How is the e-procurement process different in a third world county?

February 17th, 2015

 

Todays post is from the SafeSourcing Archives!

E-Procurement  has become a standard business process throughout many developed countries.  It is recognized as one of the most successful applications in the electronic commerce (e-commerce) field and has been used to identify cost savings, improve efficiency and control for many companies’ bottom lines.  This author wonders then, why is the practice of e-procurement not utilized in third world countries? 

As I have found out the answer is a bit complex and sadly unfortunate.  E-procurement has not worked as a reasonable business practice in third world countries because third world countries are partially characterized by low levels of industrialism, widespread illiteracy, poor infrastructure, unsophisticated technology, and poor living standards among their populations as a whole.

That being stated, it is not hopeless to think that a business in a third world country could not strive to make changes that would enable e-procurement as a regular business practice.  Some of the steps that would be needed would be:
  1.  Clearly define a strategic goal and solid reason for the change in the  business practices.
  2.  Progress through simple steps that deliver true value.
  3.  Find an e-procurement system or partner, such as SafeSourcing, that is easy to use and offers support to any participating vendors.
  4.  Understand the barriers and limitations of your own company as well as the economy, environment, and politics of the country you’re working in.
  5.  Appoint a Subject Matter Expert (SME) within your company that can clearly help you outline the items that can be sourced.  A strategic sourcing partner, such as SafeSourcing, can assist with this as well.
  6.  Start the procurement process in sectors of the business that are either most ready to adapt to the changes in process or that are in the greatest need for the change.
  7.  Work hard to share your procurement success within your local market to promote growth within your country’s local economy.

There are factors that make e-procurement risky in a third world county, but the economic benefits that would come from implementing this practice would outweigh the risks long term.  By implementing e-procurement practices for businesses in a third world country it would impact the level of industrialism, the economic infrastructure, and in time possibly help to strengthen the used and accepted technology.

We look forward to and appreciate your comments.

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Procurement can help your company beat the averages!

February 13th, 2015

Profits being profits, they still boil down to revenue minus expenses.

 

Today’s post is from the SafeSourcing archives.

When you see a chart, often times the lines it contains represent some sort of average.   A chart in an article in the Daily Chart section of Economist.com titled, “Taxing for some” illustrates how procurement fits into where companies place in these averages.  The article is specifically about how corporate taxes have plummeted since the 1950s.  No, the author does not mention procurement, but what is great about charts like this is that they can mean so many things depending upon what the author wants to highlight.

Here, the author is trying to highlight that corporate tax rates have plummeted, insinuating that this is somehow a negative phenomenon.  The chart indeed does show that as a percent of GDP, corporate tax rates have dropped since the mid-50s.  What is really interesting to me in this situation is a second line above the corporate tax line.  It shows corporate profits as percentage of GDP.  Here profits hover above 10 percent in the mid-50s and are peeking over 12 percent today.  The years in the middle, however, show a bunch of zigzagging with a bottom of around 6 percent.

Being an average, the chart line represents both companies whose profits were above the line and those whose were below the line.  Why did some fall above that specific point and some fall below?  Certainly, there are innumerable factors.  I just have to ask myself what role procurement played.  Even back then, I have to believe that some companies were good at procurement and others were not so good.  This article does not tell us why some companies were above the line and why some were below it, but procurement was certainly a factor.  Profits being profits, they boil down to revenue minus expenses.  I have to wonder how many of the companies who were bringing the line up in the 50s were doing so partially because a savvy procurement department kept expenses in line with the current costs of goods and services at the time.  That being said, is your company above or below the line in today’s economy?  Regardless of if you find yourself in the 50s, the 70s or the 2010s, you can always strive to do things better? 

If you’d like to keep your expenses in check, please contact a SafeSourcing Customer Services Account Manager. 

We look forward to and appreciate your comments

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Your Supplier Relationship Management in 2015

February 9th, 2015

I recently read an article, “Procurement & Sourcing Predictions for 2015

 

Today’s post is by Heather Powell, Director at SafeSourcing Inc.

I recently read an article, “Procurement & Sourcing Predictions for 2015,” that speaks to new trends in 2015.  One piece of the article caught my eye.

