Archive for the ‘Supply Chain Procurement’ Category

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Successful supplier relationships

Monday, March 9th, 2015

 

Today’s post is by Tyler Walther, Account Manager for SafeSourcing.

The relationship between a supplier and buyer can be multifaceted with each party wanting to maximize its time, resources and cash investment. Often times these may be competing priorities that can add stress to the relationship.

What’s required to sustain a mutually beneficial relationship is an understanding of each other’s business needs. That does not necessarily mean driving for the lowest price but actually realizing that the success of one partner helps the success of the other.

Supplier relationships are different from simple purchasing transactions in many ways.  First, there can be a sense of commitment to the supplier. For example, if a supplier sells farm feed, he can feel confident that the buyer will use him the next time the company he represents requires a new shipment of farm feed. Another element of these supplier relationships is advanced planning. Buyers don’t just communicate with suppliers when a purchasing need arises; they also contact them in order to discuss their future needs and to determine how best to fulfill those needs by working cohesively.

One key is a supplier’s knowledge of the buyer’s business. When suppliers are viewed as commodity providers, they generally don’t take the time or are not given the opportunity to learn the details of the business or its future business strategy. Consequently, suppliers that are deemed to be partners are encouraged to become knowledgeable about the company, its procedures, its products, and its goals. The result is greater buyer satisfaction with the services provided by the supplier.

Overall, suppliers and buyers are better served when they come together to form strong, mutually beneficial, secure business relationships. When these relationships exist, they can drive the growth and profitability of both organizations and prevent purchasing difficulties.

If you’d like to learn more, please contact a SafeSourcing Customer Services Account Manager.

We look forward to and appreciate your comments.

 

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Lean business practices create a weighty issue.

Tuesday, May 6th, 2014

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

This author tires of the desire of businesses that are trying to reinvent themselves and in so doing constantly coming up with new buzz words, industry terms and business jargon in order to try and prove that they are thinking differently and as such should be trusted to be on the right path. Maybe their original business plan was just flawed and they are not deserving of our trust.

Lean in any functional area of a business simply means producing more or getting more done with fewer resources. I’m not sure this is a great message for companies that are just launching, trying to grow or improve. If you’ve been around for while, and your customer reads between the lines properly, this may just mean that you did not plan your launch properly or react properly to market indicators in the past.

We all know that lean practices were originally a move to reduce costs in the manufacturing process and since it worked for manufacturing where we are typically talking about thousands if not millions of pieces and parts, other companies began to think why not for our business. As such let’s apply the term lean to the supply chain or the procurement space. Any one that knows the procurement space already understands the lack of resources.

The goal of every business should be to provide the end user or customer with what they want or what you have promised them at a fair price. If you do so, that customer and others that hear about that customers experience should buy more. When this happens, if the business plans appropriately they should grow and grow profitably. And this should create new and sustainable jobs. So, how is this any different than the way businesses were run 50 years go or even 100 years ago? The truth is that it’s not.

The decision to not hire, to try and do more with less and to reposition resources rather than firing someone is a better way to run a business. Unfortunately they do not teach this in business school. This author has been through many mergers, acquisitions, downsizings and the like over a lengthy career. One thing you can always count on in these scenarios is let’s cut expenses. You can call it lean, but it’s not.

So, let’s not hide behind the term lean or other business jargon or buzz words.

If you’d like to learn more about how SafeSourcing can help you reduce costs without reducing headcount, please contact a SafsSourcing Customer Services Account Manager.

We look forward to and appreciate your comments.

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The Snow Affect

Monday, March 3rd, 2014

Today’s post is by Mark Davis; Sr. Vice President and COO at SafeSourcing.

The winter of 2013-2014 will rise to new heights after the latest storm ravages the entire country.  The full effects of this winter will not felt in their entirety until later this year but reports in some areas are already known and will begin to change the procurement landscape before the winter is even over.

Logistics Availability – Recent studies and statistics have reported that the availability of Third Part Logistics (3PL) companies to handle the shipping demands of their customers is already starting this year with an alarming trend.  The supply of vehicles to handle shipments is grossly inadequate compared to the need.  As with any situation where the demand outweighs the supply the prices will not only rise but availability to even cover some of these shipments is suspect.  This affects when product arrives to a location causing a ripple affect across the supply chain.  With temperatures dropping so low, the option of using dry van vehicles in the winter to keep things cool has gone away as product in extreme cold can be damaged in the same way that heat can in the summer.  This has caused an increase in variable temperature equipment that has far outpaced the supply for this time of year.

