The stalemate in Washington resulting in spending cuts could literally make you SICK!

March 7th, 2013

What happens when the government furloughs the meat inspectors?

Today?s rant is by Ronald D. Southard, CEO at SafeSourcing!

We (I am positive that I am speaking for almost everyone) are all extremely tired of the partisan politics that are playing themselves out in Washington D.C. We are all inundated daily with related information which is more focused on a group of adults trying to get along, than doing what it is we elected them to do. We see this play out daily on TV, in newspapers, on the internet and if we manage to turn on the radio in our car between appointments, we hear it there too. This in and of itself can make one sick.

However, I am writing about another type of sickness, one that can make the general population extremely ill (food borne illness) and in severe cases can result in death. You might be asking at this point what the heck does this have to do with procurement. The answer is a lot, think food safety programs; which are part of most companies corporate social responsibility initiatives (CSR) and driven by the Global Food Safety Initiative (GFSI) and Safe Quality Foods (SQF). For retail companies that sell repackaged foods, and for hospitality organizations? that prepare and serve food to the general public from quick service to fine dining establishments as well as? the suppliers and distributors that source it and provide it to them for use. This process is a huge undertaking for these companies and requires government support.

I was checking out Reuters earlier today and came across a piece by? Charles Abbott titled ?USDA chief says meat inspector furloughs still months away? What?s scary is that? Agriculture Secretary Tom Vilsack said the furloughs to take place later this year might only be 11-12 days for meat inspectors. The Obama administration says it could be as many as 15 days. If this were to include all 8400 inspectors, that would be up to 126,000 days or 345 man years.? That?s a lot of work inspecting or reporting on inspections that is not going to be done at a time of the year consumption trends up because of the upcoming holidays. The numbers sound a lot scarier when you look at them this way. So here?s to our collective health.

If you?d like to learn more about how SafeSourcing supports safety in the procurement process, please contact a SafeSourcing customer services account manager.

We look forward to and appreciate your support.

 

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Offshore, Nearshore, Reshore, Backshore. Fore Sure!

March 6th, 2013

Maybe the best bet was to never have gone there in the first place!

This post is from Ronald D. Southard CEO at SafeSourcing.

I have posted a number of times over the last five years on the supposed benefits of Offshoring, Nearshoring and now Reshoring or Backshoring. I?ve even taken a look at the environmental impact of offshore tonnage being shipped via ocean bound freight and the resulting impact to our collective carbon footprint from that freight and the diesel they use. Interestingly, it is greater than the damage from all of the emissions of all the cars in the U.S. combined. I have even discussed the creative use of containers that were no longer being used at one point because of the cost to reship them. In fact some of them have become creative housing projects while others were just melted down.

I like detail, and I?m not sure if we looked at all related costs of offshoring in the first place would have made as much sense if in retrospect we had all of the information available to us today (Big? Data; UH!).

So now? companies are pursuing reshoring or backshoring because the cost of producing products? in places like the Asia Pacific region are going up substantially as the emerging middle classes in those areas are demanding better wages, benefits and work conditions.

I was reading a survey? in the USA TODAY MONEY section attributed to? Schneider Associates that indicated that the statement ?Made in USA? being the most influential attribute when buying a new product had increase from 48% to 62% during the period of 2008 to 2012. That?s a 29% increase in 4 years. And, it indicates that almost 2/3 of the respondents agree. That is a big number as companies try to increase their wallet share from their top decile customers. Quite frankly, we do not have companies ask us very often any more if we can bring in suppliers from off shore to participate in eRFX events for products and raw materials. This can only mean that these companies are in fact reading their tea leaves (customer data) and doing as their customers ask. The answer is BUY AMERICAN! And that should include Mexico and Canada which after all are part of America and benefit with the U.S.? from our NAFTA arrangement.

If you?d like to learn more about how SafeSourcing can help you find sources of supply in North America that you may not be aware of, please contact a SafeSourcing customer services representative or visit our SafeSourceIt? Supplier data base query tool.

