A friend of mine from japan sent me two articles this past week relative to Mars the owner of the Mars, M&M and Snickers brands behavior in sourcing their cocoa and their responsibility to be socially aware and environmentally friendly.

No one would blame food companies during the worst global economy in over 75 years if they tried to cut corners and buy less expensive goods and services.

This author has posted several times on the emerging standard of TBL. For those of you that are not aware of it, please read on and ask yourself what your company is doing in this area. A Mars spokesperson goes on to say that their employees and consumers expect them to do the right thing. So do the stake holders in all companies. Mars gives us a great view of how the business world can be.

The triple bottom line (or “TBL”, “3BL”, or “people, planet, profit”) captures an expanded spectrum of values and criteria for measuring organizational (and societal) success: economic, ecological and social. With the ratification of the United Nations and ICLEI TBL standard for urban and community accounting in early 2007, this became the dominant approach to public sector full cost accounting. Similar UN standards apply to natural capital and human capital measurement to assist in measurements required by TBL, e.g. the eco Budget standard for reporting ecological footprint.

In the private sector, a commitment to corporate social responsibility implies a commitment to some form of TBL reporting. This is distinct from the more limited changes required to deal only with ecological issues.

Ask how your sourcing partners can help you in this process.

We look forward to and appreciate your comments.

Recalls are actions taken by a firm to remove a product from the market. Recalls may be conducted on a firm’s own initiative, by FDA request, or by FDA order under statutory authority.

? Class I recall: a situation in which there is a reasonable probability that the use of or exposure to a violative product will cause serious adverse health consequences or death.

? Class II recall: a situation in which use of or exposure to a violative product may cause temporary or medically reversible adverse health consequences or where the probability of serious adverse health consequences is remote.

? Class III recall: a situation in which use of or exposure to a violative product is not likely to cause adverse health consequences.

? Market withdrawal: occurs when a product has a minor violation that would not be subject to FDA legal action. The firm removes the product from the market or corrects the violation. For example, a product removed from the market due to tampering, without evidence of manufacturing or distribution problems, would be a market withdrawal.

? Medical device safety alert: issued in situations where a medical device may present an unreasonable risk of substantial harm. In some case, these situations also are considered recalls.

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Are companies and their buyers really looking for suppliers with Green products? Are suppliers rushing to include these products and services as part of their standard offerings?

Companies continue to look for ways to differentiate themselves as they practice more socially responsible ways to run their businesses whether they are supplier or a buyer. We know companies are leaning heavily on their green product offerings, initiatives, and other programs as a key differentiator today and in the future.

For those companies that are more talk than walk, please consider the following in your approach to improve your entire CSR focus.

Nine steps to safer and more eco-friendly procurement

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 of their own.
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. Write it down and then 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 your comments

With the new administrations increased focus on food safety more and more groups are entering the fray every day. Why should those in the retail supply chain be concerned?

I received the following email from the Consumers Union today relative to food safety and specifically speaking to those that have suffered from food poisoning in the past.

Dear Ron,
You may be familiar with case of actor Dennis Quaid, whose infant twins almost died when they were injected with a massive dose of blood thinner.

The email went on to provide a link to a specific set of questions relative to my experiencing an illness in the past related to something I ate and inviting me to share my story:

To wit. Have you or a loved one become ill with food poisoning? We would like to hear your story. You are not alone — approximately one in four Americans acquire a food borne illness every year! For some people food poisoning has drastic consequences – each year some 325,000 are hospitalized

This author has written frequently about this subject and the potential negative impact that a lack of focus or mistakes in food safety can have on a company?s net earnings as well as consumer confidence. The retail supply chain requires tools that provide traceable data that includes everything from the farm to the fork.

We look forward to and appreciate your opinion.

In yesterdays post we discussed sourcing strategies versus tactics

In the retail vertical let?s start implementing specific short term tactics that can drive immediate results…

A great example of the above might be augmenting the manual process that many retail sourcing professionals use today 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 implementations of 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 zip code or area code.

Sourcing tactics can be isolated procurement related actions or events that take advantage of opportunities offered by the gaps within strategic plan 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. There are also an optimal number of suppliers that will encourage the optimal results.

We appreciate and look forward to your comments.

Let?s stop all of the chatter about strategic sourcing in the retail vertical and start implementing specific short term tactics that can drive immediate results…

A strategy is simply a plan of action designed to achieve a particular goal. In the case of strategic sourcing, the simple goal should be to buy the best product (quality) at the best price and labor optimization (total cost) from the best suppliers (standards).

A lot of conversation takes place on a regular basis in the procurement space relative to the number of manual processes that remain in place in the retail vertical relative to the RFX process. To be sure, this is true. It does not mean however that retail organizations do not have a strategy as to how they choose to source. For example, the goal of a company may be to improve net profits: the strategy chosen might be to undertake an advertising campaign; invest in a new computer system; or reduce costs in order to adjust consumer pricing.

This author does not believe that just automating the RFX and other procurement processes results in a strategic sourcing initiative that will be successful. Having a central repository for contracts, RFI?s, RFP?s and RFQ?s does not mean the tool will be used in its entirety or properly. In fact, more times than not companies revert to using their time honored processes and adjusting new tools to fit their comfort level.

Enter the specific tactic. Ah yes, the tactical plan that delivers the strategic plan. Not exactly. Tactics may describe specific actions taken for a specific area and can certainly be accomplished without a strategic sourcing plan in place.

Tomorrow we will review the specific tactic of developing new sources of supply

We look forward to and appreciate your comments.