Supplier Relationship Management in Highly Regulated Industry  – Supplier relationship management (SRM) is becoming a more widely accepted best practice across global organizations, but still lacks popularity due to unclear program definitions and/or lack of internal buy-in. However, in highly regulated industries, such as pharma and banking, SRM is an ideal solution for managing supplier risk as well as cultivating value from the supply base after the contract has been signed. SRM provides a controlled framework to manage suppliers who handle proprietary information or work directly with customers.

Strategic sourcing projects frequently generate significant cost savings, which have a very favorable ROI considering the low-cost required to implement. However, as these gains are realized, it is becoming increasingly difficult for companies today to generate the same level of returns year after year by utilizing the same sourcing techniques and tactics. Moreover, research has shown that, as supplier relationships are proactively managed, the initial benefits derived from the strategic sourcing efforts are not only maintained, but improved. The opposite is true for those supplier relationships that are loosely managed or benignly neglected by the buying organization.

Companies are becoming more dependent on a complex supply base. In many cases, key processes and functions have been outsourced and the supply base has collapsed due to strategic sourcing projects. This complex “virtual organization” type of structure begs for the need to drive performance improvements, manage risk, and efficiently manage supplier relationships. These Supplier Relationship Management (SRM) capabilities are being developed at top companies who are reaping the rewards of their investments. These capabilities include supplier management development, processes, governance mechanisms, and systems to manage suppliers on a day-to-day basis over the supplier life-cycle (onboarding to exit).

The SafeSourceIt™ Supplier Database is one the largest eSourcing supplier databases in North America with over 427,000 suppliers. The database contains global suppliers with over twenty-five unique certification standards that are supported by our best practice initiatives such as GFSI, ISO 22000, Green Seal, ECO-LOGO, Fair Trade, SQF, and Certified Humane Raised & Hand-Fed.

 In order to achieve maximum savings when using an e-procurement event, you need numerous suppliers aggressively vying for your business. SafeSourcing customers can request summary or detailed data from the same tool and download it to a variety of file formats.

We at SafeSourcing can provide you with quality, vetted suppliers with the ability to fulfill all your specific category needs. Even more, we can assist in certification identification of all of the suppliers. This way, if you have partnerships with existing suppliers or are looking at new partnerships, you can remain compliant with their practices.  Once certified suppliers are located, SafeSourcing can provide the opportunity for price compression, making your category financially attractive, as our historic ROI is greater than 10x.

For more information on how SafeSourcing can assist you in exploring your supplier relationship management and procurement solutions for your business 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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Procurement’s Common Issues

February 4th, 2015

Would you order food from a new restaurant........?

 

Today’s post is by Shelly Hayre,  CFT Manager at SafeSourcing.

Would you order food from a new restaurant without knowing the price prior to placing the order?

After an incredibly unacceptable wait for your food, what if the waitress came out and said they have many other orders that have a higher importance than yours?

Now, you finally got your food order and it does not add up to the description/picture. You would not be happy if you got meat lasagna, but there was no meat in the lasagna!

The problems you just faced with your restaurant experience are common issues within the procurement industry.

Not knowing the price of your food – Spend Visibility: It is very important to keep spend visible within a company. Keeping track of spend allows procurement departments to track and find areas of improvement. Having a system that tracks and monitors this for your company is key.

Long wait for food, and not priority – Limited Resources: Many procurement departments are left with lack of resources and staffing to manage spend. This makes efficiency and prioritization extremely important, but if every category does not receive adequate attention, potential savings are lost. Having a third-party assist in analyzing your spend can help give every category the attention it needs.

Order doesn’t match what you ordered– Compliance: The level of service or price agreed upon is not being met. When multiple branches are handling this service-level and pricing it makes verifying compliance even more difficult. It is the procurement department’s job to ensure compliance for all branches at a high-level. It requires support from branches and senior leadership. How are you currently monitoring compliance?

Maybe your company currently struggles with a few of the common issues above, or maybe all of them. How are you currently handling these issues? SafeSourcing is your one-stop shop for procurement’s needs and software. We can help your procurement department overcome these issues, while decreasing your spend and increasing your resources.

For more information on 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 and appreciate your comments.

 

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As a Procurement Pro, how much legwork do you really need to do when sourcing products and services?

January 30th, 2015

Does your preparation really matter that much? Will your discovery work lead you to the best decisions?

 

Let’s assume you are procurement professional for a company that is ready to find a better product or service solution for your company’s needs. This is when the legwork begins. So how much legwork is necessary to get the results you need? There are many factors that should be researched and investigated in order to make a value based decision for your company. Below are some guidelines you should consider as a necessary legwork.