We look forward to and appreciate your comments.

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Can companies still drive significant cost savings that will positively impact earnings with eProcurement Tools?

March 5th, 2013

The answer is YES! I?ll argue this with anyone!

Today?s rant is from Ronald D.? Southard, CEO at SafeSourcing

I?ve been reading a lot lately about the fact that overall cost reduction is dead and that maintaining cost or cost containment is where companies should be focused. The logic behind this conclusion is that many of the indictors of the potential for savings such as inflation, crop availability and demand that drives current pricing models will never be what they were in recent history. While I review this data on a daily basis and the premise for the argument has merit, over all I don?t buy it and if I did I would not be as passionate about what it is that we do for a living at SafeSourcing.

The reason I disagree, is that so many companies do not or have not used the type of advanced eProcurement tools that are available to them today in order to compress current pricing. While many best in class procurement practitioners that use the most current generation of eProcurement tools may have squeezed or compressed pricing within their supply chain, the fact is that many have not. Additionally, many of these companies have not renegotiated their contracts for years in order to take advantage of the prices that may have been available to them. Although there supplier may claim to have shrinking margins, the question that needs to be asked of the supplier is what is my margin to you compared to other customers that you service. Another issue that flies in the face of this opinion is that there are suppliers out there that may want a company?s business and as such are willing to take at a lower margin with the hope of growing their wallet share with this customer over time. The fact is if you don?t ask or have never asked, you will never know.

I have always believed that it is possible to improve earnings dramatically though the use of modern eProcurement tools that continue to regress in price as a result of advanced technologies. In the retail segment I have posted examples that show how companies can improve earnings by greater than 50% by just focusing on 20% of their total cost of goods. This process will improve gross margins and net earnings. The issue that is not generally discussed is how to prove this.

The simple fact is that the P&L from a company?s prior year never quite looks like the P&L from the current year, as companies continue to evolve their programs for customer acquisition and growth. Examples could be new marketing programs, branding initiatives, new formats, new product strategies and mix as well as a host of other initiatives. Unfortunately, these programs are not always tightly linked throughout an organization so that what a procurement department is focused on directly reflects itself in a side by side P&L comparison year over year. An example of this might be special board driven capital programs for millions of dollars that negatively impacts earnings, when the procurement department can demonstrate in a very real way that they took millions of dollars out of the cost of goods resulting in direct cost reductions. If the capital program which was board approved is 3 times the size of the savings generated by cost reduction, guess what earnings will look like if revenue did not grow dramatically. The answer is negative earnings. The fact is that the procurement department may have exceeded their plan for the year and in fact been paid their annual bonus. But, because the entire organizations goals and alignment are not tightly linked the savings get lost in the data. Unfortunately this is not an uncommon issue.

I have not even discussed the expense area in this post.

If you?d like to learn how to address this issue within your organization, please contact a SafeSourcing customer?s services representative.

We look forward to and appreciate your comments.

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Preparing for Digital Signage!

March 4th, 2013

So you have decided to look at incorporating digital signage into your business. Do you know how you are going to do it?

Today?s post is by Mark Davis; Sr. Vice President and COO at SafeSourcing. Mark asks

With the decreased cost and increased value of digital signage, companies are beginning to look more closely at these solutions for their business.? Whether they are simply building upon their brand or doing that in conjunction with offering public information, advertising, or enhancing the customer experience in the business or store location, many companies have already developed some strategies and allocated budgets for this category for 2013.? Today we are going to be touching on some of those areas that you will need to armed with in developing how you gather the information to make your final decisions.

The features ? Buying or renting; internal or external; bundled or itemized; content management or no content management.? These are all great examples of the choices you will have to make when determining your final solution.? How much of the features you know will determine the number of vendors you look at and the depth (i.e. Request For Information as opposed to Request For Proposal) of the information you begin collecting.? Vendors can tell exactly where you are in the decision making process by the complexity of the information request and scope you provide them.? The more you lock down the request, the more likely the responses will be returned in a format to efficiently evaluate.

