Archive for the ‘Sourcing Strategy’ Category

Beyond price reduction, what other benefits should buyers be aware of when purchasing forklift batteries?

Thursday, August 4th, 2011

Not more than five years ago, warehouse managers were glad to have their scrap forklift batteries removed for free or a core charge refund.

Today warehouse managers have options due to regulatory changes and an increase in worldwide demand for lead.  This gives warehouse manager’s a couple of options for disposal.

One option is to sell it back to the manufacturer.  The customer sends scrap batteries back to the distributor for credits toward the purchase of new batteries.  This is recommended for a customer who will have loads under 44,000 lbs.   Unfortunately, the customer doesn’t get an additional revenue stream or directly profit from increasing lead charges.

A second option would be to sell it through a broker.  Brokers have bulk agreements with smelters and can pay a top price.  They will pay you based on a present Spot Market Pricing of Steel Cased Lead / Acid Battery Scrap and the Quantity of batteries that you want to get rid of.   Additionally, brokers educate the customer on packaging guidelines dictated by DOT.   This makes the implementation of a recycling program much easier. However, the option is only available for loads above a truckload (44,000 lbs.).  

Brokers are really only interested in Flooded Cell Batteries (these are the type of Batteries that have the removable tops where you add water).  They will however take Maintenance Free Batteries and even give you something for them. 

The markets are strong and should be for some time. So no matter which option you choose, now is a great time to start making money on those old batteries.  In fact, run a reverse auction for this and you will be sure that you get the best price for your scrap.

For more information on SafeSourcing and how we can assist your company with sourcing this category or any others, please contact a Customer Service Representative for more information.

We look forward to and appreciate your comments.

How do you successfully source an extremely specialized item?

Monday, July 25th, 2011

If you are a company that uses specialized items in order to produce your final product or service you should be asking yourself how does one successfully source a specialized item?? I am not referring to something that may be hard to find, but instead something that only one or two manufacturers readily provide.? For example, a battery to your specific piece of equipment may be manufactured specifically to run your product.? Therefore, it is not easily replaced with AAA or even a Li-ion standard.? It may seem like your current supplier is the only company and therefore has a monopoly over your business.? This situation puts the supplier in control of pricing and that is a dangerous stance to take from your shoes!

What this author has discovered is that in this situation, there are options!? Below are a few steps that you can take to get started in order to source your item effectively.

  1. Outline detailed specification of the item (s) that you want to source.? This should include as much specific detail as possible; the shape, size, weight, interior components.
  2. Outline, as detailed as possible, what the item is used for.? Is it the end product? Or is it a part that goes into the end product?? What function does the item hold?
  3. Know where you are currently getting the item, how many you are purchasing, and how much you are spending.
  4. Be prepared to have samples of your specialized item given to the manufacturer for testing reasons.? Also, set a realistic expectation for the samples to be returned to you for your own product testing.? You will need to know that a manufacturer is actually making a compatible and comparable product.

Once you?ve compiled all this information, you and your sourcing partner are armed with information to find other avenues to source this item.? This author?s recommendation is to start with the suppliers that are competitors of your current supplier.? Look into their equivalent products or find out if there are companies willing to manufacture your specialized item specifically for your needs.? This will help you broaden the marketplace for your specialized item and ultimately be able to source them to fit your needs and keep the focus on your bottom line.

For more information on SafeSourcing and sourcing your specialized items, please contact a Customer Service representative.

We look forward to and appreciate your comments.

How socially focused or responsible is your company.

Thursday, July 7th, 2011

Well if that’s the case why not apply for B Corporation certification. In essence this would be putting your money where your mouth is. At this point there are no real hard financial incentives for a company to do this. At least four states  have passed or proposed B Corp legislation, but it is pretty clear that all will in the future.

So just what is a B CORP? I’m glad you asked. If you visit the Certified B Corporation website you’ll learn that Certified B Corporations are a new type of corporation which uses the power of business to solve social and environmental problems.  B Corps are unlike traditional businesses because they:
        • Meet comprehensive and transparent social and environmental    performance standards;
        • Meet higher legal accountability standards;
        • Build business constituency for good business

SafeSourcing is going to add B Corporation certification to our database of supplier certifications and ask companies our customers’ partner with what their plans are to achieve B Corp Certification as part of their current or future CSR initiatives. We do the same for over 30 other certifications today such as Eco Logo, SQF and LEED.

