Archive for the ‘Sourcing Strategy’ Category

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Retail e-procurement. What about your existing relationships.

Friday, February 26th, 2010

I could not agree more with the above comment. So beyond just reducing their prices which should not happen if you are being treated fairly, how else do suppliers benefit from participation in e-procurement events such as reverse auctions so that it is win-win?

Customers quite often ask us why suppliers would want to participate in an e-procurement event. A discussion usually follows relative to incumbent suppliers vs. new sources of supply. In general most vendors in the space would come up with many of the same points listed below. Please read on.

SafeSourcing? places a great deal of value in our SafeSourceIt??? Global Retail Supplier Database? which contains over 350,000? retail suppliers located in Mexico, Canada the United States, China, Korea, The United Kingdom, Japan and other countries. We place a great deal of value on each individual supplier regardless of their size. We believe that well thought out next generation e-procurement tools can provide significant benefits to buyers and suppliers whether they are hosting or participating in e-procurement events.?

Some but certainly not all benefits that suppliers can anticipate from SafeSourcing are:
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1. An easy to use e-procurement tool limited to a single page view where a supplier can be completely comfortable that their company?s best foot is being put forward to the soliciting company.

2. An increase in new business opportunities through engagements they would otherwise not be exposed to.

3. Clean data relative to the soliciting or host company and an accurate listing of their event guidelines, specifications, terms, conditions and other information necessary to build an accurate and successful pricing strategy.

4. High quality training in event participation and strategy development.

5. A clear focus on what?s important beyond price in next generation e-procurement tools such as supplier safety certifications and practices as well as their environmental programs that will differentiate them from other suppliers.

6. Closed loop reporting of results of the specific e-procurement event a supplier participates in as well as a detailed supplier feedback questionnaire..

7. Significant time savings associated with new business development that becomes more and more costly as fuel and other prices continue to rise.

8. Industry pricing trends extrapolated from their view of low quote information during the event if allowed by the soliciting company.

9. Use of these tools for their own procurement needs.

I?m sure many of you can come up with other reasons. E-procurement events have to be win-win if they are going to become part of a retail companies on going business processes.

We look forward to and appreciate your comments.

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Just what is a collaborative supply chain or for that matter collaboration in general as it applies to procurement.

Thursday, February 25th, 2010

We often hear the term collaboration or collaborative partners, collaborative supply chains, collaborative commerce or? collaborative networks when we are discussing the supply chain. It rolls of everyone?s tongue like we all know what we are talking about. So this author took a look at Wikipedia hoping to gain some insight and clarity.

?According to Wikipedia, Collaboration is a recursive process where two or more people or organizations work together toward an intersection of common goals, and
An aggregate is a collection of items that are gathered together to form a total quantity.

Since collaboration only means different groups or organizations working together towards the same goal, that term can apply to just about any business function. However when we combine it with the word aggregate to form the collective e- procurement term Collaborative Aggregation which was coined by this author in 2006; we arrive at something potentially meaningful.

Collective buying organizations and sometimes share groups often combine purchasing volumes of like products to drive better discounts. Large companies often aggregate their purchases among departments and are more often today doing the same thing across different operating group?s or companies within a larger organizations to drive economy of scale in purchasing.

The unfortunate truth, is that not much out of the box thinking is going on in this process. We are so involved in the process that we can not see the forest for the trees.

Let?s take a look at a small regional retail chain as an example. They buy their products mostly from wholesalers who are able to aggregate the volumes of many in order to earn enough discounts to pass on reasonable pricing to the retailer that is slightly better than the retailer might earn on their own, and reserve a little for themselves in order to support their business. These products are normally for resale products. In the not for resale area or expenses category such as supplies and services, the regional retailer usually does business with a number of local suppliers. The supplies can include everything from cleaning fluids to paper bags. The supplier normally does good job of managing these products against a number different cost structures to maintain a customer margin that is good for them. As an example if the price of oil is up and the resin market high, the supplier might be making less on plastic products such as plastic shopping bags or t-sacks, soup containers, trash can liners etc. The supplier may however also carry paper products and other supplies that can be mixed together to drive a total customer margin. Retailers can do the same thing. Here?s a partial list of how collaborative aggregation can work.

