Archive for the ‘Supply Chain Procurement’ Category

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Understanding the Relationship Between Procurement and Marketing

Thursday, April 8th, 2021

 

Todays post is from our SafeSourcing Archives

The relationship between a retailer’s Marketing and Procurement Departments has been one struggling to maintain cohesiveness in many companies for quite some time.

While the Marketing team is continually trying to find creative and cutting-edge ways to increase sales within a retail organization, Procurement is constantly looking for ways in which to not only reduce costs, but find the best fit of suppliers with their company.

In many cases, marketing will expend a good deal of effort to find vendors to work with them on projects that when turned over to the procurement team can’t even be considered because their price is too high.  In the end this costs the company money, creates continued division between departments, and causes unnecessary lost time and sales.

Studies and reports have shown, and we at SafeSourcing agree, that the involvement of the Procurement department, even at the most basic level, into marketing projects can reap huge benefits as both departments work toward finding partners in their suppliers to achieve both their marketing and procurement objectives.

Retailers whose Marketing departments can leverage the database of the Procurement department’s suppliers will find a positive effect on their spend while achieving the ROI they are looking for on their campaigns and will create a better team environment within the company to achieve like-minded goals.

For more information about how the SafeSourcing database of known suppliers can help your company’s marketing and procurement departments work together to achieve these goals, please contact a Customer Service representative today.

We look forward to and appreciate your comments.

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The Supplier Selection Process

Tuesday, March 30th, 2021

 

Today’s post is from our archives at SafeSourcing.

In brief, here are few steps to selecting  the proper suppliers   in order to provide the best goods or services at the best prices and in the right time frame and location for your specific business needs. This process is broken down to a few select categories to assist you in doing so. While there are certainly others, this will get you off to a good start.

Price – A key consideration for choosing suppliers is affordability. Competitively priced suppliers are usually the most attractive option. Affordability does not always represent the best value for money. If the quality of your supplier’s product is subpar, you may incur additional costs for returns and replacements, and risk losing business. If you decide to pass poor quality on to your customers, you risk damaging your business reputation.

Reliability – Reliable suppliers deliver the right goods or services on time. Large suppliers are generally more reliable because they have enough resources and systems in place to make sure they can still deliver if the unplanned happens, which it usually does.

Stability – You will want experienced suppliers with a proven track record. Stability is important, especially if you are entering into a long-term contract with a supplier or they are the only supplier of a particular item critical to your business.

Location – Consider location when selecting suppliers. Dealing with distant suppliers might mean longer delivery times and extra freight costs. When lead time is the most critical, a local supplier might be a better option. I recommend investigating freight policies of distant suppliers. Bulk orders, for instance, might get you free shipping or you might be able to combine different orders to reduce costs.

In addition, your might  also want to consider financial strength, existing user references, specific industry certifications and programs that support your companies social responsibility initiatives.

SafeSourcing would like to assist you with your supplier selection process.  Our SafeSourceIt™  Global Supplier Database already contains much of this  information. In order to learn more as to how we can help you with your specific procurement needs or about our “Risk Free” trial program, please contact a SafeSourcing Customer Service Representative. We have an entire customer services team waiting to assist you today.

 

 

 

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Let’s play supplier poker if you dare!

Monday, September 14th, 2020

 

Todays post is from Ron Southard, CEO at SafeSourcing Inc.

Let’s play supplier poker! Then we’ll find out how good your current supplier data is.

If this were a real poker game, I’d raise our big supplier data versus your existing supplier data.

Locating, managing and updating supplier information that companies choose to do business with has never been more difficult. How many companies that you used to do business with 4-5 years ago are no longer in business? How many new companies have taken their place? I already know the answer you are going to give me. It’s I don’t know.

We keep hearing about big data. With new regulatory requirements emerging daily, economies failing, the supply chain shrinking in some places and expanding in others,  changing  safety factors and  environmental factors ( think LEEDS), detailed supplier information and traceability are but a few of the issues that require regular maintenance in order to mitigate a company’s risk.

