Archive for the ‘Sourcing Strategy’ Category

What are you doing with your overstock?

Thursday, February 3rd, 2011

A good way to help control and reduce retail shrinkage is to offer overstock items in the form of a forward auction.

Why is it that we never hear of retailers running forward auctions? There are dozens of sources waiting to buy your overstock which all retailers know will reduce shrink and improve bottom line profitability.

If you go to any internet search engine and type in the term overstock, the data returned is in the millions of pages. Many of these links are locations? for Business to Business (B2B) and Business to Consumer (B2C) companies that will gladly agree to participate in e-negotiation events in the form of a forward auction to purchase your overstock or liquidated products for resale through their on line offerings.

Online forward auctions are an ideal way to get the best price for capital equipment, materials, overstock and services you may want to sell, such as when you need to liquidate excess inventory. There are two basic types of forward auctions. The first is a liquidation auction where sellers are reducing inventory from overstock or liquidation and buyers are seeking to obtain the lowest price for items they have an interest in for resale and other purposes. The second type is more of a marketing auction where sellers are trying to sell unique items and buyers wish to obtain unique items. This is typical of an eBay type of offering.
Much of retail shrink happens in the back room or receiving area of retail stores. It just so happens that this is also the location of much of the overstock in the retail community. Much of this product sits there month after month resulting in significant margin hits to quarterly and annual earnings and as such to a company?s stock price.

Ask your e-negotiation solution provider how they can help reduce your overstock and shrink with forward auction tools, and who they would invite as buyers. You company stakeholders will applaud your efforts.

We look forward to and appreciate your comments.
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Your strategic sourcing plan should already be completed.

Monday, January 3rd, 2011

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 complete new sourcing strategy.

There is a specific process to follow that will encourage new sources of supply to want to bid for a companies 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 companies 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 companies business in a variety of categories. The fact is that additional sources of supply competing for a companies business results in compressed pricing and often better quality products.

We appreciate and look forward to your comments.

As you plan for the year ahead; here’s a little Sourcing Auld Lang Syne.

Tuesday, December 28th, 2010

 “Auld Lang Syne” is a Scottish poem written by Robert Burns in 1788 and then set to the tune of a traditional folk song. Roughly translated auld lang syne literally means old long since but can be paraphrased into statements such as long long ago, the olden days, for old time’s sake or the good old days.

However, pining to much for the old days can have a negative effect on your planning for the days, weeks and years ahead. I’m sure as this author has, many of you have heard sourcing individuals say things such as “we’ve always done things this way” or “that won’t work for us”. In today’s world with all of its economic and global pressures, this is particularly dangerous way of thinking for sourcing professionals. The good news is that we still have some time before the New Year and we should use it reflectively to build our resolutions for the upcoming year that should then drive our sourcing business goals.

Although a number of strategies can be used for this thinking for both individuals and groups. The most important thing is to capture the data in its most raw form and then refine it from there. This may occur in group open discussions and white board sessions with a moderator or in private free thinking session where you personally write down all of your own random thoughts. The important thing is to write them down. Statistically people who write down their goals have over an 80% higher success rate of achieving them. Research tells us that of those people that do make New Years Resolutions only 75% make it past the first week of the year and the numbers drop dramatically from there.

We will be discussing our thoughts on e-sourcing and e-procurement resolutions for the New Year over the next few days in order to provide our readers with a base from which to draw for their own refinement.

Best of luck with your goals and we  look forward to and appreciate your comments.

As you plan for the year ahead; here’s a little Sourcing Auld Lang Syne.

Tuesday, December 28th, 2010

?“Auld Lang Syne? is a Scottish poem written by Robert Burns in 1788 and then set to the tune of a traditional folk song. Roughly translated auld lang syne literally means old long since but can be paraphrased into statements such as long long ago, the olden days, for old time?s sake or the good old days.

However, pining to much for the old days can have a negative effect on your planning for the days, weeks and years ahead. I?m sure as this author has, many of you have heard sourcing individuals say things such as ?we?ve always done things this way? or ?that won?t work for us?. In today?s world with all of its economic and global pressures, this is particularly dangerous way of thinking for sourcing professionals. The good news is that we still have some time before the New Year and we should use it reflectively to build our resolutions for the upcoming year that should then drive our sourcing business goals.