Recently in an article in Continental Magazine titled A GREEN NIGHTS SLEEP,author Neil Weilheimer posits Eco-friendly hotels offer travelers a variety of ways to love the Earth. In the article a spokeswoman for TripAdvisor.com quotes their survey where twenty six (26) percent of consumers indicated they planned to be more green conscious during the next year. Thirty four (34) percent indicated they would even be willing to pay more for it.

First it is important that a retailer set their own environmental guidelines, after all we are planning on paying our own programs forward to suppliers that support similar initiatives right? If a retailer follows best practices in the e-procurement process and during the discovery process follows a hotel stays template created with the environment in mind, they can do just that. In the same article, according to Patty Griffin, founder and president of the Green Hotels Association there are steps a consumer can take, and like wise so can a retailer.

Ask the hotels you are considering about their policies and practices. As an example:

1. Does the hotel use energy star approved appliances and televisions.
2. Are rooms cooled by ceiling fans to limit air conditioning usage?
3. What about their linens and towels, are they made of organic cotton?

Additionally you can check prospective hotels websites to see if they list other green initiatives that you can discuss with them further.

This author believes that it is not that difficult. Focus on your company?s social conscience and include that in your discovery. Then pay it forward based on more than just price.

We look forward to and appreciate your comments.

There are a number of significant benefits suppliers receive by participating in e-negotiation events.

Quite often when speaking to new suppliers to invite them to participate in a reverse auction or an on line request for information the question comes up; what?s in it for me? This is almost never the case for suppliers that have been involved in the practice before.

Supplier benefits may include but are not limited to the following:

1. Suppliers can accurately represent their company and its capabilities to a buyer or group of buyers.
2. Suppliers benefit from reduced cost of new business acquisition.
3. Suppliers are exposed to more opportunities for new business.
4. E-negotiations bring more potential business partnerships directly to the supplier’s door
5. E-negotiations are transparent and all requirements are clearly defined
6. Suppliers can have access to competitor best pricing during the auction, which helps suppliers position themselves correctly in the marketplace
7. All of the buyers terms and conditions, product specifications, and other pertinent information is clear and concise which allows for accurate quoting
8. Suppliers are introduced to tools they can use in their businesses in order to compress their pricing.
9. Suppliers can instantly submit and modify their bids electronically rather than submitting paper bids, providing a faster, more efficient purchasing process.

The next time a e-negotiation solution provider calls you on behalf of a company requesting your participation in an e-negotiation event, ask to be added to the database and what you have to do to be invited to all events in the future.

We look forward to and appreciate your comments.

We do not need to be mesmerized to learn a little bit about food safety by looking to our northern border partner. Canada makes great progress with food safety with their Food Safety Enhancement Program (FSEP)

The Food Safety Enhancement Program (FSEP) is the Canadian Food Inspection Agency’s (CFIA) approach to encourage and support the development, implementation and maintenance of Hazard Analysis Critical Control Point (HACCP) systems in all federally registered establishments
The safety of food products produced in Canada is ultimately the responsibility of the food industry. Food inspection programs administered by the CFIA confirm that establishments have taken the appropriate steps to produce safe food products.

In the past, food manufacturers relied almost entirely on end-product testing to determine the safety of their products. Now, industry representatives and government together have developed scientifically sound principles based on HACCP to control production.

Hazard Analysis Critical Control Point (HACCP) was conceived in the 1960s when the US National Aeronautics and Space Administration. Since then, HACCP has been recognized internationally as a logical tool for adapting traditional inspection methods to a modern, science-based, food safety system.

FSEP encourages establishments to adopt HACCP principles. An establishment’s HACCP system includes its HACCP plans and prerequisite programs as well as procedures for the maintenance of the HACCP system.

The HACCP system prevents food safety problems by providing control throughout the manufacturing process at critical steps identified as Critical Control Points (CCPs). These points permit operators to detect and control hazards before products are distributed.

We look forward to and appreciate your comments

Do retail 3PL?s make it more difficult for smaller retailers to run e-negotiation events?

According to Wikipedia a third-party logistics provider (abbreviated 3PL) is a firm that provides outsourced or “third party” logistics services to companies for part, or sometimes all of their supply chain management functions. Third party logistics providers typically specialize in integrated operation, warehousing and transportation services that can be scaled and customized to customer?s needs based on market conditions and the demands and delivery service requirements for their products and materials.

As such, there are a number of types of SPL?s within retail that may in fact service a single retailer. All might fall under this umbrella including wholesalers such as SUPERVALU, collective buyers such as TOPCO or even a retailer collaborative that may in fact just coordinate aggregated purchases and in fact pick other 3PL?s to provide warehousing, picking and packing and distribution. Each of these providers may in fact provide some or all of the same services and also may all be in play at an individual retailer. The later or collaborative of multiple retailers might even be looked at as a non asset based 3PL.

In all categories of third party logistics providers however it is still the end user or retailer regardless of size that determines what products they buy and accept delivery of in their stores. As such, it should be no more difficult for smaller retailers to run e-negotiation events? There will need to be discussions as to costs that are purely associated with the warehousing, slotting, picking and distribution of products by a 3PL once an e-negotiation event has been planned, but these items should be easy to break out for bid or add to the final pricing prior to award of business as a flat fee. This is a practice that all 3PL?s should be familiar with already. Retailers should anticipate that their existing 3PL depending on services offered would rather not have you conduct these types of events as it negatively impacts their volumes with manufacturers and other providers and as such their company?s margins.

Understanding your options and the flexibility that 3PL?s can provide may actually make it easier for all retailers to use e-negotiation tools to impact their bottom line.

We look forward to and appreciate your comments