Solution Providers like SafeSourcing that provide supplier databases (SafeSourceIt™) that are part of automating the procurement process, need to step up and make sure that their data support these changes on a regular basis to the greatest extent possible by providing tools that interacts with both regulatory agencies and suppliers to insure consumer safety and environmental impact as more new sources of supply and new products enter the supply chain on a daily basis.

Actions that solution providers can take should include but are not limited to:

1. Monitor daily alert data as to product recalls and safety warnings.
2. Trace warnings back to the original source of supply automatically and maintain history.
3. Require that suppliers meet certain safety certifications in order to participate in their database.
4. Require that suppliers meet required environmental certifications or programs in order to participate in their database
5. Provide a regular purge of suppliers that do not comply with necessary standards.
6. Validate the entire database regularly for companies no longer in business
7. Adhere to a strict RFI process for new suppliers requesting participation in their database.
8. Provide a rating system for suppliers that are offered to companies as new sources of supply.
9. Monitor regulatory agencies such as ISO for new standards and include them as further requirements in supplier databases.
10.Conduct on going category research for evolving sources of supply.
11.Compare your best customers GL to your database for additions deletions.

Ask your solution provider what their process is to grow manage and maintain their supplier database for your benefit.

If you’d like more information on the SafeSourceIt™ Supplier Database of over 427,000 cleansed global sources of supply, please contact a SafeSourcing customer services account manager.

We look forward to and appreciate your comments.

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What’s the genesis of your supplier database and how was it built?

Tuesday, March 24th, 2020

 

Todays post is from Ronald D. Southard, CEO at SafeSourcing Inc.

All databases have their start as an information gathering exercise that ultimately is enhanced by those characteristics the owner or developer determines to be useful to the community of interest the database is to be offered to. The information then becomes part of a data model where information sets can be accessed or searched based on a variety of queries or questions. Most developers follow a process called Universal Description, Discovery, and Integration or UDDI  as this process.

Universal Description, Discovery and Integration or (UDDI) is a standard established for building online databases of companies and the goods and services they provide, similar to Yellow Pages for the Internet. UDDI is intended to help businesses locate suppliers and products. Sourcing companies supplier databases go well beyond this definition.

Data models can be extremely complex and that is where they become more than a simple on line yellow pages. In fact high quality supplier databases should be able to provide much of the data you might find in the opening pages of a detailed RFI. A simple query like show me all companies within a 500 mile radius of your home office zip code that provide a set of products that meet the following safety certifications.  A next step might be summarizing all company information for these companies by a list of attributes such as company description, sale, years in business, officers etc.

How easy would that make your life?

If you’d like to find more qualified and vetted suppliers to support your sourcing efforts of any product or service, please contact a SafeSourcing Customer Services Account Manager

We look forward to and appreciate your comments.

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Retailers should have continuing success when re-running prior e-procurement events.

Monday, August 12th, 2019

 

Today’s is a short post from Ron Southard, CEO at SafeSourcing in response to a customers question.

There is a proper way to insure the sustainability of your strategic sourcing or reverse auction events going forward.  Since you have already conducted or should have conducted your detailed discovery and analysis, a robust supplier database should permit you to do the following.

1. Conduct a detailed supplier discovery
a. Rank suppliers by
i. Size
ii. Experience
iii. References
iv. Environmental certifications
v. Safety Certifications
vi. Coverage area
2. Develop a three year supplier game plan
a. Develop a three year time line  for all categories
b. Identify suppliers for each event over the three years
c. Develop a three year supplier rotation schedule for those suppliers.
3. Role play internally  each year for a test category
a. Ask the following questions
i. Who will you invite and why
ii. Keep in mind the unique benefits of distributors and manufacturers
iii. Discuss award the business strategies
iv. Review alternative scenarios
v. Review impact on non awarded suppliers
vi. Determine which suppliers will be invited back and why
vii. Determine what new suppliers from your database search will be  invited next year.

If you’d like some help building this into a process that will work over and over again, please contact a SafeSourcing customer services representative.

We look forward to and appreciate your comments.

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We’ve all heard about the wild blue yonder. But what is Blue Ocean Strategy?

Wednesday, August 7th, 2019

 

Todays repost is fro Ronald D. Southard, CEO at SafeSourcing Inc. in 2014 and still relevant today.

