Are Reverse Auctions Strategic? YES THEY ARE!!!!!!!

November 4th, 2010

This argument continues unabated so this author is jumping back in and looking at it from my teaching background albeit that was a long time ago if you remember the 3 ? R?s.

What is strategic is entirely up to the person using the tool, whether or not they have used it before and if it returns the results they require as part of their strategic plan. So can a reverse auction be strategic. Of course it can. The overlying strategy might in fact be to simply get costs under control as quickly as possible. I shudder to think that this would be a company?s entire strategy, but in these times of economic survival it may well be. I can envision the following. The economy is kicking a companies ass and the CEO calls a? staff meeting and says we have a new strategy and for the time being everything else will take a back seat in order to get our costs down. Come back in a week and tell you how you are going to do this immediately.

Now for the English lesson.

The word strategy is a noun that has several definitions. According to Wiktionary, 2 of those are.

1.?A plan of action intended to accomplish a specific goal
2.?The art of using similar techniques in politics or business

The word strategic is an adjective which we know is a word that modifies a noun and can also me modified by an adverb. So think of strategic as meaning of and pertaining to strategy and can be used comparatively as in something that is more strategic or less strategic.

So can a reverse auction or auctions be strategic. Of course they can and one example would be if your strategy was to simply reduce costs immediately. They can also be more strategic as part of a going forward strategy as well as provide other strategic benefits such as cleaning up your specifications and reporting as well as providing new sources of supply.

We look forward to and appreciate your comments.

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Air shipments are growing. How concerned should retailers be about Air Cargo safety?

November 3rd, 2010

How concerned should retailers be about Air Cargo safety as shipments and volumes increase with the holidays on the way?

There are many?areas that effect air cargo prices that can effect demand for and the use of this service and there are literally hundreds of airlines that participate. Examples might be issues such as the ash plumes from Iceland to the cost of jet fuel. With the recent concerns relative to air cargo security driven by the events in Yemen it is critically important not only that governments be concerned about the safe shipment of cargo to the? U.S.; but that U.S. companies importing these good also be concerned once the products have crossed our borders and entered the ground stage of their delivery cycle. The more products that are shipped the larger the problem for governments and? retail companies.

Air cargo volumes are growing rapidly. According to an article in Reuters the International Air Transport Association or the IATA says that the United States, for instance, shipped around 30 percent of its exports by value using air transport from January to March, IATA estimated. According to another article in Business Insider by Vincent Fernando, CFA titled Hong Kong Air Cargo Volume Exploding towards Record Highs. The article goes on to say that someone forget to tell Hong Kong the global economy was in trouble. Air Cargo volume is surging for the trade hub, up 47% year over year, and at the highest level in two and a half years.

Employees, consumers want to know that they are safe. As such it is critical that companies work together to develop a process that insures check and balances are in place from the site of original shipment to final store or consumer delivery.

We look forward to and appreciate your comments

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Here are nine steps to safer and more eco-friendly procurement.

November 2nd, 2010

The sourcing of quality safe retail products at the best market price is the most difficult job in retail and begs the question; what are the steps necessary to get started and where can we get more education?

Below are nine? great steps to? follow in order to drive safer and more eco-friendly procurement.

1.?Be pro-active in driving not for resale and for resale product safety within your company, and also supporting eco-standards in the procurement process.
2.?Pay it forward with all of your trading partners by sharing what you are doing, and asking what they do to support yours or similar initiatives.
3.?Educate your employees and trading partners about common safety standards and guidelines such as the SQF Certificate www.sqfi.com? and the Global Food Safety Initiative www.ciesnet.com.
4.?Educate your employees and trading partners about common eco-standards such as Green- Energy National Standard www.green-e.org or EcoLogo www.ecologo.org.?
5.?Point associates and trading partners to free educational websites such as www.safesourcing.com to use their free SafeSourcing Wiki or the Sourcebook professional social network for procurement professionals.
6.?Only use trading partners that follow your lead.
7.?Train your team to understand and use all available tools that insure supply chain safety such the free daily safety in sourcing blog at www.safesourcing.com? or the low cost SafeSourceIt Supplier Database and Reverse Auction Tools.
8.?Impose a system of measures and controls to monitor performance against clearly defined goals.
9.?Start at the top and engage all levels of your company.

We appreciate and look forward to your comments.

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How safe is your/our supply chain? Help keep us all safe please.

November 1st, 2010

We have made numerous posts related to product safety and safe foods over the last 2 and ? years. But that is not really the question here.

The specific question is how safe is your supply chain. How safe is it when transporting r products to your stores from warehouses all over the country and in fact all over the globe. Are there enough checks and balances in place to insure that the only products on a boat, train, truck or jet are the products that should be there?

The recent threats from Yemen should make all supply chain logistics providers ask the same questions every time something ships relative to their own and 3rd party logistics providers they may provide these shipping and delivery services. Unfortunately most companies will not have an answer readily available on this subject. In fact most companies will tell you when they order something how soon they would like to receive it and where but will never ask how the product will get there and by whom.

It?s crazy to think that we don?t know what?s on a plane until four hours before it gets to the U.S. This according to an article in the Arizona Republic titled Yemeni arrested in mailing of powerful bombs by Eileen Sullivan and Ahmed Al-Haj of the Associated Press. We have to do better. The terrorist never rest and we must remain diligent. So think about where you products come from and how they get from their point of origin to your stores. This is part of having a traceable supply chain but in this case we need to know what is shipping, when it?s shipping and who has access to to it during the entire process.

We look forward to and appreciate your comments.

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So what does not contain BPA?

October 29th, 2010

It almost seems like retail buyers and category managers have to start asking this question with every product that they source.