1.?Take a good look at the total list of supplies offered from your primary supplier.
2.?Compare that to what you are buying from them.
3.?Ask your e-procurement provider for a list of suppliers within a 50 mile radius that can provide the same products or some of the same products.
4.?Look at local businesses within a five mile radius of your area that are not in your industry but buy some of the same products such as trash can liners, cleaning fluids, paper products etc.
5.?Call them and explain how collaborating might save you both money.
6.?Ask for the name of their supplier as they might be different from yours.
7.?Determine a test group of products to request bids on.

Safesourcing has a best practices program for this type of collaborative aggregation that is included in our event fees. For a complete list or more information please contact us at www.safesourcing.com.

We appreciate and look forward to your comments

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Quality retail e-negotiation in a time of heightened Corporate Social Responsibility (CSR)

Friday, February 12th, 2010

Why do some companies succeed while others continue to implement program after program with no measurable benefit. First among these is the recognition that effective e-negotiation initiatives like any successful program requires strong support from the executive suite. In Retail this is important because the industry lags well behind other industries in utilization rates of e-negotiation tools. At a minimum in order to get off on the right foot, this means the involvement and sponsorship of your CEO, CFO, CLO or CPO is critical. Once you have this involvement directives can be issued. This will help in the required next step which 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 do not create a successful e-negotiation plan. What can not be sacrificed in the name of cost reduction is quality, which can include safety as well as Corporate Social Responsibility (CSR) goals including environmental support programs.
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A key challenge for any procurement team directed to implement e-negotiation tools across all of their unique spend categories, is to not over complicate the process into something that can?t be maintained. At a high level, the following 10 steps which are in no particular order offer some assurance that you are headed down the right path.

1.?Identify and rank all opportunities by spend
2.?Locate all contracts and identify termination language
3.?Document your safety and environmental goals
4.?Develop a total company strategy
5.?Source qualified suppliers
6.?Identified fragmented or maverick purchasing and aggregate
7.?Negotiate final terms and conditions
8.?Award of business
9.?Contract completion including review of evergreen and termination language
10.?Results Analysis

Most quality e-negotiation? solution providers have well developed and well thought out plans that will aid you in developing and implementing your best practices while maintaining quality and supporting your CSR initiatives.

We look forward to and appreciate your comments.

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Giving it your best is more than a practice.

Friday, February 5th, 2010

Best practices only become best practices through a thoughtful paying forward of one?s careers learning to others in order to shorten their educational curve to the ultimate benefit of customers, partners and other stakeholders they may interface with in the hope that they will do the same thing.

According to Wikipedia a best practice asserts that there is a technique, method, process, activity, incentive or reward that is more effective at delivering a particular outcome than any other technique, method, process, etc.

When a company indicates to you that they use best practices, does this mean they are supporting what is the best practice for the entire industry they serve such as the procurement space. Or does it mean they are the best practices for just their particular product family?

This author does not believe that a best practice is just following a standard way of doing things that can be carried out by multiple organizations. A best practice is a life long process that by its nature has to evolve over time as tools, businesses, and existing processes change so that a current practitioner performs similar tasks more efficiently or cost effectively.

If one uses best practices, the result should?be an ideal state that a person or an organization set out to achieve in the first place. In fact if the process used is actually a best practice shouldn?t all of a companies customers use exactly the same process. I?m not sure that this is ever a question one asks when looking for a referral about a companies service offerings. Please tell me about your companies? best practice? Are they consistent and carried out each and every time to the desired result?

One way to ensure good quality results is to provide templates that can be used over and over again and are evaluated at the completion of each practice or session of a particular deliverable and changed as need be. This then requires passage to other customers in order to insure the integrity of the process. This elevates the actual process beyond just a buzzword and moves a particular process in the direction of becoming a best practice that drives similar results on a consistent basis regardless of customer.