4PL’s or fourth generation logistics providers are the newest (although not that new) of logistics providers and typically they are a consulting firm that brings together the resources of other providers such as 2PL’s and 3PL’s to drive world class logistics performance. This might include global or local companies that are focused on air transportation; ground transportation as well as ocean bound freight. The goal of these organizations is to piece together solutions rather than to develop or own them. Without assets, 4PL’s can change quickly as performance and demand dictates.

With a good 4PL in place companies typically are not bound by their traditional marketing areas and can create new demand in areas they may have never conducted business in before. This is referred to as Blue Ocean Strategy.

According to Wikipedia, Blue Ocean Strategy is a business strategy book first published in 2005 and written by W. Chan Kim and Renée Mauborgne of The Blue Ocean Strategy Institute at INSEAD. The book illustrates what the authors believe is the high growth and profits an organization can generate by creating new demand in an uncontested market space, or a “Blue Ocean”.

How are you managing your logistics requirements? If you’d like some guidance before you just jump in and get overwhelmed, please contact a SafeSourcing Customer Services Account Manager.

We look forward to and appreciate your comments.

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Understanding the Synergy of Culture and Procurement

Wednesday, September 12th, 2018

 

Today’s post is from our SafeSourcing. Archives

The follow-up question to the one above could be, “Do you even KNOW what your company’s culture is versus what they intended for it to be?”

I recently attended a local ISM meeting where the guest speakers from VAP Packaging did a terrific job (with a number of their team members) explaining the importance of culture not only within their organization but for other organizations as well.   The culture they have developed has empowered their entire team with the confidence to think outside the box and a system or rewards when they do so effectively.  It was impressive.  For a long time, the culture of a company and how that company handles its supply chain have not always been on the same page.  Unity and Teamwork are preached to operations while procurement is still told to SAVE MONEY and CUT COSTS.

Opportunity not just Order Taking – As procurement professionals we are tasked with assisting the business to run more smoothly, to help save money and to help foster business partnerships that will grow the company.   In many companies this translates to “Rick, I need a million widgets.  Go get me some quotes and samples of the best ones out there.  After we decide what we want you can beat them up on price and write up the contract.”   While this does provide some value to the organization by freeing operations time to do what it needs to do, it does not account for the fact that maybe “Rick” could have presented 2 new options to the business that switch to “dongles” at half the cost, half the volume and can improve operational efficiency by 25%.   Not all companies will embrace outside the box thinking from its procurement team so understanding where the current culture stands is an important part of improving that.

Value of cost reduction – There are so many times people get enamored by the numbers.  They hear about a solution or product that has an ROI of 5x in 6 months or that can generate $500,000 in savings, and they instantly seek for ways to implement that service or bring that product into use.  What can be ignored in the process, is the fact that by introducing this new product that is going to save $500k to operations, internal procedures and personnel must now change what they are doing, resulting in a drop in efficiency of 40%, costing the company $1M over 9 months.  There can be a cost of change to achieve savings and understanding the pressure points with the organization is critical to weighing the value of a new change.

Understand the Relationships – Many professionals will see this point and think “See, don’t mess around with the vendor relationships I have spent years developing.”  This is not saying that.  The point being made here is to understand completely what relationships are currently in place so that they can be reviewed for improvement. Partnerships can be good.  They can provide security and assistance in emergencies and they can help strengthen companies when the fit is right.  Partnerships are not always good when they are defined by “I have been doing business with Jim for 10 years and he has never let me down.  I am sure he is giving me the best prices he can give me.  He even stops by once a month to take me to lunch where I hardly see other vendors.”  These types of relationships have the tendency to cover years of price increases and terms that have benefitted only the vendor.  Understand the relationships in place so that facts and research can be done to either challenge or support the value they bring to the organization.

At SafeSourcing we understand the value of understanding your company culture and have been doing it for our customers to help them effectively structure projects for years.  For more information on how SafeSourcing can assist you or on our “Risk Free” trial program, please contact a SafeSourcing Customer Service Representative.  We have an entire customer services team waiting to assist you today.

We look forward to your comments.

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What is a stock out and what are some of its effects?