The responses ? The responses you receive from the Request For Information or Proposal will be tied directly to the details and structure you provide the vendors.? If you know that you have a specific set of criteria that needs to be met in order to be considered then fashion your request in a manner that asks the vendors to structure the information about their companies and solutions in the format you want.? If you know that you want a reputable company who has experience in your industry and has performed projects for companies your size then make sure you have requested that information from them and not focused on questions that will have no bearing in your decision making process.? If there are specific features and service levels you expect, make sure you collect the capability to meet those expectations in a way that will be easy to evaluate at the end.

The pricing ? While the price is not the most important piece of any project it is a piece that needs to be collected in order to evaluate where every supplier falls.? If someone is providing you unmatched value add services it is critical that you understand where the supplier falls from a price perspective.?? Suppliers vary, and some can vary widely from each other.? Requesting item level detail at this stage is good even if you plan to bundle them later for discounting reasons.? Collect everything including add-on services you may or may not need later.? If there are start-up costs, training, annual maintenance costs, or content creation service fees, make sure you know what each vendor charges and if they can provide the services you need.

Digital Signage is an up-and-coming area for businesses but knowing what you want will be critical to evaluating the potential partners in the most complete way.?? For more information about how we can assist you in this process, 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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Scottsdale Arizona’s SafeSourcing Inc. releases outstanding 2012 results.

March 1st, 2013

Sales and Earnings growth with new products highlight results!

SafeSourcing is very pleased with the growth it has generated for 2012 and looks forward to continued growth during 2013. By providing our customers tools to improve their profitability through procurement best practices with our entire SafeSourceIt™ SaaS cloud based Procure to Pay product portfolio.

Despite the continuing economic condition SafeSourcing Inc. reported significant 2012 revenue growth of 23.2 % versus the prior year of 2011.Net earnings for the same period improved 93%. SafeSourcing also released several new products and services during 2012. Most significantly amongst these were SafePO™ and SafeCatalog™.  Continued growth of its customer base and utilization of its entire products suite by existing customers added to the highlights of an extremely successful 2012.

According to Ron Southard SafeSourcing CEO, We continue to honor the commitment we made to our customers by addressing all spends regardless of size for all companies regardless of size. During 2012 we have sourced products for companies across multiple industries for fortune 100 companies and companies with much smaller footprints.  SafeSourcing has run hundreds of millions of dollars through our system during 2012 for all eRFX types while also providing new sources of supply, a focus on companies CSR inititives and significant savings across all categories. Southard continued by saying that they could not be more pleased with the faith that their customers have placed in SafeSourcing during a continuing difficult economic climate.

To learn more about SafeSourcing please visit our website www.safesourcing.com.

We look forward to and appreciate your comments.

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Scottsdale Arizona?s SafeSourcing Inc. releases outstanding 2012 results.

March 1st, 2013

Sales and Earnings growth with new products highlight results!

SafeSourcing is very pleased with the growth it has generated for 2012 and looks forward to continued growth during 2013. By providing our customers tools to improve their profitability through procurement best practices with our entire SafeSourceIt? SaaS cloud based Procure to Pay product portfolio.

Despite the continuing economic condition SafeSourcing Inc. reported significant 2012 revenue growth of 23.2 % versus the prior year of 2011.Net earnings for the same period improved 93%. SafeSourcing also released several new products and services during 2012. Most significantly amongst these were SafePO? and SafeCatalog?.? Continued growth of its customer base and utilization of its entire products suite by existing customers added to the highlights of an extremely successful 2012.

According to Ron Southard SafeSourcing CEO, We continue to honor the commitment we made to our customers by addressing all spends regardless of size for all companies regardless of size. During 2012 we have sourced products for companies across multiple industries for fortune 100 companies and companies with much smaller footprints.? SafeSourcing has run hundreds of millions of dollars through our system during 2012 for all eRFX types while also providing new sources of supply, a focus on companies CSR inititives and significant savings across all categories. Southard continued by saying that they could not be more pleased with the faith that their customers have placed in SafeSourcing during a continuing difficult economic climate.

