This author believes that to many e-negotiation programs fail because their strategies are not well thought out in advance of the execution stage.

The following are some practical thoughts that companies should consider which will take their e-negotiation program well beyond tactics to create a sustainable process going forward.

Category discovery is the basis of any quality implementation of an e-negotiation strategy. It is essential that this process begin with a company?s executive management?s sponsorship. This process will include working with all category managers, buyers and other procurement knowledge workers to uncover opportunities suitable for e-negotiation tools such as Requests for Information (RFI), Proposals (RFP) and Quotations (RFQ). A fundamental requirement for any successful category discovery process is an adequate source of suppliers interested in participating in e-negotiation events regardless as to whether they impact cost of goods or the expense line. Suppliers can then be vetted against product specifications and incumbent suppliers gathered during the during the discovery process. The success of this process may and probably should also include store visits, distribution center visits, supplier visits, product evaluations, contract reviews, spend data collection and other related information necessary to completely understand specific category dynamics. Any process is only as good as its original goals set to determine an events success. These factors that may go well beyond simple price reduction such as impact on quality, finding secondary sources of supply or cost avoidance. Analysis of these success factors and areas of improvement which have been properly benchmarked to the original goals included during the discovery and resulting category to market strategy will drive a sustainable process and as such may well be the most important step after an e-negotiation event has concluded.

As always we look forward to and appreciate your comments

As our 44th President of the United Sates Barrack Obama promised so often during his campaign, all things including Food Safety are open to review under his administration.

From this author?s perspective, it?s about time. One of the great frustrations that many citizens suffer endlessly with the government is bureaucratic back talk and promises of what?s to come. If the present administration can have an impact on food safety, this author welcomes it even though I did not vote for the democratic ticket.

An article in USA TODAY by Elizabeth White is titled Obama promises ?complete review? of FDA operations and a by line of Congress to take look at outbreak of Salmonella. In the article our new President discusses that one of his daughters eats peanut butter every day for lunch and he does not want to worry whether she is going to get sick from her lunch. Amen to that.

Further, the article goes on to state that Congress appears to agree and the Senate Committee on Agriculture, Nutrition, and Forestry will hold a meeting this week on food safety oversight.

We already know that over 550 people have been taken ill and as many as eight people have died from this outbreak. This is the 2nd largest outbreak in decades trailing only last years outbreak associated with tomatoes and peppers which affected over 1000 people.

This author has offered many suggestions as to possible solutions to the issue of food safety that range from traceability to best practice scorecards that hold suppliers accountable to a variety of safety programs from ISO to GFSI. If it takes the new administration to drive the desired level of focus on this issue, so be it.

As always we look forward to and appreciate your comments.

That is if you want to drive the greatest possible savings across the broadest range of categories in the shortest amount of time; and have a sustainable process moving forward.

The question one needs to ask is; what type of event services does my e-procurement provider offer? If your company is deciding to try self service, which is to be 100% self-sufficient, you need to know if your provider offers readily available classroom education that can be conducted on-site in order to train your team in all the nuances of event support. These skills are the foundation that allows e-procurement providers to support large volumes of events in a full service mode, which drive greater savings over the long term. Knowledge transfer in this area is one thing; the passion, skill and headcount to carry out these practices on a day by day basis are what drive results.

Typically event services falls into two broad categories:

1. Event management
2. Event monitoring and support.

Event management provides end to end e-sourcing support that begins with a companies overall strategy and ends with the actual execution of the e-procurement event. This is a true cross category effort that includes a rather lengthy list of services that may include buyer training, supplier selection, category discovery, supplier communication, the strategy for taking a category to market, training and overall supplier expectation management.

Event monitoring and support is actually the tactical implementation of the over all e-procurement event management process. This may include all communications with suppliers on the day of an event including making sure they have access to the system, get logged in properly, don?t have problems placing quotes, monitoring supplier and buyer system communications techniques during an event such as notes and texting and being available post event for questions as needed.

These services are normally provided by people behind the scenes with a very specific skill set. If you plan to do self service it would be very wise to make sure you have them covered at the same quality level.

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

Who has the time to monitor their supplier?s safety performance?