Adjusting to buyer patterns – It is no secret that harsh weather not only affects when and if we are buying, but also what we buy.  Studies such as the one by Vikram Somaya, have analyzed weather and consuming buying data to develop correlations between what people buy and the weather.  This idea of weather changing buying patterns creates serious impacts in the business world as products with inventories reflecting normal weather go untouched while other products are in high demand and quickly out of stock (a retailer nightmare).  On top of the changes in buying, many parts of the country are faced with consumers staying in not purchasing anything.  Restaurants sit empty, stores void of shoppers and state and local governments missing millions of dollars in tax revenues.  Looking at historical trends and missed opportunities will allow businesses to more accurately create demand forecasts and contingency plans for supply if/when the weather goes bad.

Personnel Issues – One other problem area that comes from severe weather is the affect it has on personnel, not only within a company but within the suppliers and vendors that company does business with.  The world has become a much more “remote capable” place in which to operate but winter storms still affect the quality of work and availability for many people and can still result in power outages that bring work efforts to a standstill.  While businesses may not be able to control power outages or employees that are physically unable to get into work from their side or their suppliers side, they can control the urgency with which they address their projects in advance of inclement weather.  This means that on a Friday afternoon before a big potential storm they may stay an extra hour or two to ensure they work with everyone they can to be ready for potential bad weather instead of waiting and getting stuck with the effects of bad weather. 

Severe weather is a part of the world we live and out of our control but steps can be taken to minimize the effects those storms have on a business and supply chain.  For more information on how SafeSourcing can assist your team with planning for these occurrences 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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Just what is a Private Label product and where do you source it?

Tuesday, November 19th, 2013

Probably the best source of information on private label or store brand products is the PLMA or Private Label Manufacturers Association. This is actually a global organization.

According to their website, their show this week ending today the 19th in Chicago  presented more than 2,000 exhibit booths, featuring food, snacks and beverages, household and kitchen products, GM, and health and beauty. Exhibitors range from large, well-known store brand makers to small and medium-size companies. More than 35 countries will be represented on the show floor, including ten national pavilions.

If you’re not happy with your current private label offering or have never had one, this show is a must. There are also a number of educational workshops. In fact, PLMA sponsors workshops throughout the world annually. You can find a little more information on these at their website http://plma.com/.

We look forward to and appreciate your comments.

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You might think that suppliers understand that a reverse auction is a great opportunity for new business.

Friday, November 15th, 2013

The easiest way to do this it to keep the communication open friendly and non adversarial. At SafeSourcing we have a training class for this that we have with our customers and for all new associates as the join our company.
A friend of mine that is a manufacturer said it this way. ?Openly communicate with our supplier?s because their relationships are important to us. Make sure they understand everything and are comfortable with it. Make sure they have no lingering questions.

Here although not all inclusive is a list of sample questions one might consider when inviting a supplier as a new participant.

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 reverse auction event such as?
a.?Reserve Price
b.?Low Quote Indicator
c.?Max quote
d.?Funds
e.?Terms & Conditions
f.?Notes
g.?Extensions
h.?Matching quotes
i.?Event? rules
j.?Product specifications
k.?Samples
l.?Award of business
m.?Letter of Intent
n.?This is an opportunity for new business
o.?Event communication strategies

At the heart of it, it comes down to something we all know but don?t always practice and as such negatively impacts the sustainability of processes that just make good sense. That would be open clearly articulated communications.

If you’d like to know why SafeSourcing has a customer satisfaction rating greater than 99%, please contact a SafeSourcing customer services account manager

We look forward to and appreciate your comments.

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Suppliers, what makes you different?

Tuesday, October 15th, 2013

Today’s post is by Mark Davis; Sr. Vice President of Operations and CTO at SafeSourcing.

One of the biggest Supply Chain topics for 2013, as it is every year, is the concern over rising costs and shrinking profits, and unfortunately this is the stigma attached to many eProcurement tools and practices.  We tell our customers and the suppliers who participate in our events it is about more than just price; it is about the overall value that is presented.

Today we will be looking at ways that suppliers can distinguish themselves from their competition in areas other than price.

Labeling and Packaging – Labeling and packaging are one of the big expenses in For Resale items for many retailers especially when it comes to Private Label goods.  Suppliers who are willing to work with their customers to develop packaging that will streamline the receiving and sales process can gain a big advantage over their competitors in a way they can leverage to great value.