If we do a small part and our customers do a small part and their suppliers do a small part, the parts will add up. Pay it forward and do your part.

We look forward to and appreciate your comments.

Ron Southard CEO SafeSourcing

Buyers; Soybeans are down and the Corn harvest will be up. So What?

Friday, July 1st, 2011

It appears as though the corn crops will be better than expected this year and as a result drive prices down on the supermarket shelves. The reason is because farmers planted more corn than usual based on what the futures market was telling them relative to other crops. Because they planted more and the yield will be higher futures actually went down. This should impact the price we pay for a variety of products impacted by corn.

If you don’t think that corn impacts many products, think again. Corn impacts beer, aspirin, livestock feed, carbonated beverages, Ethyl alcohol, textiles, soaps and hundreds of other products.

If you’re a buyer, you need to be aware of this as the impact in the market typically trails the crop by about 3 to 6 months. So while you are buying products you need to understand that costs should come down before year end and make sure the language in your contracts allows you to take advantage of this. Think de-escalator language on any contract between now and year end.

We look forward to and appreciate your comments.

Health Canada, a tool for buyers in Canada that costs little yet contains a lot.

Thursday, June 30th, 2011

In Canada, it’s as simple as visiting the Health Canada Website. According to Wikipedia Health Canada (French: Santé Canada) is the department of the government of Canada with responsibility for national public health. Here you can find news releases, speeches, media notices and research a variety of data related to health and food safety within Canada.

Just as yesterdays post  “Buyers; Do you need a great place to research product quality and recall issues” that talked about The U.S. Consumer Product Safety Commission  the Canadian Government has many tools that buyers can use that also cost nothing. You just have to spend a little time on their site.

Sometimes the best tools are the ones you don’t have to pay for.

We look forward to and appreciates your comments.

So you want to offshore or source from China or other Asia Pacific Countries.

Thursday, June 9th, 2011

We all know there are cultural differences when doing business or sourcing products from a foreign country. These differences go way beyond language capability or dialects of languages.

At a very high level, a buying agent is a person or a company that should understand the cultural issues and challenges associated with a target country down to the region or local level. Additionally they should understand where to locate sources of supply that can provide the specific goods and services required at competitive prices with favorable terms and conditions. Additionally a buying agent should be aware of logistical opportunities such as warehouse availability and local 3PL?s that will allow them use as a collection point for shipment flexibility for their customer.

As with all things if you do not have the internal expertise to source from a foreign country, find organizations that do and ask for references. One mistake can wipe out any potential savings and end up costing you much more.

We look forward to and appreciate your comments.

If you treat suppliers fairly and openly they will continue to participate in your strategic sourcing events.

Thursday, May 26th, 2011

We regularly conduct surveys as part of our SOP when we have completed an online e-RFX. These surveys are pivotal to ensuring that participants in our customer?s events were treated fairly. What our suppliers have told us makes events successful for them and would encourage them to participate again even if they did not happen to be the low bidder in a particular event is that this is an educational process for their company and ultimately becomes a way to do old things in a new way. To a company our suppliers encourage the following. Openly communicate with all suppliers and make sure they understand everything and are completely comfortable with specifications, terms and conditions, quoting instructions etc. Take the time to be complete even if they have participated in the past. Make sure they have no questions.
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Here is a sample list of questions that should be considered when inviting or encouraging suppliers as? participants.

1.?Does the supplier understand that there is no cost to them to participate?
2.?Do they understand they will be trained at know charge?
3.?Do they understand event timing and requirements?
4.?Does the supplier understand the terms being used and how they apply to a strategic sourcing event such as?
a.?Current Price
b.?Reserve Price
c.?Index Price
d.?Mixed price evaluation
e.?Low Quote
f.?Low quote indicator
g.?Last entry indicator
h.?Funds
i.?Terms
j.?Notes
k.?Extensions
l.?Matching quotes
m.?Event? rules
n.?Product specifications
o.?Samples
p.?Award of business

At the heart of it, this is common sense. Treat others as you would like to be treated. Unfortunately many companies don?t always follow this practice and as such, it negatively impacts the sustainability of their strategic sourcing program.

