Procurement Professionals can aid in product safety adherence.

January 22nd, 2010

We can do much about monitoring the raw materials that go into our manufactured goods but what are we doing about making sure they are safe to use for the proposes they were intended?

An article in today?s Arizona Republic attributed to the associate press was titled 1.5 million strollers recalled. The reason for the recall was canopy hinges causing fingertip amputations.? The article went on to mention that this was the 2nd major recall of strollers in recent months. In November of 2009 about one million strollers were recalled for fingertip amputation by the hinge mechanism from another manufacturer.

This author is aware that we can control the substances that go into these products from raw materials perspective but how do we in fact make sure they are safe for the children riding in them or the people pushing them.

The first thing we can do is ensure that the products are tested by Consumer Product Safety Commission or other groups with authority for that product. Last year the CPSC? announced that they would be expanding and modernizing the agency?s testing facilities with a new facility, located off the ?I-270 Technology Corridor? in Rockville, Md. One of the roles of the new facility is to provide additional space for CPSC?s Laboratory and Engineering Sciences Teams to test and evaluate consumer products.

You may be able to locate information about the products you procure at the Consumer Product Safety Commission?s website area for regulations and laws, but it will take some digging if you have never been there before. The product may have a FEDERAL HAZARDOUS SUBSTANCES ACT to support it as do a number of baby and children products.

What appears to be common sense to this author is in addition to holding companies accountable to regulations is also to simply ask what type of testing a product has gone through and where it was manufactured? Most companies have great intentions for the products they manufacture and sell. We may be able to keep our children safer by simply asking some logical questions.

We look forward to and appreciate your comments.

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Where’s the Beef and how do we trace it?

January 21st, 2010

The most recent beef recall suggests the struggles we face with a traceable supply chain.

A recent beef recall reported in the USA TODAY on January 20th indicated that 864,000 pounds of beef have been recalled by a Southern California based meat packing company because it might contain e.coli. The good news is that this occurrence was caught during a food safety inspection. This means that sometimes the systems we have in place work. So kudos’s to those that are doing their jobs on behalf of public interest.

What the above situation does not suggest is the problem associated with recalls and the role that traceability in the supply chain plays. Although there has been a lot of work done over the last couple of years, the accepted standard in traceability continues to be one forward one back. That means we require knowing where the meat packing company got their meat from and who they sold it to. In the USA TODAY article it suggested that  the meat was distributed to distribution centers, restaurants and hotels in California for a 3 month period in 2008 and a 10 day period during 2010. The question this begs is where did those organizations distribute the product to and can they recall it if the product even still exists. The act of a recall can be both good and bad. Hopefully it is good for the consumer. It is however never good for the distributor since they already paid for the product. It may however improve their reputation with their customers as a quality company.

What this short article suggests is that safety inspections need to be carried out on schedule and resulting recalls have to be executed quickly to all destination points in the supply chain. This clearly requires better than one forward one back accountability and is what all procurement solution providers should be striving for with their data sources.

We look forward to and appreciate your comments.

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Where?s the Beef and how do we trace it?

January 21st, 2010

The most recent beef recall suggests the struggles we face with a traceable supply chain.

A recent beef recall reported in the USA TODAY on January 20th indicated that 864,000 pounds of beef have been recalled by a Southern California based meat packing company because it might contain e.coli. The good news is that this occurrence was caught during a food safety inspection. This means that sometimes the systems we have in place work. So kudos?s to those that are doing their jobs on behalf of public interest.

What the above situation does not suggest is the problem associated with recalls and the role that traceability in the supply chain plays. Although there has been a lot of work done over the last couple of years, the accepted standard in traceability continues to be one forward one back. That means we require knowing where the meat packing company got their meat from and who they sold it to. In the USA TODAY article it suggested that? the meat was distributed to distribution centers, restaurants and hotels in California for a 3 month period in 2008 and a 10 day period during 2010. The question this begs is where did those organizations distribute the product to and can they recall it if the product even still exists. The act of a recall can be both good and bad. Hopefully it is good for the consumer. It is however never good for the distributor since they already paid for the product. It may however improve their reputation with their customers as a quality company.

What this short article suggests is that safety inspections need to be carried out on schedule and resulting recalls have to be executed quickly to all destination points in the supply chain. This clearly requires better than one forward one back accountability and is what all procurement solution providers should be striving for with their data sources.

We look forward to and appreciate your comments.

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ISO 22000:2005

January 20th, 2010

I was catching up on FDA guidance documentation trying to enhance SafeSourcing traceability standards for our SafeSourceIt? Supplier Database.

The document was titled Guidance for Industry Questions and Answers Regarding the Reportable Food Registry as Established by the Food and Drug Administration Amendments Act of 2007 June 2009; Revised September 2009. After coming up with more questions than answers, I referred back to ISO 22000 from which is the standard for food safety.

