Methods that a company may explore in order to get energy costs under control.

June 5th, 2015

Let’s take a look at methods your company can explore to control energy costs.

 

Today’s post is by Ryan Melowic, Sr. Director at  SafeSourcing.

For companies with numerous locations, the need to reduce utility costs and improve facility efficiency is very important in order to remain competitive.  Reviewing utility bills and purchase negotiations are labor intensive and often outside the scope of most accounts payable departments.  Therefore, there are other methods your company can explore.

One method to get your company’s energy cost under control is to identify potential companies that can provide complete management of Utility Bill Processing and Analysis tasks so their clients are able to focus on proactively driving cost savings and facility efficiencies. Utility Bill Processing and Analysis provides a fully outsourced payment solution with detailed data capture, robust reporting and best in class analysis capabilities. These companies consolidate thousands of invoices into one simple invoice for their clients to process and then can provide an automated feed of data to your company’s accounting software. Clients can therefore better track how each location manages energy costs and consumption.

Another method for reducing energy costs is to identify potential companies that can manage setting up or closing out utility services.  Energy Supply Management companies can insure that your company is starting out with the right rate schedule for the size of your business as well as negotiating to waive or lower opening deposits.  These companies will also work to ensure all deposits or refunds are credited appropriately.    In addition, ensure the locations that are closed are no longer being billed.

Additionally finding companies that will combine and tender your company’s energy requirements to a preselected group of large-scale energy providers for multiple-year increments will help reduce your company’s energy costs. They will then choose the most beneficial energy provider based on specific value-added criteria including;

•   Lowest price
•   Rate of margin attracted by the wholesaler on a per kWh and per GJ basis for any new Energy client that may come on board after the aggregated purchases
•   Reliability and accuracy
•   Detailed billing and consumption data feeds

Weather you explore one method or all of the methods, SafeSourcing can create for your company a RFP that will compare service and pricing structures.  We will than normalize the data and compress the pricing of the potential vendors.

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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Drafting the perfect Procurement Supplier Team….

June 4th, 2015

How can the strategies used by millions of rabid NFL fans be wrong?

 

Today’s post is our SafeSourcing archive

Over the next two weekends, scores of NFL fans will be coming together to reenact the most important moment of their sports lives for the year….the fantasy football draft.  This is the time where seasons are made or broken based on the selection of real football players in a make believe environment.

If you are one of these people, you are now instantly connected to this blog and if not, you now probably think both I and fantasy football are stupid but read on as I put it in the perspective of the procurement world.   Both worlds may make a little more sense when we’re done.

Beware of the rookies – One of the biggest risks someone can take in putting together a lineup of real NFL players to compete for fake fantasy points based on their individual performances is to draft a first year player. They are unproven and usually come with nothing but potential and risk. In much the same way, unproven, unknown vendors who try to buy your business constitute a similar risk.   These vendors promise the world of potential and often come at bargain prices only to disappoint and fail on delivering their potential.  Therein lies the risk because in some cases (read that C.J. Spiller, Arian Foster) the rookie not only pans out but delivers at levels few veterans can.  Research the company, research the solution, research their history and then know the risk you are taking.

The changing team – Every fantasy football owner I know would love to put out Requests For Information to each NFL team every summer.  If they did this is what they would ask: “Are there any major changes in management expected in the next 6 months?”;  “Do you plan on having a major shift in offensive mission statement before the season starts?”;  “Are you looking to acquire new talent that would affect how you do business in the next 3 months?”  The reason these types of questions would be important is because they affect the value of the services they are looking for from a player in much the same way companies like to include these types of questions when determining the value of a solution they are interested in.  By itself the solution may be a leader but unfortunately changes to that vendor’s infrastructure can render a terrific component useless.

The handcuff – Fantasy Football owners, please skip down in this block while I explain the concept of the handcuff.  The handcuff is a player who is the backup of a major starting player on a football team (usually a running back) that people draft when they already have the starter on the team and they want insurance of also having the backup in case anything happens to the starter or the starter does not perform according to expected levels.  When you have both, you have security in the same way procurement professionals like to have the security of a primary and secondary supplier for mission critical categories.  Having a backup to take over for your primary player/supplier gives you the flexibility and security to focus on other areas that need more attention.