As information continues to mount all buyers better hope they have a track record of having asked. Originally BPA was used in can liners and baby bottles. Most recently it was found in receipt paper. It?s starting to get pretty clear that we have to ask where this product isn?t versus where it is.? And the information continues to mount as to the dangers BPA presents.

Most recently a study published in the journal of Fertility and Sterility claims that BPA or Bisphenol A appears to adversely affect sperm in men.

The next time I?m asked if I want a receipt I?m going to say no. That should interest my accountant when they ask for my receipts during tax season. I?ll just say you go pick them up.

We look forward to and appreciate your comments.

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Environmentally friendly procurement. Are you just faking it?

October 27th, 2010

Who should be responsible for the products in your stores being safe and environmentally friendly?

We have posted before about companies that say they are environmentally friendly when they are not, or claim to have practices in place based on relationships with others that has nothing to do with their products or services. It?s called GREENWASHING. At some point companies will be held liable for what they offer.

I read several news papers daily. I know its old school and does not support protecting our forests, but I just like the feel of it. Am I green? Ok, I also admit to reading a lot of web based material so I am at least part way there. Now am I green?

Unfortunately in products, being part way there is not good enough if you claim you are all the way there. An article in the Arizona Republic today titled Report: 95% of ?green ?products not green by Wendy Koch of USA TODAY goes on to say that the Federal Trade Commission of FTC is proposing stricter advertising? rules to enforce accuracy.

Greenwashing defined means that claims a person or company is making relative to their eco-policies are misleading.

How does your e-procurement provider help you to insure that the products you are buying are safe and environmentally friendly? What certifications do they check for? Where does the information that is placed on the labels of your private label products come from? Do you check with the manufacturer to make sure it is true? Does your e-procurement provider help you? If you put a product on your shelves that claim to be environmentally friendly (they normally cost more) and they end up not being, are you liable for damages from your consumers?

Companies are making progress, but we don?t know what we don?t know unless we ask and the companies that help you source your products should also help you ask in the supplier vetting process.

Be careful out there.

We look forward to and appreciate your comments.

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Are you anti Social Networks? Be careful how you define yourself.

October 26th, 2010

Do social networks have a place in the workplace, specifically in procurement?

For those of you that do not think that social networks have a place in the business world or in procurement in general, just remember that they are the tool of choice of the younger generations. That would be those that are coming after those of us with a few with more than a few years of experience. By the way, that includes the use of these tools in their work lives.

The blogosphere is crowed with any number of opinions on any number of subjects. As a medium it has evolved from on line dictionaries in the early to mid 1990?s. Blogs are a form of Social Media just as Wiki?s are. Forums have been around for thousands of years, it is only natural that as technology evolved to include more people that offerings such as Facebook would evolve to include many of these tool types. It is only a matter of time before the evolve to help us solve complex problems in all areas of life and that include procurement.

If you visit the SafeSourcing Sourcebook? and become a member you can host forums on anything you wish to learn about in the procurement space and post that forum to thousands of other members. It may be something as simple as a question like this. Can anyone tell me how they are presently planning to source paper products based on the rumors of an up pulp market? How might you plan on mitigating price increases?

Job specific social communities are not the way of the future, they are here today. Visit Sourcebook? and create your forum.

We look forward to and appreciate your comments

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Sourcebook™ will go viral in January of 2011

October 25th, 2010

So what does viral mean in a social community? Sourcebook™ will go viral in January of 2011. If you want to be part of it you better join now.

Sourcebook™ was launched during May of 2008 and is the procurement industries first professional social network. Like other social communities you can enter your profile, choose an avatar, upload pictures and videos and participate or lead threaded conversations with your peers.

Those that don’t think these types of tools will catch on in specific work places or industries probably would not have been the first to by a car when it was invented either.

Don’t wait to join, January is coming soon. Follow this link and be part of the Sourcebook™  excitement.

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In other words is just more trade liberalization.

October 22nd, 2010

Yesterdays post discussed trade agreements as a result of comparative advantages that particular geographies such as the European Union (EU) or countries have that makes it more conducive to conducting business with them.

The agreements are really just a form of trade liberalization which is how these geographies or countries collaborate to the remove government incentives and restrictions from trade between themselves and other nations or groups of nations. Trade liberalization has always been open to much political debate because of its impact on local economies where jobs or lack of them impact the daily lives of its people.

A subject we are all familiar with that is a good example is that of jobs going overseas from the United States particularly in the area of manufacturing. That subject could be an entire book relative to the impact of World War II on creating breeding beds for new economies based on new technologies that ultimately caused our own manufacturing decline and the need for tariffs in the first place.

This all sounds like a self fulfilling prophecy, but I digress.

We look forward to and appreciate your comments.

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Is comparative advantage important to your procurement practices?

October 21st, 2010

It could be if you source off shore and carefully analyze the local culture, skill sets and ease of doing business in that area to your mutual benefit.

Comparative advantage is a theory that advances that in a free marketplace, each entity or country such as the EU or NAFTA or trading countries will ultimately specialize in activities where it has comparative advantage. Examples of such might be technology, natural resources,?? local workers skill sets, agricultural advantages, transportation benefits etc.

Sometimes countries create trade agreements that eliminate the comparative advantage they each may have in favor of benefits that both or multiple countries derive from the agreement where one may have an advantage over the other that creates an imbalance in trade. As an example in the NAFTA agreement, Mexico may have a lower cost labor pool than the United States but the United States may have a transportation advantage that could leverage that low cost of labor. These agreements are called Free Trade Agreements in which both parties agree to lift most or all tariffs, quotas, special fees and taxes, and other barriers to trade between the entities to their mutual benefit.

We look forward to and appreciate your comments.

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