When we think about safety and eco standards in the supply chain, I honestly believe that all companies say quietly to themselves; how are we supposed to monitor this with everything else we have to deal with in procuring products?

I have written on this subject before, and as a TQM ands Six Sigma advocate, believe in the statement that you can not manage something that you do not measure.

The issue becomes more complex when you consider that data is required from your organization relative to the historical performance of existing suppliers, data from the supplier as to their own assessment of their historical performance and finally external data that neither may have at their finger tips.

When we talk about safety, the question that retailers need to ask suppliers is pretty simple. What certifications do you carry relative to food safety such as Safe Quality Foods (SQF), Global Food Safety Initiative (GFSI), American Humane Certified and many more? Another area to question should be regarding USDA and FDA inspection history.

Although Green Initiatives fall into the social consciousness area of a company, there are a variety of questions that can be asked in this area as well such as Green Seal, Eco-logo and Green Star certifications and participations.

It may be easier for retailers to rely on their e-procurement providers for this data if the provider has it included in their supplier database or some other knowledge source. Pre-populated e-procurement templates can act as a form of scorecard for existing suppliers and potential news sources of supply. This is actually a type of automated RFI process which can save companies a lot of work and time when trying to find additional sources of safe and eco friendly supply or when trying to drive cost down with existing suppliers. These data may also help to protect retailers from harmful litigation when products end up not being as safe as promised.

Can your e-procurement provider provide these types of data on demand as a normal byproduct of your standard e-procurement process at no additional cost? Ask them?

We appreciate and look forward to your comments.

During today?s travels while waiting and waiting in Airports to travel east from Ohio, I had the opportunity to read several interesting articles related to the supply chain that retailers and suppliers need to pay close attention to.

SafeSourcing focuses on procurement optimization with an emphasis on people, processes and tools. While we ultimately drive cost compression that result in significant bottom line improvement through the use of world class business to business negotiation tools. With that in mind it is important to mention that we are also dedicated through this process to providing these results to companies while also insuring a laser like focus on product safety.

The first article referenced above appeared on the front page of the of the USA TODAY Money section by Elizabeth White and Julie Schmitt and was titled FDA: Salmonella detected before. To summarize the article, the most recent Salmonella out break may be a result of a company that sells products not complying with regulations that are in place to protect consumers. In the article, the FDA reports that there were records of 12 instances in which the company found Salmonella in finished products and shipped them anyway. Over five hundred people have already been taken ill during this outbreak and unfortunately as many as eight people have died.

This poses a consumer related question. As a consumer would you like the companies where you shop to buy their finished goods from suppliers or wholesalers that use these companies? raw materials? You might need to bet your life on it. How would your retailer know not to buy finished products that contain tainted ingredients? How would their wholesaler know not to buy products from a manufacturer that used products from the producer whose products were tainted? How would the manufacturer know? The harsh reality is that takes to much process to trace the outbreak to its source of origin and ensure safety to the rest of the population.

This author has long been an advocate of safety in the supply chain and a traceable database with safety certifications in place by all supply chain members back to the source of origin and supported by a process that vetts suppliers for adherence to those certifications. In a July post I offered the following, ?According to the CDC as of July 10th 2008 the number of those taken ill as a result of the St. Paul Salmonella outbreak had raised to more than 1000 people in forty two states and Canada. According to federal officials at the time, this was now the largest food-borne illness outbreak in decades?. Well here we are just 6 months later with over 500 people in 43 states affected and eight dead. So will this be the 2nd largest outbreak in decades or are we not done counting yet? This time we only had to wait six months for another large outbreak versus decades. This is scary stuff. It taxes our medical community, strains our federal agencies, and negatively impacts productivity in the work place.

At the end of the day, who is culpable when some one dies from one of these outbreaks? It certainly seems to me that consumers would hold every organization in the supply chain that did not have proof of direct efforts to ensure safety in their procurement process responsible.

This author has offered a number of practical solutions to this problem during the last year that are proactive and make common sense. I?d appreciate your comments as to any new ideas that we might collaborate on. Our supply chain and consumers deserve our best effort.

During today’s travels while waiting and waiting in Airports to travel east from Ohio, I had the opportunity to read several interesting articles related to the supply chain that retailers and suppliers need to pay close attention to.