Training & Professional Services – One of the easiest ways for suppliers to begin to separate themselves from the pack is in the area of professional services and training.  For the supplier these services can generate a value to their customers that far exceeds the actual cost of the service itself.  In this case it is a win-win situation where the customer gets valuable services while the supplier gets an opportunity to continue to build on the face-to-face relationship in a useful manner.

Guaranteed Service Level Agreement (SLA) Metrics – The bottom line in any Supplier-Customer relationship is not just price or “bells and whistles” it is about how well the supplier delivered what they promised, how they dealt with situations when they didn’t deliver as promised and what they are willing to risk if they fail to achieve on the Service Level they promised.  Getting the best price means nothing if the product or service is of low quality or is late.  The best suppliers OVER service their customers and are willing to stake a portion of their cost on their ability to achieve that level of service every time.  These guarantees may not always translate to your bottom-line in a positive way, but not having them in place and receiving poor quality will definitely impact it in a negative way.

For assistance on helping you work with your suppliers on the extra value they can offer you, please contact a SafeSourcing Customer Service Representative.

We look forward to your comments.

 

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A Supplier from a recent RFP mentioned he loved the SafeSourcing eRFX process!

Wednesday, October 2nd, 2013

Today’s post is by Shelly Hayre a COE account manager at SafeSourcing.

I was recently following up with a Supplier from a past SafeSourcing eRFX event. He told me he loved the eRFP process as it seemed so seamless. The Supplier then went on to describe the standard RFPs he is used to; submitting hundreds of page documents and proposals, sending multiple hard copies, clueless on the company’s objectives and needs.

An RFI/RFP allows you to qualify a supplier for your company’s needs. Why give yourself more work than necessary? The following tips will bring your company more useful and painless information through the eRFX process, specifically eRFI’s and eRFP’s.

1. Be Specific!:  When you are setting up your RFI/RFP questions try to keep as many questions as possible closed. If you are searching for a specific answer then make sure you are asking the right questions to receive the correct response. I have seen RFI/RFP’s that ask such broad questions that every supplier interprets them differently and it is hard to do a true comparison between the answers.

2. Share with the suppliers:  Know what your company’s needs and values are. If having a national supplier and covering all locations is important, then provide suppliers with a list of locations to verify they can cover all those locations. If this is a deal breaker, then it is as simple as a yes or no question. Providing suppliers with all the needs and values of the company will provide you with the best answers.

3. Pricing Model:  Instead of asking for their pricing model, determine a standard direction for your RFI/RFP in order to steer the gathering of pricing in that direction. If you let the vendor provide you a general pricing model there could be many hidden fees not required. This will make comparing pricing between suppliers difficult. 

Successful RFI/RFPs may require some extra effort and time at the beginning, but it will save you more time at the end. SafeSourcing prides ourselves on creating successful RFI/RFPs that will bring value to your company.

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 and appreciate your comments.

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The Rising Interest in Supply Chain Degrees

Monday, August 12th, 2013

Today’s post is by Mark Davis; Sr. Vice President and COO at SafeSourcing.

Over the past few years there has been an increase in the interest of college students and business professionals to pursue degrees and certifications in Supply Chain Management.   As the current workforce makeup changes and the landscape of business adjusts to new variables it is no wonder that some majors like Supply Chain Management are getting more attention to the point where some students are being turned away due to high demand for degrees in this area.  Today we will look at a few of the reasons this rise in interest is happening across the U.S.

Increase in demand – In recent studies by the National Association of Colleges and Employers, Supply Chain majors are getting job offers out of college 15% to 20% more frequently than their Business Management and Accounting peers.  This increase in demand for college graduates has likewise created an increase in salaries for Supply Chain degree holders.  With the increase in pay and high placement levels, the interest in Supply Chain degrees has caused some universities to turn students away from their programs as they plan to increase capacity with more classes and more business school teachers.

Changes in Supply Chain Process – It is no surprise that the increase in interest in Supply Chain degrees and in job openings has paralleled the changes in Supply Chain Management in general as new eProcurement tools, new processes and new emphasis on cutting expenses in this area have begun to evolve and grow.  Where companies at one time had only a few associates employed on their procurement teams, if they had designated teams at all, these same companies are beginning to expand the methods by which they source their raw material, products and services.  This change in process has created a focus and a need for qualified professionals to enter organizations and help lead the company to more control over direct and indirect spend.