UNDERSTANDING THE MARKET:

1.  Market Trends– Trends are what allow traders and investors to capture profits. Whether on a short- or long-term time frame, in an overall trending market or a ranging environment, the flow from one price to another is what creates profits and losses.  This is something that procurement professionals should keep an eye on so when the time comes they are armed with as much information as possible in order to make the best decision for their company.

2.  Pricing Trends– Understanding where the market is headed and why will allow you to make better decisions regarding long / short term contract purchases vs. potential spot buys as well as the need for possible price review intermittently.  The current price may be desirable but understanding the trend will allow for better decisions. Awareness and connection to the industry can only help when you are ready to act but more importantly develop a solid long term strategy.

3.  Hurdles– Think about people running in a foot race. They are running, and then they see something that blocks their way. They can stop running OR they can jump or go around the obstacle in the road and keep running. Think about work the same way. You worked hard to find the right supplier, cost and service. Now there are unforeseen problems that could result in additional costs or expenditures.  Building in contingencies will avoid such issues.

4.  Product Content – This is referring to the materials that are required to produce a product or support a service in order to meet necessary standards or specifications. This will affect the price of the product or service you want to purchase.  Companies may also have specific guidelines regarding environmental impact or safety standards.  Awarding business to a vendor that also has “green” initiatives in place that support your companies CSR initiatives can foster good will internally as well as in the community   you serve while also improving your company’s image as a pay it forward workplace.

If you’d like to learn more about how SafeSourcing thinks through it’s category to market strategy, please contact a SafeSourcing customer services representative

We look forward to and appreciate your comments

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Supplier selection! This may be the most important decision you make.

January 29th, 2015

A question we often hear from retailers, is how many suppliers do you have in your supplier database?

 

Todays post is by Ronald D. Southard, CEO at SafeSourcing Inc.

We sometimes want to blurt out a response that is number oriented because ours is the largest and most diverse retail supplier database. However we end up holding back in order to better understand the question that is really being asked. The discussion normally evolves along the line of quality and what data we have available in the database in order to make high quality supplier selections. Although reduction in cost may in fact be the ultimate goal, it in fact may not be the end point after the necessary due diligence required to pick the right supplier or suppliers.

Developing a plan that addresses the often conflicting objectives during your decision-making process and identifying the optimal list of suppliers requires significant amount of data in order to mitigate long term risk. Measuring your supply chain partners on cost only may cause you to miss many of the non-financial aspects that are so important such as:

1. Customer references 2. Product quality 3. Flexibility 4. Terms 5. Funds 6. Distribution 7. Responsiveness 8. Safety Focus 9. Eco Focus 10. Collaboration practices 11. Aggregated category opportunities 12. Experience

The risk of a new supplier performing poorly can negate any savings gained from direct product cost reductions. Driving sustainability in supplier improvement is one key to minimizing these potential risks within your company’s supplier base. Contact us at SafeSourcing if you like to explore expanding your view of the supplier universe

How your e-procurement solutions provider  addresses these questions is also key.

We look forward to and appreciate your comments.

 

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Is it time to replace that old thermostat?

January 28th, 2015

With winter upon us it may be time to consider ways to improve the efficiency of your HVAC!

 

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

With winter upon us it may be time to consider ways to improve the efficiency of your HVAC (heating, ventilation and air conditioning) unit.? Studies show that heating and cooling account for about half of the energy use in a typical U.S. home.? One thing you can do to lower this expense is to replace your current thermostat with a smart thermostat.? There are several different types of thermostats available.? There are programmable thermostats which allow you to set different temperatures for different times of the day and smart thermostats which program themselves by learning from your behavior and your desired temperatures for certain days and times throughout the week.? Smart thermostats can also be controlled remotely allowing you to change temperatures miles from home.? Changing to one of these types of devices can save you approximately 20% on your heating and cooling.? Below are some benefits of a smart thermostat.

Benefits of a Smart Thermostat

??Save Money
??Reduce Energy Use
??Control Remotely
??Displays Energy Consumption in Real Time

At SafeSourcing, we can gather all the necessary information for you and help you decide what thermostat fits 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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Definition of Insanity

January 27th, 2015

?doing the same thing over and over and expecting different results? ? Albert Einstein.