At SafeSourcing we pride ourselves on trying to view procurement projects from different angles as well as the traditional and successful approaches and hope you enjoyed today’s “out-of-the-box” comparison to a very popular activity.  We hope to get a chance to show some of this creativeness for your companies.  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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If it ain’t broke……

June 2nd, 2015

How do you determine when change is needed and when status quo should be maintained?

 

Today’s post is our SafeSourcing archive.

While eProcurement technologies aren’t new, it is surprising how new of a concept they can be to some very large companies.  As with any new technology and process, the perception of the change that must come as a result can be a bit skewed.  Good solutions will dictate how much change is necessary by evaluating how well things are working today.

In today’s blog, we will be looking a few situations and where new eProcurement strategies can fit to leverage what you are currently doing today.

Improving what works – Companies don’t get big by having broken processes in every aspect of their business, so it stands to reason that there will be many good ways of procuring goods and services that they are using today.  If, for example, there is a process in place for purchasing equipment for every regional office that works, what may be needed is a process that helps bring in some additional vendors, products and services to evaluate and then to provide the means by which the best value can be achieved for an award.  As indicated below, there will be processes that need more help, so for the ones that don’t, focus on broadening the selection pool and getting the best value so that decision can be realized as soon as possible.

Managing what works – There are always spend categories where things are generally working, just in 100 different ways across all offices.  When you have 50 different locations all using different vendors, tools and processes a good first move can be to let the locations continue business as usual but bring in a vendor to help manage what all 50 locations are doing, monitoring the activity and controlling the expenses and savings.  A good eProcurememt solution will assist with getting the vendor pool to select from to handle the management realizing value immediately by assuring things run smootghly.

Consolidating what works – Sometimes organizations need more than someone to manage what they are currently doing; they need consolidation of those vendors in a way that leaves their processes in tact but begins to leverage the value that comes with more volume and smaller numbers of vendors to have to manage relationships with.  The important thing in projects like these is to understand the current landscape so that in consolidating what works, “what works” doesn’t get lost in the process.  This can be achieved with internal polls of the locations and external polls to the current vendors supporting the business today.  Once this information is captured the plan for consolidation becomes much clearer.

For more information about how we can assist with sourcing your needs without changing what works for your company, please contact a SafeSourcing Customer Service Representative.

We look forward to your comments.

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Toilet Paper…Who needs it?

May 29th, 2015

Do you know exactly what your usable paper product spend is?

 

Today’s post is by Alyson Usserman, Project Manager at SafeSourcing.

Usable Paper Products can result in a massive spend category, does this sound like your company?

Usable paper products can be a company’s highest spend category because it typically goes unmonitored. If you are a retailer with public bathrooms, you could be paying hundreds of thousands  of dollars a year  to maintain the usable products within the bathrooms.

When sourcing usable bathroom products and toilet paper, the specification can be pretty standard depending  if you utilize coreless toilet paper rolls or not. Sourcing bathroom products can still be complex depending on the nature of the spend. Are you currently using more than one supplier? Can your janitorial staff couple this with their supplies and lower the cost of their services? Do you have space to store the additional cases.

These questions become vital when sourcing usable products like toilet paper. Are you over paying?

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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Why is the cost of Beef so high this year?

May 28th, 2015

With summer fast approaching, barbecuing is on lot of families’ minds and so is the cost of beef.

 

Today’s post is by Gayl M. Southard, Administrative Consultant for SafeSourcing.

In today’s blog, Gayl discusses the reason for the high cost of beef this year.

With summer fast approaching, barbecuing is on lot of families’ minds.  Because of the drought of 2012 in the Midwest, backyard cooks can blame the increase price of beef this grilling season.  The average price of sirloin is up 20 percent from last year.  An 8-ounce filet mignon is approximately $15 more at some Kansas City area stores.  Two pounds of lean ground beef may cost a few dollars more than a year ago.  Although beef is pricier, it’s hard to resist the smell of beef on the grill!