We look forward to and appreciate your comments.

Managing Your Workforce with Sourcing Processes

Tuesday, May 24th, 2011

The May issue of RetailSolutionsOnline.com has an article by Erin Harris about the shift that is occurring in the retail industry “from focusing on labor just as a cost center to viewing their labor pool as a valued asset to drive customer centricity.”

When you think about all of the elements that contribute to the employee life cycle, you begin to see many opportunities for creative sourcing that can allow a retailer to really get the most out of their workforce.  Today we will be looking at a few of these to better understand how they can be positively affected by a good sourcing strategy.

Recruiting – The process of recruiting employees is such an important first step in getting the right employees for your business.  With so many local, regional and national players in the recruiting space and because so many retailers have the recruiting process happening in different ways all over the company, this is a spend category that may initially begin as an RFP.   A quality RFP can not only help to understand the offerings of the vendors themselves but also to help you collect and understand what your own company is doing in this area.

Task Management – Some categories such as Task Management solutions are a little more focused and understanding the side-by-side features as well as how your company is handling the process is a little easier.  As a result, Task Management may a little easier sourced and is something that a strong competitive bid collection to compress the vendors’ pricing is all that is needed.  If it makes sense, this is a good path to follow because it allows you tighter, more competitive pricing, provides a detailed list of where these prices are coming from as well as a realization of savings and services that can start within weeks of the event.

Performance monitoring – One thing that is often overlooked in the process of improving the management of your workforce is the overseeing channel that monitors how you and your company and employees are doing.  Understanding the options for Customer Satisfaction monitoring and how they should be integrated into your WFM processes are important pieces to this puzzle.  These services can be sourced as many of the other items of your business are and should be part of how you evaluate how your associates are handling your customers.

Regardless of which pieces of the employee lifecycle you choose to address first in improving your workforce management, know that there are companies who can help you research and collect the information you need to make the most out of your selection decisions.

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.

Sourcing professionals are you strategic even if your company is not?

Friday, May 20th, 2011

There are quite a number of educational sites that procurement professionals can visit in order to educate themselves as to best practices (I hate that term), strategy development, execution management and reporting. Some companies refer to themselves as e-procurement companies, some as reverse auction companies and others as strategic sourcing companies. Most will have an outline as to their implementation ideas somewhere on their website. It might be in a WIKI, a blog archive or in a products and services tab. The point is you can probably find one pretty easily and most likely it is better than what your company already has in place.

Typically the proof is in the pudding, which is to say there are many tools out there, but the services delivery model and what it is based on will be what determines how strategic you become if you follow it. I like to break the tools and services into three areas which are;

1. Analyze
2. Assess
3. Source

These areas can then be expanded to support most strategic platforms tools and services.

If your company is not particularly strategic, it does not mean that you can’t be. Who knows, you might event get noticed.

We look forward to and appreciate your comments.

Choosing the Right Vendor to Reflect Your Company

Monday, March 28th, 2011

In a recent retail headline, Safeway, a California-based grocer with over 1,700 stores, announced their plan to have a channel of fresh and frozen seafood product that is sustainable and traceable, or in a process to reach that goal, by 2015.

It begs the question, “What are your vendors doing to better the planet in a way that goes beyond the products they deliver?  Are their values and Mission Statements mirroring what your business believes?”

In Safeway’s case, they had a strong company belief in sourcing product that came from sources that can maintain or increase production in the future without negatively affecting the environment with which it is coming from.  They also had a strong desire to be able to trace that product back to its source for safety reasons.  These values led them to select a partner who is helping them assure all of the companies they do business with also have these values and practice them in their business.

They are one of the first retailers to make a commitment of this magnitude with more expected to follow.

In order to ensure this same type of synergy between your company its sources, you should ask yourself:

• How much do I know about the core values of the companies I do business with?
• Do my vendors know anything about my company’s core values or Mission statement?
• Are my suppliers doing everything they can to provide safe and green products?
• Are there other suppliers I could be using that are making strides in this area that mirror the things my company wants to do?
• Are my RFI/RFP processes collecting this kind of information from the vendors?

To help you with answers to these questions or to provide you with a deeper pool of environmentally responsible companies with which to work with, please contact a SafeSourcing customer service representative today.

We look forward to and appreciate your comments.