Although a number of strategies can be used for this thinking for both individuals and groups. The most important thing is to capture the data in its most raw form and then refine it from there. This may occur in group open discussions and white board sessions with a moderator or in private free thinking session where you personally write down all of your own random thoughts. The important thing is to write them down. Statistically people who write down their goals have over an 80% higher success rate of achieving them. Research tells us that of those people that do make New Years Resolutions only 75% make it past the first week of the year and the numbers drop dramatically from there.

We will be discussing our thoughts on e-sourcing and e-procurement resolutions for the New Year over the next few days in order to provide our readers with a base from which to draw for their own refinement.

Best of luck with your goals and we? look forward to and appreciate your comments.

Do you want your sourcing to be more environmentally friendly in 2011?

Friday, December 24th, 2010

1. Be pro-active in driving not for resale and for resale product safety within your company, and also supporting eco-standards in the procurement process.
2. Pay it forward with all of your trading partners by sharing what you are doing, and asking what they do 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  and the Global Food Safety Initiative www.ciesnet.com.
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.

We  look forward to  and appreciate ayour comments.

Here is some more on BPA and S.510 Food Safety.

Wednesday, December 1st, 2010

With all of this ongoing activity, why don’t we  hear more about the Global Food Safety Initiative (GFSI) and Safe Quality Food (SQF) and other already defined initiatives?
 
The SQF program is owned and administered by FMI the Food Marketing Institute www.fmi.org at the request of its retail members. An FMI Advisory Board provides overall policy advice, guidance and direction to the SQF Institute
 
 SQF simply put means Safe Quality Food and is an initiative that has been under development for over ten years. This certificate program is a fully integrated food safety and quality management protocol designed specifically for the food industry. By achieving SQF certification, suppliers provide an external verification of their commitment to producing safe, quality food.

There are two certifications available from the SQF Institute. The first is the SQF 1000 Code which is designed specifically for primary producers. The second the SQF 2000 Code is more focused on the food manufacturing and distribution segments of the industry.
The intention of SQF is to utilize one industry program that meets the requirements and at the same time provides efficiencies for suppliers. SQF and the SQF 1000 and 2000 codes are recognized by the Global Food Safety Initiative GFSI as conforming to the highest of international standards.

SQF has been implemented by over 5000 companies operating around the world including Asia-Pacific, the Middle East, United States, Europe and South America.

To learn more about this important initiative, please visit www.sqfi.com.

We look forward to your comments and questions.

Are Reverse Auctions Strategic? YES THEY ARE!!!!!!!

Thursday, November 4th, 2010

What is strategic is entirely up to the person using the tool, whether or not they have used it before and if it returns the results they require as part of their strategic plan. So can a reverse auction be strategic. Of course it can. The overlying strategy might in fact be to simply get costs under control as quickly as possible. I shudder to think that this would be a company?s entire strategy, but in these times of economic survival it may well be. I can envision the following. The economy is kicking a companies ass and the CEO calls a? staff meeting and says we have a new strategy and for the time being everything else will take a back seat in order to get our costs down. Come back in a week and tell you how you are going to do this immediately.

Now for the English lesson.

The word strategy is a noun that has several definitions. According to Wiktionary, 2 of those are.

1.?A plan of action intended to accomplish a specific goal
2.?The art of using similar techniques in politics or business

The word strategic is an adjective which we know is a word that modifies a noun and can also me modified by an adverb. So think of strategic as meaning of and pertaining to strategy and can be used comparatively as in something that is more strategic or less strategic.

So can a reverse auction or auctions be strategic. Of course they can and one example would be if your strategy was to simply reduce costs immediately. They can also be more strategic as part of a going forward strategy as well as provide other strategic benefits such as cleaning up your specifications and reporting as well as providing new sources of supply.

We look forward to and appreciate your comments.

Creative green oriented education for procurement professionals to support your CSR goals.

Monday, October 4th, 2010

Using creativity to support your educational programs can be as easy as visiting good websites that provide thought leadership as to creative courseware that can be used for schools and other organizations.