Monday, November 13th, 2017

 

Today’s post is from our  SafeSourcing Archives.

A stock out, or out-of-stock (OOS) is defined as “a term used in product manufacturing or distribution to describe an inventory shortfall arising from unexpected demand, ineffective inventory management, production delays or replenishment disruptions.” This leaves obvious undesired effects for both the business and the customer.

If merchandise is not available for a customer there may be many possibilities. Your customer may decide to wait to purchase the product. If the product is essential to the customer, then they may be prepared to wait. Even with the willingness to wait, there might be a considerable downturn to the customer’s satisfaction level.

The customer decides to purchase from another vendor or retailer. If the customer is able to obtain the product elsewhere or does not need the item immediately, this is the normal outcome. It is still possible that the customer will do business with you in the future, but this may be detrimental to their customer satisfaction level.

The customer is no longer a customer. This is the potential worst case scenario of a stock out. If a customer is unhappy being unable to immediately purchase the desired product then they may also be willing to permanently purchase or procure this product from another vendor or retailer.

We enjoy bringing this blog to you every week and hope you find value in it. We want to help keep your shelves stocked, with the products your customers need. For more information on how we can help you with your procurement needs or on our “Risk Free” trial program, please contact a SafeSourcing Customer Service Representative.  We have an entire customer services team waiting to assist you today.

 

We look forward to your comments.

 

 

 

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Supply Chain Management

Wednesday, May 31st, 2017

 

Today’s post is written by Robert Rice, Account Manager at SafeSourcing Inc.

There is mounting pressure that distributors need to better align themselves with convenience store retailers to trim costs from the industry’s distribution network.

Cutting costs remains a challenge for convenience store chains big and small. Dealing with distributors and local foodservice providers, c-store’s are learning ways to grow more efficiently without sacrifice of goods and services. Some ideas they have implemented include maximizing product turns, reducing out-of-stocks, and removing slow-moving items to make room for better sellers.

It is very important to embrace category management and recognizing the potential of the store by stocking high-margin impulse items like candy and snacks in the highest traveled aisles.

Owners also need to make sure they have the best selling items. The top 50 SKUs, which only represent about six-tenths of 1% of all SKUs in the convenience store, drive 32% of the business. The key is to have a very good focus on the assortment of these core items.

Not Just Cost

Many c-store owners tend to focus on cost rather than all the elements that go into their purchases. This could include the terms they have set up, order quantities, delivery decisions and a host of support services. One of the most successful ways to control costs is consolidating the number of vendors coming through your store, something 7-Eleven has perfected. They realized they had vendors with over-lapping items. By consolidating them, they reduced costs through volume purchasing with less vendors.

The challenges for convenience store chains and owners will continue but taking the time to evaluate your supply chain, the vendors you do business with and what items sell and which don’t could lead to huge savings.

For more information on how SafeSourcing can assist you in exploring your procurement solutions for your business or on our “Risk Free” trial program, please contact a SafeSourcing Customer Service Representative.  We have an entire customer services team waiting to assist you today.

We look forward to your comments.

 

 

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What is the Certified Professional in Supply Management® (CPSM®)?

Monday, May 8th, 2017

 

Todays post is from our SafeSourcing Archives

The Certified Professional in Supply Management® is the qualification that supply management professionals strive to earn. The CPSM® will be relevant internationally and reflect the expanded knowledge, skills and abilities needed to be a successful supply management professional.

Certification for the CPSM is offered by The Institute for Supply Management or (ISM) which was founded in 1915 and is the largest supply management association in the world as well as one of the most respected. ISM’s mission is to lead the supply management profession through its standards of excellence, research, promotional activities, and education. ISM’s membership base includes more than 40,000 supply management professionals with a network of domestic and international affiliated associations. ISM is a not-for-profit association that provides opportunities for the promotion of the profession and the expansion of professional skills and knowledge.

Supply chain workers should be proud of their profession and earning your CPSM is one way to brag about it.

Please contact our SafeSourcing customer services team if you’d like assistance with any of your RFI’s, RFP’s or RFQ’s. It might just get you promoted for making a company changing decision.

We look forward to and appreciate your comments.

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