ISO 22000:2005 specifies requirements for a food safety management system where an organization in the food chain needs to demonstrate its ability to control food safety hazards in order to ensure that food is safe at the time of human consumption. It is applicable to all organizations, regardless of size, which are involved in any aspect of the food chain and want to implement systems that consistently provide safe products. The means of meeting any requirements of ISO 22000:2005 can be accomplished through the use of internal and/or external resources. ISO 22000:2005 specifies requirements to enable an organization — to plan, implement, operate, maintain and update a food safety management system aimed at providing products that, according to their intended use, are safe for the consumer.

With the number of health scares that have taken place in the last couple of years including in our school systems it might make good sense to review how your suppliers comply with this standard.

We look forward to and appreciate your comments.

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Twenty steps to running high quality retail e-procurement events.

January 19th, 2010

E-negotiation events such as reverse auctions have been around since the late 1990?s and are also referred to as E-RFX?s depending on their overall goal.

These sessions can from time to time also run as forward auctions? in order to reduce over stock conditions and reduce shrink or event to discard of old properties. Regardless of the naming convention used there are certain rules which if followed will create higher quality E-RFX?s for the retailer and their suppliers? This will result in creating better savings opportunities or cost avoidance in a tough market.

The importance of focusing on a clear process will increase E-RFX participation. This focus on quality will be recognized by your existing trading partners and potential new sources of supply, and will keep them coming back in the future to compete fairly for your business.

Here are twenty to begin with. I?m sure you can add others or refine these for your use.

1.?Executive sponsorship is mandatory
a.?This is required at the CEO, CFO, CPO, CLO or head of the supply chain.
2.?Get the entire buying organization together for a kickoff session.
3.?Provide an over view of what you are going to do and the impact it can have on the company. Use company financial models.
4.?Discuss and agree on success criteria.
5.?Every event is not a homerun. Singles and doubles score runs.
6.?Create a fun environment.
7.?Consider prizes for the most creative use of an auction.
8.?Use scorecards by department with percent of savings.
9.?Discuss the meaning and importance of corporate aggregation.
10.?Hand out E-RFX templates to gather existing product specifications.
11.?Put a time requirement on data collection.
12.?Gather an accurate list of your present suppliers.
13.?Work with your sourcing company to identify a top 100 list of events.
14.?Calendar the events.
15.?Prioritize by dollar value, date and strategic value.
16.?Conduct department level discovery meetings of 30 minutes to an hour.
17.?Investigate existing contract language.
18.?Look for auto renewal (evergreen) language roadblocks.
19.?Determine alternate sources of supply with your sourcing company.
20.?Develop an E-RFX rules and instruction template and post with each event.

Although this list is not all encompassing, it provides a format for getting started that offers the best opportunity for reduction in cost of goods, expenses and improvement in corporate earnings. Be sure to combine this with a business partner that understands your business.
?
We appreciate and look forward to you comments.

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Good sourcing practices are good whether they are green or not.

January 18th, 2010

I was looking over my files last night and reread an article titled ?A Practical Guide to Green Sourcing? and it occurred to me that if you already have good sourcing practices, the journey to green will be much easier.

A Practical Guide to Green Sourcing was written by? John Christensen, Christopher Park, Earl Sun, Max Goralnick, and Jayanth Iyengar? of? Supply Chain Management Review and published on? November 1st 2008. It is absolutely loaded with great information a lot of which should be just common sense..

A quote from the article really says it all and is a theme you should already be familiar with if you read my posts regularly. It is as follows. ?Green sourcing can help in two important ways. It can help companies improve their financial results, allowing them meet their cost reduction goals while also boosting revenues. It can also contribute to a better public image and reputation with the company’s stakeholders.? In essence this one quote supports triple bottom line accountability or TBL. However if you replaced the word green at the beginning of the quote with the following it still works

1.?Efficient
2.?Well thought out
3.?Strategic
4.?A refocus on your
5.?Reviewing your

I?m sure you can add another dozen to this list easily. I hope you will read the entire article. It may be your company?s first step towards a more successful 2010.

We look forward to and appreciate your comments.

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Bad sourcing practices can cause more than just “the cadmium blues.”

January 15th, 2010

Solid sourcing practices would not allow for the purchase of a consumer use product that contains cadmium.

According to Wikipedia cadmium has no constructive purpose in the human body. Cadmium and its compounds are extremely toxic even in low concentrations, and will bioaccumulate in organisms (that’s us) and ecosystems (that’s where we live).

This author posts frequently on safety issues and realities in sourcing practices. Particularly when you are buying from and unknown source, offshore or products for which you have no specific product specification. Consumers would be surprised how many products are bought offshore during buying trips that don’t have a specific specification. An example might be something as simple as a tiki lamp that comes under the category of seasonal, pool supplies or miscellaneous. Another that has been in the news recently is children’s costume jewelry. The issue that bothers this author is that for some of the largest names in retail that generally have great procurement practices there is really no excuse for these products making their way on to the shelves of our stores. There should be a check list of standards and certifications that suppliers have to adhere to in order for their products to come onshore in the first place. I can’t believe that a simple question like “Do these products contain any harmful chemicals in their makeup such as cadmium etc.” If the answer is we don’t know then don’t buy them or make the manufacturer provide a chemical breakdown of the product.