Many cattle farmers decreased their herds two or three years ago when the grasslands dried due to drought conditions.  Cattle, unlike fast growing chicken and pigs, require three years from breed to slaughter.  The gestation for a cow is nine months to deliver a calf.  We are about a year and half away from the price of beef to show a reduction.  This is good news to the cattle farmers, as they can reap the rewards of the higher price of beef now.

According to Tampa Bay Times, dated May 13, 2013, “’A year ago last November, for 350-pound calves I paid $1.80 a pound,’” Mc Intosh said.  “’Today, I might pay $3 to $3.50” a pound’”.  Cattle farmers have been trying to satisfy pickier consumers since the 1980’s when the shift from beef to poultry shifted.

Fortunately, if you prefer pork or chicken, those prices have barely increased, in fact bacon, on average, is cheaper.

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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Most of the time the devil is in the detail

May 26th, 2015

There may be mandatory taxes that you have to pay that can vary greatly state by state!

 

Today?s post is from our?from our ?SafeSourcing?archive.

When you are planning out purchases, whether it?s for a business or a personal purchase,? for most people and companies it is planned out as part of a budget.? Just looking at the price tag can give you a false sense of security as to what you are going to pay and ultimately blow your budget if you don?t plan for it properly. There are any variety of adders that you will have to take into account in order to fully set and adhere to your budget for any purchase.

Let?s take Van Trailers for example. The mandatory taxes that you have to pay vary state by state, and also vary by your company. For trailers, in the state of Ohio, manufacturers have to pay a 12% Federal Excess Tax upfront in order to sell a trailer to anyone in the State of Ohio and include that in their price.? You also have to know what your sales tax will be for the purchase. If you are using the trailer as a transportation company, sales tax will not apply to you.

At SafeSourcing we know what to ask and what to include in your scope of spend. We understand the tax issues and other types of duties mandated by the federal and state governments for specific industries.? For more information as to 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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Do you need a home warranty?

May 22nd, 2015

Do you own a home or are looking to buy one?

 

Today’s post is by Troy Lowe; Vice President of Development at SafeSourcing.

Do you own a home or are looking to buy one?  If so, you may want to consider purchasing a home warranty.  A home warranty covers numerous items around the house with a small service fee.  When you have an issue, you call the company and they will send out one of their approved service providers to diagnose the problem.  If the item can be fixed, the service provider will fix the item and if it cannot be fixed, then it will be submitted to the warranty company for replacement.  If this was a major component, such as a heating and air conditioning unit, having the warranty could save you thousands of dollars.  Below are a few items that may be covered by a warranty.

• Heating and Air Conditioning
• Water Heater
• Plumbing
• Electrical
• Appliances
• Garage Doors / Garage Openers

There are many companies out there that offer warranties, so be sure to read the contracts carefully and that you understand what items are covered and which are excluded.  If you would like some help finding the best warranty for your home, Safesourcing can gather all the necessary information for you and help you decide which option meets your needs.  If you would like more information on how SafeSourcing can help you, please contact a SafeSourcing Customer Service representative.  We have an entire team ready to assist you today.

We look forward to your comments.

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Procurement and you didn’t even know it!

May 20th, 2015

Even if you aren’t familiar with procurement, there is a good chance you are already doing it.

 

Even if you aren’t familiar with procurement, there is a good chance you are already doing it.

Today’s blog is by Margaret Stewart, Executive Assistant at SafeSourcing.

Recently, I had to make a trip to a large retail store – one of the large ones where it’s almost impossible to find what you need. With overcrowded aisles, long checkout lines, and no help if needed, I dreaded going there, even though this store consistently had the lowest prices on every item. But as much as I disliked going there, I had to go there because it was the only place that carried a particular item that I needed.

Now, there are several large chain retailers near me, ranging from clothing, to household goods, to groceries. Typically, I learn which stores are the best to purchase the particular items I need. I may go one place for dog food and Coca-Cola, and another place for dog bones and milk. I would make it to every store on some occasions, just to get the best deal on the items I required. Ultimately, I wanted to get the best value for my money. This is what procurement basically is.

But if the one chain store has the lowest price on everything I need, why don’t I get everything there?