SafeSourcing focuses on procurement optimization with an emphasis on people, processes and tools. While we ultimately drive cost compression that result in significant bottom line improvement through the use of world class business to business negotiation tools. With that in mind it is important to mention that we are also dedicated through this process to providing these results to companies while also insuring a laser like focus on product safety.

The first article referenced above appeared on the front page of the of the USA TODAY Money section by Elizabeth White and Julie Schmitt and was titled FDA: Salmonella detected before. To summarize the article, the most recent Salmonella out break may be a result of a company that sells products not complying with regulations that are in place to protect consumers. In the article, the FDA reports that there were records of 12 instances in which the company found Salmonella in finished products and shipped them anyway. Over five hundred people have already been taken ill during this outbreak and unfortunately as many as eight people have died.

This poses a consumer related question. As a consumer would you like the companies where you shop to buy their finished goods from suppliers or wholesalers that use these companies’ raw materials? You might need to bet your life on it. How would your retailer know not to buy finished products that contain tainted ingredients? How would their wholesaler know not to buy products from a manufacturer that used products from the producer whose products were tainted? How would the manufacturer know? The harsh reality is that takes to much process to trace the outbreak to its source of origin and ensure safety to the rest of the population.

This author has long been an advocate of safety in the supply chain and a traceable database with safety certifications in place by all supply chain members back to the source of origin and supported by a process that vetts suppliers for adherence to those certifications. In a July post I offered the following, “According to the CDC as of July 10th 2008 the number of those taken ill as a result of the St. Paul Salmonella outbreak had raised to more than 1000 people in forty two states and Canada. According to federal officials at the time, this was now the largest food-borne illness outbreak in decades”. Well here we are just 6 months later with over 500 people in 43 states affected and eight dead. So will this be the 2nd largest outbreak in decades or are we not done counting yet? This time we only had to wait six months for another large outbreak versus decades. This is scary stuff. It taxes our medical community, strains our federal agencies, and negatively impacts productivity in the work place.

At the end of the day, who is culpable when some one dies from one of these outbreaks? It certainly seems to me that consumers would hold every organization in the supply chain that did not have proof of direct efforts to ensure safety in their procurement process responsible.

This author has offered a number of practical solutions to this problem during the last year that are proactive and make common sense. I’d appreciate your comments as to any new ideas that we might collaborate on. Our supply chain and consumers deserve our best effort.

According to Wikpedia 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.

So 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 e- procurement. Or does it mean they are the best practices for just their product family?
I don?t believe that 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 must evolve over time as tools, businesses, and existing processes change.

If one uses best practices, should not the result 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 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 these companies? best practices. 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 and changed when 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.

We will continue to call our services offerings 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.

As always we appreciate and look forward to your comments.

Most companies understand that lowering their cost of goods provides the greatest benefit to their bottom line, but they face significant challenges in trying to do so. So, why do some companies succeed while others continue to implement program after program with no measurable benefit.

A primary reason is the recognition that effective e-procurement initiatives like any successful program requires strong support from executive management. This is more important in Retail, because as an industry Retail lags well behind other industries in utilization rates of e-procurement tools. So at a minimum in order to get off on the right foot, this typically means the CEO, COO, CFO, CLO or CPO sponsorship is critical. Once an official directive has been issued, the next step is to identify savings targets across all corporate spend categories. This sounds like a simple task. Ask someone in procurement what their top five spend categories are, what contracts are expiring and what auto renewal clauses are in place. You might be surprised at the lack of answers. Working with solution providers can help to rapidly identify these targets and rank them. Your solution provider can also offer a category specific attack plan that best maximizes savings opportunities. Having historical data is critical to these steps being successful. It is important to note, that savings alone do not create a successful e-procurement 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.

A key challenge for any procurement organization directed to implement e-procurement 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 steps will insure that you are headed down a successful path.

Identify all spend opportunities in the next 180 days
Review all contracts due to expire in that timeframe
Assemble a list of primary and secondary suppliers for each category
Develop a total company strategy
Source at least 5 new qualified suppliers
Evaluate suppliers versus your companies CSR initiatives
Document product specifications
Provide clear terms
Award business within 30 days of event completion
Complete Contract with 60 days
Analyze Results

Most quality e-procurement organizations have well developed plans that will aid you in implementing your best practices while maintaining quality and supporting your CSR initiatives.