This author will continue to refer to our services offerings as high quality process techniques focused on continuous improvement that deliver anticipated results. Our customers, supplier participants and business partners will determine if they are best practices for them.

We look forward to and appreaciate your comments.

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What is Green-e certification? Does your company?s CSR program mandate the purchase of renewable energy products?

Friday, January 8th, 2010

For over ten years, the nonprofit Center for Resources (CRS) has developed and implemented consumer-protection standards for the voluntary renewable energy market through the Green-e program.

What is Green-e? Green-e is the nation’s leading independent consumer protection program for the sale of renewable energy and greenhouse gas reductions in the retail market. Green-e offers certification and verification of renewable energy and greenhouse gas mitigation products. It is a program of the Center for Resource Solutions.
Green-e Energy certifies renewable energy products sold to residential, commercial, industrial and wholesale customers. Certification services are available to all companies selling renewable energy. The process to get a renewable energy product certified varies depending on the type of product seeking certification, based on the following two categories of companies offering renewable energy products.

Ask your procurement solutions provider if they can tell you what companies carry this certification. SafeSourcing can.

We look forward to and appreciate your comments.

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What is Green-e certification? Does your company’s CSR program mandate the purchase of renewable energy products?

Friday, January 8th, 2010

For over ten years, the nonprofit Center for Resources (CRS) has developed and implemented consumer-protection standards for the voluntary renewable energy market through the Green-e program.

What is Green-e? Green-e is the nation’s leading independent consumer protection program for the sale of renewable energy and greenhouse gas reductions in the retail market. Green-e offers certification and verification of renewable energy and greenhouse gas mitigation products. It is a program of the Center for Resource Solutions.
Green-e Energy certifies renewable energy products sold to residential, commercial, industrial and wholesale customers. Certification services are available to all companies selling renewable energy. The process to get a renewable energy product certified varies depending on the type of product seeking certification, based on the following two categories of companies offering renewable energy products.

Ask your procurement solutions provider if they can tell you what companies carry this certification. SafeSourcing can.

We look forward to and appreciate your comments.

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E-sourcing and e-procurement Auld Lang Syne.

Monday, December 28th, 2009

?“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.

We look forward to and appreciate your comments.

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Creating small business networks and collaborating creatively to gain competitive advantage.

Tuesday, December 22nd, 2009

We often hear the term collaboration or collaborative partners or networks when we are discussing the supply chain. It rolls of everyone?s tongue like we all know what we are talking about. So this author took a look at Wikipedia hoping to gain some insight and clarity. According to Wikipedia, Collaboration is a recursive process where two or more people or organizations work together toward an intersection of common goals, and
An aggregate is a collection of items that are gathered together to form a total quantity.

Since collaboration only means different groups or organizations working together towards the same goal, that term can apply to just about any business function. However when we combine it with the word aggregate to form the collective e- procurement term Collaborative Aggregation which was coined by this author in 2006; we arrive at something potentially meaningful.

Collective buying organizations and sometimes share groups often combine purchasing volumes of like products to drive better discounts. Large companies often aggregate their purchases among departments and are more often today doing the same thing across different operating group?s or companies within a larger organizations to drive economy of scale in purchasing.

The unfortunate truth, is that not much out of the box thinking is going on in this process. We are so involved in the process that we can not see the forest for the trees.

Let?s take a look at a small regional supermarket chain as an example. They buy their products mostly from wholesalers who are able to aggregate the volumes of many in order to earn enough discounts to pass on reasonable pricing to the retailer that is slightly better than the retailer might earn on their own, and reserve a little for themselves in order to support their business. These products are normally for resale products. In the not for resale area or supplies, the regional retailer usually does business with local suppliers for a variety of supplies that can include everything from cleaning fluids to paper bags. The supplier normally does good job of managing these products against a number different cost structures to maintain a customer margin that is good for them. As an example if the price of oil is up and the resin market high, the supplier might be making less on plastic products such as plastic shopping bags or t-sacks, soup containers, trash can liners etc. The supplier may however also carry paper products and other supplies that can be mixed together to drive a total customer margin. Retailers can do the same thing. Here?s a partial list of how collaborative aggregation can work.