This is where SafeSourcing procurement can help.  Just like I do, SafeSourcing procurement looks at more than just price; they look at overall value. Many like myself would spend a little bit extra to shop in a place that is comfortable, where there is help if needed, and that provides an enjoyable shopping experience, rather than a place where one feels lost and herded around like cattle. Businesses, too, would prefer to pay a little more for a better quality of service.

But there are cases like above, where only one place carries an item I need. This situation happens in business as well.  If the item I needed was available at any of these other stores, I would have gone there, even if it meant spending more money. Because this one store has a corner on the market, I must go there, but visits there are short, to the point, avoided when possible, and happen only when necessary. This company could potentially be getting all of my business, but they lack that little extra of customer service and get less business directly because of that. Quality customer services give businesses an edge over their competition, and this is where SafeSourcing excels.

For more information on how SafeSourcing raises the industry standard for customer service, how they can help you procure quality suppliers, or on our “Risk Free” trial program, please contact a SafeSourcing Customer Service representative. We have an entire team ready to assist you today.

We look forward to and appreciate your comments

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CONEG Legislation

May 19th, 2015

SafeSourcing supports the proper recycling, recovery and handling of waste associated with packaging.

 

Today’s blog has been written by Ryan Melowic Senior Director of Procurement Process Improvement at SafeSourcing.

SafeSourcing supports the proper recycling, recovery and handling of waste associated with packaging. Therefore, it is appropriate that we inform our readers about CONEG (Coalition of Northeastern Governors) LEGISLATION. CONEG laws have been around in some states for 20 years.

The law was originally developed by the Coalition of Northeastern Governors.  The legislation calls for a ban on the use of packaging that use any of the below specified heavy metals during manufacture or distribution.

According to the  pvctech-CONEG-web-summary-02.04.15.pdf, “On February 2015 ,The goal of this legislation is to reduce the sum concentration levels of four incidentally introduced heavy metals, namely lead, mercury, cadmium and hexavalent Chromium present in any package or packaging component to not exceed 100 parts per million by weight.”

A variation of enforcement instruments are available, including injunctive relief and civil penalties, but no doubt the potential disruption to product distribution is likely the harshest penalty of all.

SafeSourcing does the due diligence to ensure its supplier database is packed full of quality suppliers.  The CONEG Legislation is an example of one of the many requirements that SafeSourcing tracks.  For more information on how SafeSourcing can help you with insuring certified suppliers, please contact a SafeSourcing Customer Service representative.

We look forward to and appreciate your comments.

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Is it part of a good strategy to allow suppliers to pre bid in a reverse auction?

May 15th, 2015

This question was submitted by a prospect in a recent meeting.

 

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

In the many industries, preliminary price quotes are normally used as part of a Request for Information (RFI) or Request for Proposal (RFP) process. The actual reverse auction event is normally the Request for Quote phase or RFQ and historically has been used for final price compression. However there are large events that may change this strategy.

In large retail events with hundreds of products such as a prescription drugs, retailers may allow early quoting just due to the magnitude of the information requiring entry by suppliers. There are however many other categories that might also benefit from this strategy. Transportation Lanes, Office Supplies (entire catalog), Safety Products, MRO and Waste Management come immediately to mind. This process can take place several weeks prior to the live reverse auction but in many cases today may actually happen within 48 hours of the actual compression event.

At times, this may also be a good practice when there are a large number of new suppliers participating in order to familiarize them with the use of the tool set beyond their normal training session. For a new supplier auction day can actually be a stressful.

There are many who don’t believe that there is a strategy to participating in a revere auction. Seasoned suppliers would argue that point. In fact, suppliers that use the SafeSourceIt™ eRFX system have a variety of ways to enter pricing including uploading spreadsheets and then downloading them immediately that contain low quote indicators. Suppliers can then focus on individual items, groups of items (lots and market baskets) and decile based category sets. In these large events, this allows suppliers to split the data entry amongst multiple analysts and enter pricing strategically.

Ultimately it’s the responsibility of the e-procurement providers to train all suppliers on the use of the tool set and its flexibility so that they can determine how they might strategically stage their input. That is of course if the solution provider has data entry flexibility as part of their toolset.

If you’d like to learn more about the SafeSourceIt™ family of creative sourcing tools, please contact a SafeSourcing Customer Services associate.

We look forward to your comments.

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