come together to provide you will all the questions you haven’t asked almost before you think of them. The speed of an Ai layer at quantum speed might just be able to do that. Assume you ask your Ai interface a very logical question on a thought process you are having regarding your product and or process evolution and the Ai interface provides you a very detailed answer and then presupposes your next question and answers it and so on.

If you are a leadership person with the responsibility of maintaining your company’s viability, you have to think how these evolving technologies will impact how you do business. If you don’t you won’t be here.

Here are a few questions that might let you know if you are keeping pace.

  1. What is digital gold?
  2. Who is Satoshi Nakamoto?
  3. What is Satoshi?
  4. What is a Qubit?
  5. How does a Qubit work?
  6. What is the fastest Qunatum computer in the world?
  7. What companies and countries are focused on Quantum computing
  8. Does the Macro financial world impact Crypto in the same way it does the stock market?
  9. What is the temperature of a quantum computer?
  10. How long does it take to settle an international transaction with Bitcoin (BTC)?
  11. How safe will data be at quantum speeds?

If you know all of the answers, congratulations. At SafeSourcing we are looking at all of these technologies so that we continue to be the best provider of eProcurement solutions for our customers.

SafeSourcing is a Procure to Pay Managed Service provider of a number of e-Procurement solutions and associated white glove services that are part of our cloud based SafeSourceIt™ eSourcing suite.

For more information, please contact a SafeSourcing Customer Services Associate.

 

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