Why We Love Procurement & Supply Chain Management (And You Should, Too!) Part 5

January 21st, 2015

Orchestrating a supply chain that span different continents and integrate 1,000s of diverse sectors

 

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 5: It is complex and challenging

Orchestrating a supply chain that span different continents and integrate 1,000s of diverse sectors, from primary subcontractors, to the suppliers of the smallest components or parts, entail great complexity and challenge.

Operating at the interface of supply and demand effective supply chain management is key to:

???? (a)? The demand for more rapid innovation, including new products with rapid time to market and shorter product lifecycles.
???? (b)? Risk management and resilience in the face of:
????????? ??increased market volatility
????????? ??sudden and unpredictable international supply risks (from Tsunamis to political revolutions)

(c) Legal compliance, from product traceability of certain goods, to diverse trade, employment and other regulations across the variety of international markets. It requires thinking globally while complying locally.

Stay tuned tomorrow for Part 6.

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 4

January 20th, 2015

Globalization has and continues to be the dominant economic trend of the past 3 decades

 

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 4: It is global

Globalization has and continues to be the dominant economic trend of the past 3 decades. Supply management is the oil in the cogs of global markets and supply chains that span the world.

Supply management transcends borders, cultures, languages, currencies and climates to bring products from one side of the world to the other. It has reshaped the economic order with the rise of the Chinese Indian and other economies as low cost manufacturing powerhouses.

Stay tuned tomorrow for Part 5.

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 3

January 19th, 2015

The CPO increasingly has the ear of the CEO and CFO

 

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 3: It is strategic!

The CPO increasingly has the ear of the CEO and CFO ? it has direct access to power. That is because few managers have the potential to impact on the bottom line in the way that the head of procurement/supply management can.

As every MBA (and indeed every salesperson) knows; the way to improve the bottom line in a time of low growth is to cut costs, slim line production and drive efficiencies generally. This is something that procurement and supply chain managers have done very well.

At conferences procurement managers proudly boast of savings of millions delivered from procurement initiatives, with savings of 15-35% regularly being quoted. However, its impact on business performance goes well beyond cost savings.

Supply chain management is strategic because it matters to the longer term performance of the business. It will be called upon to support the implementation of almost any strategic initiative within the business and not just those that involve procurement.

Stay tuned tomorrow for Part 4.

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 2

January 16th, 2015

Reason 2: It is the new basis of competition

 

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 2: It is the new basis of competition

The most exciting companies of the past decade ? Apple, Dell and Amazon to name just a few ? have all had supply chain management at their core. Indeed, they could not have succeeded without it.

Supply management is the new and perhaps ultimate source of competitive advantage for modern business. It is at the core of new business models ? from manufacturing in low cost economies to selling across the web.

Today?s global industry leaders, such as Apple or Dell, make up in market capitalization what they lack in bricks and mortar. They own few factories, warehouses, or trucks. These have been replaced by a global supply chain that can produce at low cost and yet meet stringent quality standards, respond swiftly to peaks or troughs in demand and take new products from concept to reality in rapid time.

Production engineering is no longer the source of competitive advantage. It does not matter who owns the factory or where it is located. It is time to move over Demming ? Total Quality Management has been superseded by Supply Chain Management.

It is no longer about production engineering, but re-engineering of the very shape and structure of the organization. The value chain of modern business is the supply chain and that makes supply chain management the place to be.

Stay tuned tomorrow for Part 3.

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 1

January 15th, 2015

Reason 1: It is new and exciting!

 

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 1: It is new and exciting!

Supply chain management/procurement is new and exciting. It is the new global frontier of business and this is procurement?s golden age.

Purchasing has traditionally been regarded as a bureaucratic function at the organization?s edge responsible for ordering and replenishing supplies. It was concerned with paper pushing and form filling, in respect of transactions and supplies. However, buying has been elevated to new levels of importance and buyers have more clout than ever before. It is now a strategic business driver.

There are great advances being made in supply chain management/procurement, and yet there is a long way yet to go. Indeed, studies shows that only 16% of companies achieve procurement excellence, with 37% of companies at the bottom of the class. The rest are in the middle, or average category.

Stay tuned tomorrow for Part 2.

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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Piloting New Procurement Processes!

January 13th, 2015

When you introduce a new procurement process how will you structure it for success?

 

Today’s post is from our blog library archive  at  SafeSourcing.

The landscape of procurement is constantly changing and no time more so than in today’s world with company acquiring company, experience and education changes taking place and a workforce that is always in flux as a major generation of employees begins to exit the industry.  With all of these changes it is no wonder that new processes and 3rd party relationships need to develop to accommodate the new landscape.  With each new process and/or partner relationship introduced, laying out the expectations and roles and responsibilities will be crucial to achieving success.  Today we will be looking at some of the things which need to be done before moving forward with the pilot event of a changed procurement department.