To learn more about SafeSourcing please visit our website www.safesourcing.com.

We look forward to and appreciate your comments.

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Reverse auctions will continue to drive consistent results over time.

February 28th, 2013

So, what makes this process more than a one hit wonder that too many think it is?

Today?s post is from Ron Southard, CEO at SafeSourcing.

As spring training is now in full swing, let?s use a baseball analogy, you may not get the home runs and grand slams that you saw during your first and maybe second year implementations of this tool but with proper planning and execution you will at a minimum continue to beat market pricing. Think of it as singles, doubles and triples and sometimes a walk where you just hold onto what you already have.

In order for this to happen we have to understand how to conduct successful auctions in today?s business world and it is not the same old same old where the low bid always wins. The number one job of any business is to drive bottom line profitability. Because of this, companies that win your business during an E-RFX process need to make the business they have just won as profitable as possible. They may take your business during an auction as a loss leader in the hopes of increasing their wallet share with you over time. They may take your business at a loss in a down economy in order to drive cash flow to just as the song goes, keep on keeping on. They also will take actions during the next year or two to drive their internal costs down which will make your business more profitable to them. These circumstances means there is potentially more compression on the table the next time you go to market with their category. The why is actually pretty simple? Your new supplier wants to keep the business and the relationship, your old supplier wants their business back and other suppliers need new sources of revenue. What?s the math look like? Last year your vendor invoiced you for $10M. This year they have to reduce to $8M in order to remain your vendor because others are willing to take the business at this price. The question to your vendor is, would you like to lose $2M or would you like to $8M?

There are many other benefits to running these RFQ?s over and over again. A few are , new product offerings with better features, new suppliers that you are not aware of, suppliers you strategically did not invite the 1st time (if you want to know why, give us a call), existing products with new technologies and quality improvements to name a few. To support this, don?t sign contracts for periods of longer than two years, one if you can manage it or you will be paying too much by contract expiration.

If your e-procurement solutions provider knows what they are doing, reverse auctions can and should become a long term tool in your procure to pay tool box.

We all know that ball clubs that consistently hit singles and doubles game after game ultimately win more of those games. In fact a grand slam can?t happen unless there are already runners on base.? If you want to learn more about how to succeed year in and year out with this process, please contact a SafeSourcing customer services account manager.

We always appreciate your comments.

 

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How many companies do not use e-Procurement Tools? If you don’t, do you want a FREE TRIAL?

February 26th, 2013

Believe it or not, I was asked this question again last week?

Today’s post is from Ron Southard CEO at SafeSourcing. I’m ofeering you a FREE TRIAL!

There is no doubt that for those companies that have not used e-Procurement tools in the past.  In fact, below the Fortune 500 level, it is possible that as many as 80% of companies have not used these tools, as they have historically been too expensive. There will be a continuing struggle to change the way companies operate and collaborate internally on procurement initiatives in more current and productive ways. However, with the advent of SaaS cloud based solutions like SafeSourceIt™, these tools are now available to any company, regardless of size, that wishes to use them. There really is no spend too small or category too complex to omit from consideration. Savings will always be available because there are always suppliers available that are interested in earning new business that you may not even be aware of. These suppliers are properly vetted and also offer quality services. In many cases these suppliers are also beginning to use these tools to make their sourcing easier and more cost effective. It would only seem appropriate that companies also hold suppliers accountable to share in those savings. Companies may not know who these suppliers are, but the use of tools such as the SafeSourceIt™ Supplier Database will help you find them, improve your processes and shorten your sourcing cycle. Your company’s profitability will also improve as a result. At the executive suite this is what companies expect and also what business and free markets are all about.

If you’d like to learn more about how these tools can provide your company with at least a 10 X ROI on your use of these tools, please contact a SafeSourcing customer services account manager. If you do, we’ll give you a Risk Free Trial  with event completion in under 30 days.

