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?

This author does not 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 goal will continue to be to save tour customers as much money as possible in the shortest period of time possible while also improving quality and mitigating risk associted with lapses in safety . We continue to believe that is the best practice of all.

We look forward to and appreaciate your comments.

What is melamine? Melamine is a small, nitrogen-containing molecule that has a number of industrial uses and is not approved for direct addition to human or animal foods marketed in the United States.

According to the FDA, in food products other than infant formula, the FDA concludes levels of melamine and melamine-related compounds below 2.5 parts per million (ppm) do not raise health concerns. This conclusion assumes a worst case exposure scenario in which 50% of a person?s diet is contaminated at this level, and applies a 10-fold safety factor to the Tolerable Daily Intake (TDI) to account for any uncertainties. The TDI is an estimate of the maximum amount of an agent to which an individual could be exposed on a daily basis over the course of a lifetime without an appreciable health risk.

As the melamine in milk products from China problem continues to grow apace, Sciencebase presents a succinct list of melamine contaminated food list culled from the most recent news results on the subject. This is by no means an exhaustive list nor is it a condemnation of any particular products; it?s here merely to raise awareness of what is happening with regard to the melamine in milk scandal.

? Powdered baby milk.
? HK finds melamine in Chinese-made cheesecake.
? Cookies With Melamine Found in Netherlands.
? Mr Brown coffee products.
? Manufacturing giant Unilever recalls melamine tainted tea. CNN is also reporting that the Hong Kong authorities Sunday (October 5) announced that two recalled candy products made by British confectioner Cadbury had high levels of melamine.
? Melamine Detected in Two More Ritz Snacks.
? More Chinese-made sweets recalled in Japan.
? White Rabbit brand Chinese candy contaminated: Asian health officials.
? Lipton, Glico and Ritz the latest businesses to be affected by milk powder scandal.
? Hong Kong finds traces of melamine in Cadbury products.
? Recalled Melamine Milk Products include Asian versions of Bairong grape cream crackers, Dove chocolate, Dreyers cake mix, Dutch Lady candy, First Choice crackers, Kraft Oreo wafer sticks, M&Ms, Magnum ice cream, Mentos bottle yoghurt, Snickers funsize, Yili hi-cal milk, Youcan sesame snacks and others. Testing of some of those has already proven negative.
? Melamine Found in More China-Made Products, including Heinz DHA+AA baby cereal.
? 305 Chinese dairy-based products temporarily banned in Korea.
? US bloggers have gone so far as to uncover dozens of products recalled in China that were still on the shelves of their local supermarkets.
? 31 new milk powder brands found tainted.

With the above knowledge, procurement professionals should also make it part of their normal information gathering of RFI process to ask where the products they are buying come from, particularly if you buy from a distributor or broker. In addition, have this document signed by the supplier. Further, you should specifically ask the following question. Do any of your products to your knowledge contain Melamine or any other additives that are not approved by the FDA and other governing bodies.. Although not a scientific solution, it does protect one more level of protection for you and your customers.

We appreciate and look forward to your comments.

The FDA opens and office in China and Melamine shows up in U.S. baby formula. Should we be concerned?

The FDA has taken a positive step in trying to control the introduction of products that should not be included in food from reaching U.S. markets by opening an office in China. At the same time we hear that Melamine has been found in U.S. baby formula. This is a time that procurement professionals in the food distribution business need to be vigilant.

The following is for your education.

Just what is Melamine? According to Wikipedia, Melamine is an organic base and a trimer of cyanamide, with a 1, 3,5-triazine skeleton. Like cyanamide, it contains 66% nitrogen by mass and, if mixed with resins, has fire retardant properties due to its release of nitrogen gas when burned or charred, and has several other industrial uses. Sounds like something we should be including in our food products right? Further from Wikipedia, Melamine is sometimes illegally added to food products in order to increase the apparent protein content. Standard tests such as the Kjeldahl and Dumas tests estimate protein levels by measuring the nitrogen content, so they can be misled by adding nitrogen-rich compounds such as melamine.

Here?s what?s possible when Melamine is ingested.