Communication – Communication is the foundation for all successful projects and understanding the pieces that are included here and whose responsibility it will be to own is very important.  There are three aspects that need to be determined once a new process begins.  The first piece is communication with internal stakeholders.  Generally this will be handled by the procurement team but must needs to happen before anything else is completed.  Catching your internal stakeholders off guard for a new project that affects their areas is the fastest way to derail a project.  The second piece is external communication with the incumbent suppliers.  The second fastest way to derail a project is to catch your suppliers off guard in a category they are currently supporting.  Advance notice, informing your suppliers what is happening will help ensure they are ready to fight to keep the business they have.  These first two areas are considered “notification” communication and the third would be classified as “status up
date” communication.  This is where the future touch point communication with the suppliers and stakeholders are set so that everyone can be kept up to date with the project.  The more information that can be shared with all interested parties the smoother the project will go. 

Timeline and Milestones – Happening in parallel with the notification communication is the establishment of the milestones that will occur not only for projects in general but specifically for each project on its own.  Each piece of the process should be defined from the time a project is decided through the final contract with the awarded vendor.  These milestones should be well-defined and tentative dates should be attached to each one.  These dates should be connected in a way through a program like Microsoft Project so that the outcome of milestone slippage can be seen immediately by the project team.  This provides prospective for the entire project and also a forum to track the pieces as they occur to keep everything on track.

Roles and Responsibilities – Once the project has been defined the ownership of each piece must be clearly communicated to each affected party.  Officially assigning roles ensures that there is a minimal chance of items falling through the cracks and not getting completed.  Having a well-established template of roles and responsibilities is key but keep in mind that each sourcing project is unique and some departments may have less resources than others to handle all of the items needed.  Milestones like providing spend details are usually owned by the stakeholders but sometimes may get handled by an internal or 3rd party procurement team.  The important thing with roles and responsibilities as that you have a framework but stay flexible with each project.

New procurement processes can lead to great results as long as they are defined and communicated in advance so that everyone knows the part they play.  For more information on how SafeSourcing can assist with structuring standard operating procedures for these projects 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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Are you aware of A Purchasing Managers’ Index (PMI?)

January 9th, 2015

How do you keep track of the economy’s ups and downs as it relates to your specific category or industry?

 

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

There certainly are business trends that can provide somewhat of a prediction, but is there any way to keep a measure on the pulse of how the economy is affecting you on a more regular basis?

A Purchasing Managers’ Index (PMI) is a great way to keep track of market fluctuations.  The PMI measures activity such as production, new orders, inventories, and employment levels.  The PMI is compiled by the Markit Group and the Institute for Supply Management and is calculated on a monthly basis by polling businesses that represent the make-up of the private sector.  According to Wikipedia, “the manufacturing data is generally released on the 1st working day of the month, followed by construction on the 2nd working day and services on the 3rd working day.”

The data for the index are collected through a survey of over 400 purchasing managers in the manufacturing sector on five different fields.  Each respondent has the opportunity to report on levels of better, same, or worse than previous months.  Depending on the manufacturing region, there may be a specific survey of results for the region as well as the specific manufacturing sector.

As an example, a US national PMI would be issued in the first few days of February and might report that nine out of eighteen manufacturing industries were reporting growth in January.  So if you wanted to keep a better pulse on the economy of your industry, the PMI survey is a great place to start and is updated monthly.

In addition to our own internal data, SafeSourcing tracks how multiple industries are doing on a regular basis, please contact a Customer Service Representative for more information.

We look forward to and appreciate your comments.

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Tools Your Team Needs

December 18th, 2014

Are you using the right tool for the job?

 

Today?s post is by Troy Lowe, Director of Development at SafeSourcing.

I recently bought a used house that needed a little TLC.? Most of the work is just cosmetic, like painting and hanging fixtures, such as blinds, curtains, and light fixtures.? These are not difficult tasks but can be a little time consuming.? It can be even more time consuming if you are not using the right tool for the job.? I own a really nice cordless drill/driver and have always used one for driving fasteners into various surfaces.? But what I discovered this weekend changed my mind.? A relative of mine was over and saw my frustration when trying to hang a bracket on the wall.? The screw would go in about three quarters of the way and then the Phillips bit would spin and start to strip the screw.? This happened even after drilling a pilot hole first.? She recommended that I use a tool that she recently purchased.? She went home and brought back a cordless impact driver.? I sure am glad that she was there to make such a great suggestion.? This tool worked like a champ!? The difference between the drill and the impact driver is that when the driver feels resistance it starts a hammering action which keeps the bit from slipping and drives the fastener into the surface.? Using the impact driver easily cut the amount time by 30% compared to the other jobs using the cordless drill.? This is definitely a tool I will invest in.

