Archive for the ‘Strategic Sourcing’ Category

Getting to know your specifications.

Friday, June 17th, 2011

Here is a challenge: Pick a product that you purchase and write out a specification. Be specific and include components and peripherals. Take it a step further and write down how many and how often you purchase. Finally, what is the price you are currently paying for this product? Is that the same price you agreed to pay when at the beginning of the contract?

This exercise may seem basic, but this knowledge is a vital component of the procurement process. Here is a list of potential red flags that may mean it is time to research your products.

     1. All of your product data is in the form of a vendor invoice.
     2. You are uncertain of your order volumes or frequencies.
     3. You have been placing the exact same orders for years.
     4. Your pricing fluctuates often.

Be honest with yourself; is there room for improvement in product knowledge? I would encourage you to reach out to your strategic sourcing partner for suggestions. Aside from dollar savings results, you will also benefit from having a complete set of product specifications, vendor information and more at the completions of your strategic sourcing process. 

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.

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.

Getting to Know the Organizations Helping to Protect Us

Monday, April 25th, 2011

If you turn on the news at any time of day you are constantly being faced with hundreds of stories about people trying to hurt other people.  It can be so overwhelming at times that it seems there is no one actually trying to “help” anyone else.

The fact is there are thousands of organizations and millions of people all over the world whose primary goal and focus is to help protect the planet and more importantly, the people on it.  These same organizations also provide certifications for millions of products that companies buy every day that demonstrate an awareness for protecting us from the “shortcuts” and harm that so many times arise in the course of making those products.
Organizations like the Forest Stewardship Council, who certify wood products promoting better and more responsible uses of our forests and ensure the sustainability of those same forests that are used in making their products.

 There are literally tens of thousands of organizations that provide these types certifications as well as the lists of the certified companies and products who have demonstrated that capability to do things the right way.  These items can be very useful resources to helping your company select a better mix of product.

For more information about these types of organizations please visit the SafeSourcing Wiki or contact a Customer Service representative to find out how you can begin sourcing from suppliers out of our database of certified vendors today.

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.

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.