The following information is taken from a Monday October 20th Yahoo news article By Gillian Wong a writer for the associated press.

Beijing ? Some 1,500 dogs bred for their raccoon-like fur have died after eating feed tainted with melamine, a veterinarian said Monday, raising questions about how widespread the industrial chemical is in China’s food chain.

The revelation comes amid a crisis over dairy products tainted with melamine that has caused kidney stones in tens of thousands of Chinese children and has been linked to the deaths of four infants.

Melamine was also the product that caused the massive United States pet food recall during 2007. When discussing toxicity, Wikipedia tells us that Melamine is described as being “Harmful if swallowed, inhaled or absorbed through the skin. Chronic exposure may cause cancer or reproductive damage.

Tomorrow we?ll take a look at the products that are purported to contain Melamine and the questions procurement professionals should ask in order to best mitigate your risk.

We appreciate and look forward to your comments.

What does it mean to go Green? I was reading the Aberdeen white paper Building a Green Supply Chain from March of this year and believe they may in a concise format have the best glossary of definitions as to the meaning of and impact on what it means to be Green. Their short but effective green glossary defines the following terms.

1. Corporate Social Responsibility (CSR) posits that companies have a responsibility to be social and environmental stewards and that having a positive impact on society and the planet is as important as profit.
2. Green refers to practices, processes and products that have a minimal impact on the health of the ecosystem. The emphasis is on non hazardous recyclable, reusable, and energy efficient products and processes.
3. Sustainability ensures the ability to meet present needs and profits, today, without compromising the ability to meet them tomorrow.
4. Triple Bottom Line (TBL) determines that business has positive impacts on the three P’s: people, profit and planet and is a standard framework for CSR agendas.

It might be interesting to ask CEO’s around the country if they agree with these definitions. Many probably do. The answer would however be a good indicator of a company’s commitment to being Green and not just caught up in green wash.

Yesterday Wal-Mart and Costco announced better than expected results for their past quarter and the stock market was delighted. What if their results had not been as good and same store sales were flat? But concurrently the companies offered guidance of the significant and positive impact they are having on the evolution of a green supply chain. Would Wall Street have reacted in the same way? Personally I think it highly unlikely.

The great news is that every day more and more emphasis is being placed on this subject by companies of all sizes.

We value and look forward to your comments.

What does it mean to go Green? I was reading the Aberdeen white paper Building a Green Supply Chain from March of this year and believe they may in a concise format have the best glossary of definitions as to the meaning of and impact on what it means to be Green. Their short but effective green glossary defines the following terms.

1. Corporate Social Responsibility (CSR) posits that companies have a responsibility to be social and environmental stewards and that having a positive impact on society and the planet is as important as profit.
2. Green refers to practices, processes and products that have a minimal impact on the health of the ecosystem. The emphasis is on non hazardous recyclable, reusable, and energy efficient products and processes.
3. Sustainability ensures the ability to meet present needs and profits, today, without compromising the ability to meet them tomorrow.
4. Triple Bottom Line (TBL) determines that business has positive impacts on the three P?s: people, profit and planet and is a standard framework for CSR agendas.

It might be interesting to ask CEO?s around the country if they agree with these definitions. Many probably do. The answer would however be a good indicator of a company?s commitment to being Green and not just caught up in green wash.

Yesterday Wal-Mart and Costco announced better than expected results for their past quarter and the stock market was delighted. What if their results had not been as good and same store sales were flat? But concurrently the companies offered guidance of the significant and positive impact they are having on the evolution of a green supply chain. Would Wall Street have reacted in the same way? Personally I think it highly unlikely.

The great news is that every day more and more emphasis is being placed on this subject by companies of all sizes.

We value and look forward to your comments.

To all of the retailers that provide the products we buy. To all of the suppliers that provide retailers with these products. To all their familes and friends and to ours, SafeSourcing wishes you all a safe and happy Thanksgiving

More on this next week.