Benefits of an impact driver

?? Cordless
?? Provides higher torque but in rapid bursts
?? Designed to drive screws and fasteners
?? Does not have to be held tightly to provide the torque
?? Small and Light weight
?? Quick Release Chuck

At SafeSourcing, we can gather all the necessary information for your company and help you decide what tools fit your needs.? If you would like more information on how SafeSourcing can help your business, 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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My Love-Hate Relationship With Spreadhseets

December 15th, 2014

What do you do when you have just lost 3 hours of work because you forgot to save it?

 

Today?s post is by Mark Davis; Sr. Vice President of Operations and CTO at SafeSourcing.

Through the years the one lesson that should have been burned into my consciousness but somehow still gets missed is to back up your work regularly.? Whether that is a word processing document, spreadsheet or backing up the files on your hardware the practice in the business world should be second nature?.and yet?.it happens.? Hours of work down the drain that must be started from scratch.?

As much as it drives me insane when it happens, some of the best final output has occurred for me in these situations.? For me this occurs in some way or form because of opportunities, whether new, missed or false, these concepts can apply for our world of procurement when we stop and take a step back from rushing to get prices and deals solidified, racing onto the next project before the one we are on is barely finished.? While it may be uncomfortable for some us, taking a step back to re-evaluate where we are with a category can lead to some of the same good results as having to start that spreadsheet over.

New opportunities ? Taking a step back from a current view of category has its advantages.? It provides an opportunity to examine and look at new opportunities in the form of new companies, new technologies and new processes that may not have been there when the work on a category was done during the last contract.? When companies plow ahead trying to close as many projects as they can, these opportunities might get missed and an opportunity to leverage early with it.? If the time can be spared, starting as many projects off with a quick RFI of the industry can help uncover some of these options.

Missed opportunities ? Like new opportunities, missed opportunities generally get passed by when companies are trying close projects quickly without taking a step back.? These can be situations where a strong supplier was not asked what they could do to adjust their final offer before a decision was made.? Sometimes this results in missed savings but other times it results in a missed opportunity to leverage something else the vendor may do that is not part of the current project.? If two suppliers are close in price and overall offering but one offers a portfolio or products/services the company can also leverage, this is an opportunity with that vendor to get a better deal with the possibility of getting more business that will benefit the company.

False opportunities ? False opportunities arise when companies are too quick to make an award decision without digging to see what that decision with that vendor(s) will mean to the company.? Changeover costs, industry reputation, hidden costs are all part of what can come back to bite a company if the time look at what they thought they wanted is not invested.? Many suppliers will tell you if they have missed a piece of a project that should be included but do not be afraid to ask that of the vendors during a sourcing project.? It may increase the scope and overall cost of the project but at least it will be known and on the table.?

For more information on how SafeSourcing can help you take a step back and really look at these 3 classes of opportunities, 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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Let the Games Begin – The Sequel – Part II of II

December 9th, 2014

What if you could develop new ways to train incoming procurement professionals that fit the talents they already have?

 

Today’s post is by Mark Davis; Sr. Vice President of Operations and CTO at SafeSourcing.

In yesterday’s blog we covered some of the areas a video game type training program for new procurement professionals would have to include in order to train them in as mainly strategic sourcing scenarios as possible focusing on the analysis of spend, handling complex projects and engaging suppliers.  Today we will take a look at a few more areas that would round a solution like this out.

Awarding the business – It would seem to the novice user that once the pricing has been provided and the details about what is being offered are on the table the award decision would be clear-cut and at the beginning it would be.   As the game progressed the difficulty of knowing how to award would not be as obvious.  Running a temporary labor project for 50 locations across the country where local, regional and national companies all performed well and all three levels are currently servicing the company today in some way.  The project may have had good proposals from the incumbents and some not so good.  It may have produced 3 or 4 new players that the company has never done business with before.  The question becomes “Do I have enough information to make a decision and how much of the business should I award to any particular company?”  In a good video game training tool the answer to these questions would be slightly different with each project depending on the variables.

Tracking the performance – At this point the user has progressed and has mastered the sourcing projects from beginning to end and has awarded suppliers millions of dollars of business.  Any good training program would then take all of those GREAT results and throw them out the door as the new contract pricing fails to be realized due to a glitch the suppliers invoicing system or some other factor.   Being able to creatively develop ways to track realized savings with analyzing every invoice may be another element of this program.  At advanced levels the game may require the user to track the performance location by location instead of across the entire company increasing the difficulty even more.

Controlling the savings – The final piece of the training module for each project in this training program/game would be the ongoing management of the category and contracts.   As the user progresses through the program they may forget about that $100,000 contract they wrote for copy paper that has gone unchecked for 5 years and is now a $250,000 contract without increasing the volume of copy paper the company is getting.  The tool would have a built-in contract manager that would help the user keep track of these details and alert them to upcoming deadlines on old projects right in the middle of trying to work new projects. 

Obviously Sony does not have a game like this for the PlayStation (yet) but until that time there are still practices that can be put in place to help develop new procurement team members.  For more information on how SafeSourcing can help in this area, 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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