At first some may seem a little basic for corporate America but as you drill into the detail the ideas and themes can be easily applied to general education overviews for your teams. Two interesting websites are.

1.?www.edutopia.org
2.?www.gogreeninitiative.org

Both of the above websites offer class oriented or field trip oriented initiatives that can be easily modified for adult audiences in order to provide interesting learning segments that support your companies CSR initiatives and programs.

At www.edutopia.org?? they have a really neat database that can be searched by going to the following site extension www.eduatopia.org/go-green .? You can filter a variety of searches by grade level such as classes for grades 9-12th. Don?t worry to much about the content level, because most kids at this age know more about living a green life than we do. As such, these curriculums can be easily modified to provide interesting learning segments for all associates.

At www.gogreeninitiative.org? there are lots of interesting factoids that can? be explored and expanded upon such as; ?For every ton of paper that is recycled, the following is saved: 7,000 gallons of water; 380 gallons of oil; and enough electricity to power an average house for six months.?? How many off you new that? How many of your store managers know that? When you do a trash hauling e-procurement event is recycling taken into account?

Being creative just takes a little time and research and helps to foster a learning organization and a learning organization is a growing organization.

We look forward to and appreciate your comments.

Before you comment about strategic sourcing!

Wednesday, September 29th, 2010

Recently Sourcing Innovation has carried a series of posts, comments and rebuttals as to whether strategic sourcing is alive or dead. This author also posted on the subject in a two part series titled Join the argument. Strategic Sourcing alive or dead? Part I of II on September 17th. And Join the argument. Strategic Sourcing alive or dead? Part II of II on September 20th.

As I read through much of the content in these posts I came to the conclusion that most solution providers comment are not seeing the forest for the trees. Officially strategic sourcing has been around as a sourcing term for 25 years. Unofficially it has been around as a process as long has man has been able to hunt and gather. Almost all searches on strategy will at some point refer to some from of military definition. That may unfortunately be a commentary on mankind. We can certainly agree however that from a military perspective we don’t need to look any further than Germany’s failure in the Ukraine during WWII to understand that not following ones own strategy can have disastrous effects.

Strategy is about understanding your subject area and all of the influence points associated with it. The question is; can we have a strategy without tools? The answer is yes. The key for solution providers is to develop and refine their tools so that they are easily usable by practitioners in order to carry out their strategy, goals and tactics which by their nature follow larger and more complex plans.

Let’s take a simple look at how we might be complicating things. From this authors perspective a strategic plan is made up of the following high level elements.

1. Strategy: Strategy is science or art and sometimes more of the later of combining and employing the means by which procurement can plan and direct supply chain improvement measured by level of operational efficiency and improvement.
2. Goals or Objectives: Goals or objectives fall directly from the strategy to drive a desired state or desired outcome of  persons or of  systems as set by the strategy
3. Tactics: Tactics are the conceptual action that drive goal fulfillment and are used by the procurement organization to achieve  specific goals or objectives

So simply it is not up to us to determine if strategic sourcing is dead or alive, it is up to the subject company that builds a strategic plan to makes sure they have a strategic procurement element of their plan that uses the best tools available to analyze and measure their results. And who are we to say that is not strategic.

We look forward to and appreciate your comments.

The economists say the recession has been over for more than a year.

Tuesday, September 28th, 2010

Finding new sources of supply has always been an issue. It may even be more important if your current suppliers can not provide what you need because they were forced to down size during recent economic woes.

This author has posted on numerous occasions relative to the importance of a robust retail supply chain and how retail companies might manage their relationships with current and new sources of supply. A significant part of the process is to have alternative sources of supply that you can rely upon. During last years H1N1 flu outbreak, The SafeSourceIt™ supplier database was able to provide multiple sources of surgical mask suppliers to a customer that had not been able to find them elsewhere for resale in their stores. Although this particular issue was caused by panic buying, it is still a supply and demand problem. The question this begs is are your suppliers capable of supplying your needs as demand increases? Did they reduce staff during the downturn? Have they been able to ramp up since then? Have their suppliers? 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.

The SafeSourceIt™ Retail Supplier Database contains over 380,000 vetted global suppliers that are certified in over 25 different areas.

We look forward to and appreciate your comments