If you wish to host a successful reverse auction a robust supplier database is key to encouraging competitive bidding. A logical focal point for hosting a competitive auction is to assemble all of your present vendors for a particular category that you hold in good standing. These are suppliers from whom you have sourced products using traditional means in the past. In general the principal is the more vendors or suppliers that participate, the better your potential results. This however also requires strategic thought because you are beginning a process that you want to use on a recurring basis. As such inviting the same suppliers again and again may seem to make sense, but may not encourage the results you are looking for. This is a critical reason why it is important to have the most robust supplier data possible available for your review. If you can only find six local suppliers for a particular auction, they will all most likely agree to participate the first time. However a key issue to consider is what will encourage them to participate the next time and after that? Suppliers will almost always not be the same size. As such the smaller vendors will most likely bid early and drop out after the early rounds. These suppliers will most likely not agree to compete in the future as they consider their chance of winning the business unrealistic. Suppliers that finish first or second or incumbents that are displaced will agree to participate again, but lack of competition will make the auctions less successful.

A logical question would then be. If we only have six suppliers available how many should we invite to participate? Should we invite them all? Every company will answer this question differently. When considering the future, do we want events or do we want continual process improvement that drives continuous savings. There are several possible solutions to consider. First, only invite four participants to begin with. This will create a competitive environment for your auction. Let?s assume that in twelve months when you repeat this auction that the two largest suppliers agree to return. You could now invite supplier?s number five and six that were not included in the original auction. You have now created a competitive auction for the second year or cycle. A second thought might be to not invite all of the largest suppliers to your first auction, in order to manage the quality of your suppliers for future auctions. This type of critical thinking supports continual process improvement in e-procurement implementations.

We appreaciate and look forward to your comments.

Customer satisfaction may be as important as company net profitability. That is if you want to continue to grow the later and maintain your customer base.

If your customers are satisfied they will continue to shop in your stores. As a result, you can continue to grow wallet share for that customer base. Depending on each deciles percentage of sales and margin contribution it is safe to assume that loss of a single customer in your top deciles to competition or dissatisfaction can have a huge impact on the bottom line of retailers in an industry that lives in a one percent net profit world. Customers today care about environmental sustainability and if the perception is that your company does not consider this in their sourcing practices, that customer may well decide to shop somewhere else.

So, what does all this have to do with e-procurement? Actually, quite a bit. I was reading one of my favorite blogs on sourcing at Sourcing Innovation titled A Field Guide to Green Sourcing II. The author (the doctor) reviews Deloitte?s Six Step Strategic Green Sourcing Process. Although the entire process deserves review and a nice job is done by the doctor to that end. Of particular interest to this author is step number three listed below?

#3 Supply Market Assessment: In addition to the identification of potential sources of supply, an intense effort is made to identify and assess vendors who specialize in sustainable products and services. Don’t overlook the smaller, nimble, vendors, as they are often innovation leaders on the forefront who can offer insights into the latest technologies, methods, and processes above and beyond what your large, legacy, manufacturers may be able to provide

This author has been an advocate of exactly this point , and has discussed the same in a number of blog posts over the last six months. Here’s an early one from May. The issue is that although this may be a goal of your company; how will your company monitor these potential new sources of supply for compliance? I would advocate that there is a need for a supplier database that contains as many possible new sources of supply as possible and that those suppliers be held accountable to sustainable standards as a by product of inclusion in the database. The largest and to this authors knowledge only database available to retailers today that accomplishes this objective in it?s entirety is the SafeSourceIt? North American supplier database comprised of over 250,000 North American retail suppliers.

We appreciate and look forward to your comments.

Quality e-procurement quickly in a time of heightened Corporate Social Responsibility (CSR)

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. First among these is the recognition that effective e-procurement initiatives like any successful program requires strong support from executive management. This is important because Retail as an industry 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, CFO, CLO or CPO sponsorship is critical. Once this directive has been issued, the next step is to identify savings targets across all corporate spend categories. Once these targets are identified and ranked, a category specific attack plan can be developed that best maximizes savings opportunities. 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.

However, 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 you can?t maintain. At a high level, the following steps will insure that you are headed down the right path.

Identify all opportunities
Develop a total company strategy
Source qualified suppliers
Negotiate final terms
Award of business
Contract completion
Results Analysis

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.

I look forward to your comments.