Inez Tenenbaum the head of the Consumer Product Safety Commission advises, “Do not allow young children to be given or to play with cheap metal jewelry, especially when they are unsupervised. This author whishes to paraphrase, DON’T ALLOW IT WHETHER SUPERVISED OR NOT. And further. Retailers don’t buy these products regardless of profit margins unless you know they are safe period.

We look forward to and appreciate your comments

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Bad sourcing practices can cause more than just “the cadmium blues.”

January 15th, 2010

Solid sourcing practices would not allow for the purchase of a consumer use product that contains cadmium.

According to Wikipedia cadmium has no constructive purpose in the human body. Cadmium and its compounds are extremely toxic even in low concentrations, and will bioaccumulate in organisms (that?s us) and ecosystems (that?s where we live).

This author posts frequently on safety issues and realities in sourcing practices. Particularly when you are buying from and unknown source, offshore or products for which you have no specific product specification. Consumers would be surprised how many products are bought offshore during buying trips that don?t have a specific specification. An example might be something as simple as a tiki lamp that comes under the category of seasonal, pool supplies or miscellaneous. Another that has been in the news recently is children?s costume jewelry. The issue that bothers this author is that for some of the largest names in retail that generally have great procurement practices there is really no excuse for these products making their way on to the shelves of our stores. There should be a check list of standards and certifications that suppliers have to adhere to in order for their products to come onshore in the first place. I can?t believe that a simple question like ?Do these products contain any harmful chemicals in their makeup such as cadmium etc.? If the answer is we don?t know then don?t buy them or make the manufacturer provide a chemical breakdown of the product.

Inez Tenenbaum the head of the Consumer Product Safety Commission advises, ?Do not allow young children to be given or to play with cheap metal jewelry, especially when they are unsupervised. This author whishes to paraphrase, DON’T ALLOW IT WHETHER SUPERVISED OR NOT. And further. Retailers don?t buy these products regardless of profit margins unless you know they are safe period.

We look forward to and appreciate your comments

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What consitutes a complex e-negotiation event or reverse auction.

January 14th, 2010

According to Wikipedia, in general usage, complexity tends to be used to characterize something with many parts in intricate arrangement.

Definitions are often tied to the concept of a set of parts or elements which have relationships among them differentiated from relationships with other elements outside the relational regime.

So how does one define a complex e-negotiation event? On the surface it may be an event with a large number of line items within a particular product set such as generic drugs in the retail space or raw materials used to manufacture components that require special handling, shipping and standards adherence.

This author would suggest that any event including multiple line items each with different specifications, order quantities, delivery locations, multiple suppliers not bidding on each line item, a split award of business and the size of the spend qualifies as a complex event. Adding to the complexity may be the overall strategy required when sourcing the right mix of suppliers to compress pricing properly and drive early and consistent bid activity…

The above example would qualify as organized complexity where there is a non-random, or correlated, interaction between most of the parts. In order to support? complex events, your supplier needs to have an understanding of the specific market place and practices and processes in place that allow these activities t bring complex events to market? in the shortest period of time. Generally this should occur within less than two weeks from event notification to event completion.

In a two part post from October of 2008, this author tried to define the relative complexity of the retail environment and its potential impact on the use of e-procurement tools. Specifically we identified the following areas of interlocking complexity.

1.?Supply Chain complexity.
2.?Rate of change in the global supply chain.
3.?Long term inherited supplier relationships.
4.?Lack of retail procurement staff.
5.?Lack of time.
6.?Multiple sources of supply.
7.?Limited view of new sources of supply.
8.?Confusion as to who?s the customer and who?s the supplier

Being comfortable that your solution provider understands your market place and has a well defined process for hosting Complex e-negotiation events insures that they are not difficult to host.

We appreciate and look forward to your comments.

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Do your suppliers adhere to all of ISO’s environmental standards?

January 13th, 2010

ISO is a great place to review guidelines and standards to support your environmental programs and make sure that your suppliers are doing the same thing.

ISO has published a new, updated brochure providing a basic introduction, as its title indicates, to Environmental management – The ISO 14000 family of International Standards. The 12-page, color brochure is the latest edition of a successful publication first released in 1998, two years after the launching of the first standards in the ISO 14000 family

The International Organization for Standardization widely known as ISO, is an international standard -setting body composed of representatives from various national standards organizations. Founded on February 23, 1947, the organization promulgates world-wide industrial and commercial standards. It is headquartered in Geneva, Switzerland. While ISO defines itself as a non – governmental, its ability to set standards that often become law, either through treaties or national standards makes it more powerful than most non-governmental organizations. In practice, ISO acts as a consortium with strong links to governments.

The SafeSourceIt™ Supplier Database holds it suppliers accountable to many ISO standards including 14000, 7002, 9001 and 22000.

We look forward to and appreciate your comments.

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