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

As retailers and other companies struggle with the current tough economic conditions, do green initiatives suffer? If they do, is there a long term cost?

This author believes that it is in the toughest of times that those committed to their Corporate Social Responsibility initiatives should get tougher about making sure that their trading partners are adhering to the same strategies.

Unfortunately, not many companies have adopted Triple Bottom Line accountability or (TBL) which is a measurement that determines if businesses have a positive impact on the three important areas of people, profit and planet or the three P?s, even though it has become the standard framework for CSR agendas.

I have not heard one single analyst when speaking of the present economic condition give credit to any company relative to CSR initiatives if their earnings are below expectations. After all it is about the money, and if the earnings are not in line with expectations, jobs are lost, stock prices suffer and excuses galore flow freely.

We all know that green initiatives are expensive and the benefits may or may not be realized for years. So, this might be the ideal time to put projects on the back burner for companies that are struggling. Or it might be the time to make sure that all suppliers you have been doing business with for two or more years are continuing to adhere to the same types of initiatives that you are. A simple review of their strategies when you place your next order can be as simples as asking some of the following questions.

1. I know things are tight right now, but can you tell me what your company is doing relative to green initiatives.
2. Are you doing anything to reduce your use of water?
3. What are you doing to insure that toxic ingredients are not in your products
4. What are you doing to reduce packaging?
5. What are you doing to eliminate hazardous materials?
6. Are you doing anything with organic ingredients?
7. Are you using any form of renewable energy?
8. How are these initiatives going to impact your cost structure today?
9. How are these ititntitves going to impact your pricing tomorrow?

The answers to these and other questions you may come up with can help you understand the smart companies to source your products from. The companies that support your CSR initiatives with theirs. Armed with this information the next step is to make sure your consumers and employees are also aware of what you and your trading partners are doing to support the environment they work and live in. More on that later?..

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

As a result of the most recent Salmonella outbreak, there has been renewed activity from congress to reform food safety laws. The FDA?s lack of authority to order a recall of products versus asking companies to do so is just one example of the type of issues driving this activity.

This author does not necessarily agree that the government needs to be involved in regulating these issues because they generally tend to overreact, which can have a negative impact on the many individuals and companies associated with the traceability chain affected by this type of oversight.

Problematic to coming to a rapid determination of cause in these types of outbreaks is the lack of a traceable supplier and product database that all parties in the supply chain adhere to.

Traceability matrices can be easily established using a variety of tools including requirements management software, databases, spreadsheets etc.

A traceability matrix is created by associating requirements with the work products that satisfy them. Tests are associated with the requirements on which they are based and the product tested to meet the requirement.

Present food traceability standards call for one forward one back reporting. As such, let?s take a look at the first step in forming a traceability matrix as it applies to the most recent Salmonella outbreak. And, why one forward one back is a problem.

The following is a very simple example of ten possible traceable elements that could be associated with the most recent salmonella outbreak. Each individual element could contain a tree of it?s own that delays the FDA and other organizations from quick resolution.

1. Seed crop
2. Farm
3. Peanut Corporation of America
4. The Kellogg Company
5. Multiple Products
6. Multiple Wholesalers
7. Multiple Retailers
8. Multiple Consumers
9. Spread
10. Family & Friends

Let?s assume that the first person taken ill came from category ten, friends and family. This individual consumed a tainted product made with the peanut paste that contained Salmonella. Where was the product consumed? In fact, what product was it? Was it consumed at home, at school, at work or maybe at a friend?s house?

We can get to one back once we?ve determined the source of the actual illness. Then we can proceed to the next element of the matrix which could be multiple retailers who may have sourced the product from multiple distribution channels such as distributors, wholesalers, collective buyers etc.

This becomes a vicious cycle pretty quickly. It might be at this point that the government would call for a product recall. We?ve seen the negative impact that can have on the entire retail supply chain. A better action for congress would be to mandate that a data repository be developed that follows a product from seed crop in this example to the consumer.

There must be a grant out there somewhere for this type of effort.

As always we look forward to and appreciate your comments.