1.?Take a good look at the total list of supplies offered from your primary supplier.
2.?Compare that to what you are buying from them.
3.?Ask your e-procurement provider for a list of suppliers within a 50 mile radius that can provide the same products or some of the same products.
4.?Look at local businesses within a five mile radius of your area that are not in your industry but buy some of the same products such as trash can liners, cleaning fluids, paper products etc.
5.?Call them and explain how collaborating might save you both money.
6.?Ask for the name of their supplier as they might be different from yours.
7.?Determine a test group of products to request bids on.
We appreciate and look forward to your comments

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Sourcing; a Musical! We can source anything better than you can.

Friday, November 20th, 2009

Ok, so it?s another wacky Friday. Maybe this post should have come out last week on the 13th. As you read this keep in mind the old ANNIE OAKLEY FRANK BUTLER and Chorus song that many of us sang as children of anything you can do I can do better. Below is a version I would sing loud and sing proud to any of our competitors.

Anything you can source,
we can source better.
We can source anything
Better than you.

No, you can’t.
Yes, We can. No, you can’t.
Yes, We can. No, you can’t.
Yes, We can.
Yes, we can!

Anything you can buy
we can by cheaper.
Sooner not later
we?ll be sourcing cheaper than you.

No, you can?t. Yes, We do.
No, you won?t. Yes, we will.
No, you can?t! Yes, we do
yes, we are!

We can locate many more qualified suppliers
with a single mouse click.
We can locate new sources
with our supplier query tool.
As a result
We can drive lower savings than you.

Anything you can buy
we can buy cheaper.
We can buy anything
cheaper than you.

Pricing just fell Fifty cents?
Forty cents! Thirty cents?
Twenty!
No, they didn?t!
Yes, they did,
Yes, they did!

Any spec that you have
we have more tenfold.
So we can source anything
easier than you.

No, you can’t. (Softly)
Yes, We can. (LOUDER) No, you can’t. (Softer)
Yes, We can. (LOUDER) No, you can’t. (Softer)
Yes, WE do. (Full volume)

We are just much better than you

No, you?re not.
Yes, we are No, you aren?t.
Yes, we are No, you aren’t.
Yes, we are
Yes, WEEEEEEEEEEEEEEEEEEE are. No, you?re CA-A-A-A-A-A-A-A-A-A-A-N’T
CA-A-A-A-N!
Yes, you ca-a-a-an!

We win. Yes you do! Yes you do! Yes you do!

We look forward to and appreciate your comments if you can.

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SafeSourcing Website experiences significant traffic growth.

Thursday, October 22nd, 2009

During the last ninety day period the SafeSourcing website www.safesourcing.com has experienced significant growth globally. According to a number of rating services including Alexa and Google Analytics our website has had visitors from thirty seven (37) countries. Our reach which is a percentage measure of global internet users has grown 130%. Our traffic rank has increased 168% and our page views have increased 150%.

This growth places us amongst the top websites in the procurement space. Spend Matters and Sourcing Innovation continue to be the ranking leaders in our space. Both are required daily reading for this author.

We are very proud of our growth as it indicates that SafeSourcing is providing valuable content to regular visitors as well as registered members. We are also enjoying a good mix of both returning and new users. In reviewing these data the entire website is being explored on a regular basis including the following areas.

1. Sourcebook our professional social network for procurement professionals.
2. The SafeSourcing Wiki
3. The SafeSourcing daily Blog
4. SafeSourcing environment and safety alerts
5. SafeSourcing specifications template library
6. The SafeSourceIt? Supplier Database
7. The SafeSourcing Query tool
8. SafeSourcing Product Information Sheets
9. SafeSourcing White Papers
10. SafeSourcing Press Releases.

Thank you to those of you that have allowed us to achieve this growth.

As always, we look forward to and appreciate your comments.

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