We look forward to and appreciate your comments.

 

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How many companies do not use e-Procurement Tools? If you don?t, do you want a FREE TRIAL?

February 26th, 2013

Believe it or not, I was asked this question again last week?

Today?s post is from Ron Southard CEO at SafeSourcing. I’m ofeering you a FREE TRIAL!

There is no doubt that for those companies that have not used e-Procurement tools in the past.? In fact, below the Fortune 500 level, it is possible that as many as 80% of companies have not used these tools, as they have historically been too expensive. There will be a continuing struggle to change the way companies operate and collaborate internally on procurement initiatives in more current and productive ways. However, with the advent of SaaS cloud based solutions like SafeSourceIt?, these tools are now available to any company, regardless of size, that wishes to use them. There really is no spend too small or category too complex to omit from consideration. Savings will always be available because there are always suppliers available that are interested in earning new business that you may not even be aware of. These suppliers are properly vetted and also offer quality services. In many cases these suppliers are also beginning to use these tools to make their sourcing easier and more cost effective. It would only seem appropriate that companies also hold suppliers accountable to share in those savings. Companies may not know who these suppliers are, but the use of tools such as the SafeSourceIt? Supplier Database will help you find them, improve your processes and shorten your sourcing cycle. Your company?s profitability will also improve as a result. At the executive suite this is what companies expect and also what business and free markets are all about.

If you?d like to learn more about how these tools can provide your company with at least a 10 X ROI on your use of these tools, please contact a SafeSourcing customer services account manager. If you do, we?ll give you a Risk Free Trial? with event completion in under 30 days.

We look forward to and appreciate your comments.

 

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Farming the Low Hanging Fruit

February 25th, 2013

How much cost reduction low hanging fruit does your company have and what are you doing to get it?

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

There are many companies with large supply chain/procurement teams that have spent years going after the easy cost reduction/increased value or low hanging fruit.? Many companies, however, even very large companies have procurement staffs with barely enough bandwidth to monitor a portion of the overall spend.? For these companies, the need to look at low labor areas of spend is crucial and is a great place to start to focus on, especially if you have a strategic sourcing partner to work with.

Standardize the specification ? One way to quickly find ways to reduce costs, especially in companies where there many departments or locations, is the standardization of the basic purchases made.? By standardizing what your company buys you can achieve two things that will help in reducing cost.? First, you will ensure that groups are not buying at a price or quality level that is outside the norm of what the rest of the company is doing.? By standardizing the specification it is also easier to track how your company is doing against prices they should be getting.? This leads right into the second advantage which is being able to consolidate all of your spend in one bigger level that allows for stronger National or Regional contracts.? This may not add up to the company?s largest savings opportunities but they are not resource intensive and can be achieved quickly.

Quality Needs and Non-branded items ? In the process of standardizing the specifications for low hanging fruit categories, another way to affect more value is to evaluate whether the items being purchased fit the true needs of the organization.? Does your company need a $2,500/month multi-functional device when a $1,200 one will do?? This is also a time to determine whether the need for branded items could be replaced with non-branded items.? The quality of non-branded items such as generic drugs, paper products, and small appliances has increased greatly in the past few years and because of that companies are beginning to look more and more to non-branded products for their business needs.

Suppliers: too many, too long ? Maybe it?s not your products and services you want to change it is the fact that you have too many suppliers supplying the same thing or maybe you have a supplier who has been supplying you for years without any real accountability.? These are also examples of where a procurement department can get great increased value with little effort.? The reason for this is because you aren?t changing what you are purchasing and so you know the levels of spend and specification in advance.? Armed with that, it becomes a matter of consolidating your vendors or opening up the opportunity to new vendors as the case may be.? Either instance can provide very good results without having to change what you are purchasing at all.

If you are looking to put some attention on your low hanging fruit and find yourself without the resources to even go after that, 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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