New Availability of Programs – Over the last 20 years universities and accredited organizations have increased the number of classes and degrees they offer in the Supply Chain Management adding both frequency and the variety of majors to focus on specific areas of concentration.  International sourcing, sourcing services, IT spend management, direct spend management, indirect spend management, contract management and vendor management are all new areas students can choose to focus on in pursuing their degrees.  The number of certification programs within Procurement and the Supply Chain spaces has also increased as organizations and schools continue to offer new opportunities for professionals to increase their education in new sourcing processes and techniques.  This increase in choices has created renewed interest in the Supply Chain as a focus of continued education for thousands of new students and existing professionals.

For more information about SafeSourcing 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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How should one go about convincing suppliers to participate in an eProcurment event?

Tuesday, July 2nd, 2013

Today’s post is by Ryan Melowic; Assistant Vice President of  Procurement COE at SafeSourcing. 

In our industry there are sometime vendors who don’t adopt the process and initially decline to participate in an eProcurment event.  For one reason or another, they don’t feel it is a fit for them.  My goal is to make sure that vendors thoroughly understand the opportunity. 

The strategy I use when following up with vendors is to ask them questions as to why they feel the particular event is not a fit for them.  By breaking down their concerns and objections, I’m able to understand what their major objections are.  I then address each issue with a reason why they would be a fit. 

During this process you are likely to hear all kinds of responses from an incumbent that doesn’t participate in eProcurement events to a vendor who doesn’t feel that pricing is the only piece involved.  The vendor who doesn’t feel that pricing is the only piece is provided in most cases with a response like “you are absolutely correct, pricing isn’t the only piece of the puzzle.  However, the company who is hosting this eProcurement event has chosen this method.  This will be your first step in courting the relationship with the host company.  Next steps could potentially be presentations by you in order to help the host understand your company’s offerings.”  This helps the vendor understand that events are not just based on price alone.  If the incumbent does not want to participate in some cases it may take a more strong armed approach.  Explaining to them that the host and their current customer have chosen to collect pricing in this manner and if they want to be considered going forward that they will need to participate.  At the end of the day it comes down to the simple fact that as a supplier; are you sure you want to pass up an opportunity for future business?

At SafeSourcing we work diligently to make sure our companies eProcurment events are a success!  We don’t take no for an answer until we have done the due diligence to rule a supplier out.   For more information as to how we can help you with your procurement needs, 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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Is your company comfortable with all of your current sources of supply?

Thursday, June 27th, 2013

If your answer is yes, there is a good chance that you are paying more for products, services and solution bundles than you should

Being comfortable is great. Sometimes however being to comfortable can also create complacency. We all know we have coworkers that come to work everyday and do what only what they perceive their job to be. Nothing extra is ever done, and few ideas come from these folks that are just comfortable with what they are doing and how they are doing it. They do a good job at it, but that’s it.

Let’s apply this type of complacency to knowledge workers in the supply chain. If we are being honest with ourselves; we see this situation all the time.

 A buyer you know has a list of products or a category manager has a category that they are responsible for. There are only so many hours in the day and they have a job to do in order to get product to a distribution center, warehouse, store or some other location on time. They have done business with the same suppliers for a number of years. In fact the person in the job before them did business with these same suppliers and the person before that. So its easy to not rock the boat. It takes to much time to look for new sources of supply and after all one can only manage so many relationships anyway. Finally the buyer is comfortable with product quality and pricing has not gone up to much over time.

With the help of your procurement provider, this situation is easily rectified, but you need to be open to change. This is normally led from the top of the organization. The following is a partial list of what you can do to eliminate complacency and support the fact that you knowledge workers don’t have a lot of free time.

 1.   Provide your e-procurement company with a list of your suppliers by category.
 2.   Provide your e-procurement provider with a complete list of products carried by each supplier.
 3.   As your e-procurement provider to produce a list of new sources of supply located within a fifty mile radius of each distribution center or warehouse
 4.   Ask your e-procurement provider to provide data on each supplier’s including incumbent’s safety certifications such as GFSI and ISO.
 5.   Ask your e-procurement provider to provide supplier background information such as years in business and user references.
 6.   Select categories or products to source from your incumbents catalog and cross reference with new suppliers offerings.

The additional steps to this process can be provided by SafeSourcing as a part of our best practices deliverables which are included in our event pricing. The SafeSourceIt™ Supplier database includes over 427,000 global sources of supply that can be sorted by a variety of filters such as country, county, postal code or mileage from a particular location, plus many more.

If you’d like more information, please contact a SafeSourcing Customer Services Account Manager!

We look forward to and appreciate your comments

 

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