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

As I was watching football this weekend I paid special attention to a commercial by a leading Voice-Over-IP company who showed a couple getting robbed of everything including the kitchen sink to symbolize the hidden charges they were getting hit with from their current phone company “bundle”. With a message asking why consumers don’t unbundle their services, the same question could be asked of companies across the globe on why they continue to receive invoices for thousands of dollars with only one line item to go with it and no detail into what that bundle consists of.

Today we will be taking a look at some of the disadvantages when taking the “bundled” approach with any of your services. 

Unknown charges – One of the biggest problems with bundles is that you don’t know exactly what you are paying for.  Vendors often state the benefit of the bundle is that you get discounts for buying more features or services together.  In reality, changes to any aspect of your bundle are at the mercy of your vendors because of the lack of detail you are seeing.  Anything about your bundle that could save you money due to vendor improvements or process changes are difficult to recognize due to the lack of your visibility into what you are paying.

Comparing vendors – As inevitably happens in the sourcing world, the time will come when vendor offerings need to be compared against the market to ensure competitive pricing.  Bundles make this difficult to do because of the lack vision into what is being paid for everything.  Without these details there is no vision into where the incumbent is hirer or lower than other vendors on the market making your negotiations on those pieces almost impossible. 

Multi-Award issues – Not every procurement project will lend itself to being awarded to more than one vendor (i.e. services vs. equipment), but without the breakdown of what is being paid for in a “bundle”, the potential to award pieces to more than one vendor, and in the process getting greater savings, becomes extremely difficult.  Whether or not multiple vendors are used, having the vision into what each piece of your bundle costs is an important decision-making tool for the procurement team to have. 

Most bundles are designed and presented in a way to save money for the customer, but the danger is when that bundle is actually being used to hide fees, charges and potential savings under a one line item payment.  For more information on the bundles you are paying for and ways to examine whether unbundling those services is right for your company, please contact a SafeSourcing Customer Service Representative.  

We look forward to your comments. 

Thanksgiving 2011 is one of the most expensive, if not the most expensive, ever.? How can this be? According to a report from ABC News, travel and food costs are at an all-time high.? Hotels are up 5% this year, turkey is up $3, and even pumpkin pie is up in price by $0.41!? The culprit for these increases: rising gas prices, which are up about $0.50 per gallon compared to last year?? If gas prices are affecting Turkey Day, what about Black Friday and Cyber Monday?

Black Friday is notoriously known as the busiest and most lucrative day for retailers.? On its heels is Cyber Monday which has become almost equally as profitable, both of which follow one of the most expensive holidays this year.??? Prices for those must-have gifts inevitably are higher this year as well as gas prices have inflicted higher cost burdens for the retailer, who inevitably impose those cost increases to the consumer.? Although it may be a little late to prepare, this expensive turkey day provides a lesson in preparation for the year to come.

The consumer has numerous options to beat the rising costs.? Purchase non-perishable goods such as pumpkin and soups early in the year to avoid High Holiday costs.? Traveling on Thanksgiving?? Book flights ahead of time, and if possible travel on Thanksgiving, or postpone celebrations to the week after which will provide lower fares.

For the retailer, preparation and consultation with your strategic sourcing partner is key.? Following a similar plan as the consumer, purchase excess non-perishable goods earlier in the year.? Products and gifts that you know will be successful should also be bought in large quantities in advance.? This will not only help your wallet, but it will also allow you to have remaining inventory once Black Friday and Cyber Monday hit.? Beyond purchasing in advance, why not incorporate an escalator/de-escalator clause into your contracts to ensure you are not as heavily affected by the price inflation of oil.

Even though 2011 is one of the most expensive years to celebrate Thanksgiving, you can find alternatives to paying the higher prices.? Contact your strategic sourcing partner today so you can begin developing a plan for a Happy 2012.

For more information on SafeSourcing and how we can assist with this process, please contact a SafeSourcing ?Customer Service Representative for more information.

We look forward to and appreciate your comments.

Today’s post is by David Wenig; Senior Account Manager at SafeSourcing.

Balancing high priority procurement projects can be difficult due to some very complex factors including commodity indices, urgency, safety programs, corporate initiatives and more. In an effort to help ease the process a bit, I would like to share a bit of category advice.

Last night, over dinner, I had a conversation with a contractor that affirmed a concept that I already knew to be true. He said that he is going into a slow period of the year for contractors. Beginning around Thanksgiving, the work available for contractors becomes scarce.

This year, around the 3rd of January, my phone began ringing and ringing. On the other end were the contractors with whom I had worked throughout the year on procurement projects for our customers. The message was the same; they all wanted to know if there were any new projects that were ready to go out to bid.

What this means for retailers is that there is no time like the present to source your upcoming construction projects. From a strategic standpoint, the timing is at its best and savings will follow. Take a look at your project lists and contact your strategic sourcing partner to fast track these projects for completion as soon as possible.

If you are the type of person who prefers facts to conjecture, I will leave you with this example. In a long-running project in the construction category for a customer, we held bids for general contractors several times per month. The bids that were completed in January and February showed, on average, 75% more savings than the overall average savings for the project as a whole.

We look forward to and appreciate your comments.