 

So we have all heard it before, but the definition of insanity is ?doing the same thing over and over and expecting different results? ? Albert Einstein.

Today?s blog was written by Shelly Hayre, CFT Manager at SafeSourcing Inc..

I see category managers strategizing on a project with creativity in mind, but sometimes change is not perceived well and the strategy starts to form the same as it did years ago. The only difference is everyone wants better results. I believe it is the procurement leaders? role to push for creative and thinking outside of the box. Easier said than done with some.

Below are three keys to increase Procurement ideas creativity and quality:

1.? Coaching ? coaching the team on how to develop a creative idea and what this may look like. Bring outside support in to help the team think outside the box. Not everyone is creative, and a new perspective can help with this.
2.? Utilizing Creative Thinkers– When bringing in outside help, make sure the individual has the creative ability to assist the team. Having a team that is designated to working complex projects that need special attention and focus on the breakthrough idea.
3.? Have a Scoring System– What defines creativity? What does that look like? Dedicating a leader to provide this picture and process of creative ideas.

Like I?indicated earlier, not everyone is creative, a leader will need to show them what this looks like and guide them to a path where they will receive feedback on their creativity.

This process of thinking and executing takes time. You cannot start this process, and then become pressed against a timeline that it falls back to executing as quick as possible. You will receive the same results you say last time. Some questions to start the creativity wheels at your next category meeting:

??What is the overall goal of the project?
??What are we doing today that costs us resources (money, time, management, etc.)?
??What does the market look like today? What does it look like compared to last time it ran?
??What new trends affect the market?
??How can you leverage index pricing to be beneficial for you and the supplier?
??What other categories can you include to leverage better pricing?
??How will you compare suppliers pricing? How will you know you are offered fair and best pricing?

If you reach out SafeSourcing can be your creative team. We have a new way to see on categories and have experience running various categories in different fashions. We will find the best and creative way to execute a procurement project that brings greater results.

We look forward to and appreciate your comments.

 

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Why We Love Procurement & Supply Chain Management (And You Should, Too!) Part 7

January 23rd, 2015

Succeeding in procurement and supply chain management requires a broad diversity of skills

 

Today?s post is written by Heather Powell, CFT Director & Project Manager at SafeSourcing Inc.

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Sourced from: http://buyer.sellerinsights.com/2012/12/12/8-reasons-to-love-procurement/

Reason 7: It requires a diversity of skills

Succeeding in procurement and supply chain management requires a broad diversity of skills. The skills required in the past, such as; hard-balling suppliers, policing compliance with procurement rules, and administering paperwork and procedures are now longer adequate. Instead what is required are CEO type skills, such as;

??Leadership
??Driving business performance and achieving business results
??Strategic thinking
??Partnerships and strategic alliances
??Internal collaboration and communication
??Understanding markets, predicting change and managing risk
??Innovation and creative thinking, including; new products and new markets.

We hope you have enjoyed the series on why we love procurement & Supply Chain Management and that you too will love each!

 

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For more information on how SafeSourcing can assist you in exploring your procurement solutions for your business 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 We Love Procurement & Supply Chain Management (And You Should, Too!) Part 6

January 22nd, 2015

Because procurement is increasingly cross-functional in nature!

 

Today?s post is written by Heather Powell, CFT Director & Project Manager at SafeSourcing Inc.

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Sourced from: http://buyer.sellerinsights.com/2012/12/12/8-reasons-to-love-procurement/

Reason 6: It is cross functional and collaborative

While traditionally procurement was traditionally seen as stand-offish and confrontational, best in class is highly collaborative in style. That means it engages with managers from all across the organization.

While it may have the authority to tell people what to do and to enforce compliance with procurement rules and procedures, it uses its power carefully, seeking to collaborate rather than control.

Its role includes evangelizing a better approach to all aspects of procurement, from sourcing to supplier management. It does not necessarily seek to wrestle the decision away from the front line manager, but rather to support the manager in the decision making process.

Because procurement is increasingly cross-functional in nature, it draws its team from all disciplines and backgrounds. It may second an engineer from R&D to head up a sourcing project for the components required for a new product, or hire an ex supply industry salesperson to manage and negotiate with suppliers from that same industry.

Stay tuned tomorrow for Part 7.

For more information on how SafeSourcing can assist you in exploring your procurement solutions for your business 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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