Why do I continue to harp on green building initiatives for retailers?

November 9th, 2009

Many retailers continue to grow their use of or sale of products that support the environment. However that may not be where they can get the biggest bang for their environmental buck!

According the United States Green Building Council or USGBC one of the largest potential impact areas on our environment is our buildings. In the United States buildings account for the following.

1. Seventy two percent (72%) of electricity consumption.
2. Thirty nine (39%) of energy usage.
3. Forty (40%) of raw material usage.
4. Thirty (30%) of waste output.
5. Fourteen (14%) of potable water consumption.

So the reason I continue to harp on green building initiatives is that if you only have enough resources to focus on one environmental area in your Corporate Social Responsibility initiatives (CSR), focus on green buildings. When you build new facilities whether they are stores, distribution centers warehouses or office buildings, build them to The Leadership in Energy and Environmental Design (LEED) standards. When you buy products or services, buy them from suppliers that do the same thing. This is a very easy process to implement and to build score cards to support. Now ask yourself the question as to how many of your suppliers follow LEED guidelines. This can even apply if you or your suppliers rent all of their facilities. Do they rent from real estate management companies or individuals that going forward are applying LEED standards to all of their building projects. If the answers are no, find other suppliers that do.

Ask your procurement solution provider to provide you with a list of two or three suppliers for all of your categories that follow LEED guidelines. You?ll be helping to build a better tomorrow for our children and theirs.

We look forward to and appreciate your comments.

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Traditionalist retailer thinking says e-negotiation tools will never work for them.

November 6th, 2009

Do you ever wonder what it takes to get through to procurement knowledge workers

On many occasions I have discussed the various benefits of using e-negotiation tools with retailers. I still believe that the primary benefit to any retailer if they were to assign twenty percent of their above the gross margin line spend to these types of tools could be an increase in their net earnings of up to 100%.

Beyond an earnings improvement however many of the following benefits could also take place.

1. They would continue to source high quality products.
2. They would continue to have great supplier relationships.
3. They would free up time to do other tasks.
4. They would improve their company?s net earnings by up to 100%.
5. They would support our fragile environment.
6. They would support global food and product safety initiatives.
7. They would have a larger audience of piers to converse with daily.
8. They would have a single source of information about their profession.
9. They would be instantly alerted to product recalls.
10. They would support a traceable supply chain.
11. They would have an endless source of new suppliers to review easily.
12. They would have product specifications at their finger tips.

You might be wondering why many companies are not enjoying these benefits today The following are common objections you might hear daily from procurement knowledge workers that have not been exposed to e-negotiation tools in the past.

1. We already get the best cost.
2. We?ve done business with our supplier for years.
3. We don?t have product specifications.
4. We don?t have time for this.
5. Switching costs will be too high.
6. We can?t insure the same quality.
7. We need to adhere to certain standards.

If you don?t feel that these benefits would support both corporate goals and underlying CSR initiatives, give us a call and we?ll make you a hero and get you promoted.

As always, we look forward to and appreciate your comments

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Corporate Social Responsibility (CSR) can be your fuel for growth!

November 5th, 2009

Although CSR certainly has an environmental focus

CSR is subject to a lot of debate as to whether there it has a strong business case. This author and many others argue that corporations benefit in multiple ways by operating with a broader perspective that will produce longer term benefits than their immediate, short-term profits. Others continue to argue that CSR distracts from the fundamental economic role of businesses.

In support of a well established CSR program, a 2008 study indicated that twenty six (26) percent of consumers indicated they planned to be consciously greener during the next year. Thirty four (34) percent indicated they would even be willing to pay more for it. These numbers continue to trend upward.

While many continue to minimize the impact of a well thought out CSR program, successful companies are building and measuring the impact of these programs with an increased focus on energy, waste, construction, carbon footprint, products, charitable giving, community action, food safety and the intersection of all of these components on their enterprise consituatants.

At the center of a good CSR program, is the ability to hold suppliers and other trading partners accountable to the same standards a company has set for itself. This however can not come at additional cost. As such, procurement solution providers play a huge part in ensuring that the following listed items are not only part of a well constructed CSR program, but are also included in the CSR programs or initiatives of your incumbent suppliers and potential new sources of supply. The following questions then become a good cross reference point as to what should be in your CSR program as well as that of your collaborating business partners.

1. What percentages of the products you carry are green or have undergone reformulation to make them more environmentally friendly?
2. Are you using reusable bags as a way to defer plastics from our landfills?
3. What are your utility reduction plans?
4. Do you have an energy reclamation plan?
5. Do you have a renewable energy program?
6. How are you or your suppliers making your fleets more efficient?
7. Are your new construction projects LEED certified?
8. What are your outbound or community education plans?
9. What community programs do you support?
10. What is your charitable giving program?
11. Do you have a CSR committee?
12. What are your product recall procedures?
13. How do you support product traceability?
14. What are your plans to protect your customers from food born illness?
15. Do you have a company certification cross reference map in place?

Ask your solution provider how they can assist you with this process.

We look forward to and appreciate your comments.

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H1N1 is on every front page and every news channel.

November 4th, 2009

At the same time we are hearing about another E.coli outbreak that is not getting the same type of attention. Should it?

Evidently at least 46 people have been affected with two resulting in two deaths to date in a new E.coli out break linked to ground beef produced by Fairbank Farms of New York. Fairbanks recalled over a half million pounds of its product on October 31st.

The issue now gets tricky for the CDC, involved retailers and Fairbanks of finding why and where the outbreak took place so as to not have it happen again. This may even involve tracing the product beyond the distributor. As such the proper traceability standards are still not in place to make this an easy task if required.

Precautions that procurement professionals can take to make sure they have necessary safeguards in place when buying meat products is to check the certifications their incumbent or future suppliers have on file? These may differ depending on the country of origin. Certainly SQF and GFSI certifications should be in place. Other potential certifications might include ISO 22000 as well as American Humane Certified, Certified Humane Raised & Handled and others. This should be a requirement of all supplier databases as well as the most recent certification dates and other practices that suppliers and processors may have in place that will mitigate risk that could lead to the cause of future outbreaks.

While meat products are a major contributor to E.coli outbreaks, other areas causing outbreaks? can be person to person contact, lake water and animal contact to name a few.

We appreciate and look forward to your comments

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Have you developed lean procurement practices?

November 3rd, 2009

The term “lean” as it applies to our subject was coined to describe Toyota’s business during the late 1980s by a research team headed by Jim Womack, Ph.D., at MIT’s International Motor Vehicle Program. According to lean.org; the idea behind lean organizations is to maximize customer value while minimizing waste. Simply, lean means creating more value for customers with fewer resources.

In Lean Thinking, by Jim Womack and Dan Jones, the authors suggest that companies or organizations think about three fundamental business issues.

1. Purpose: What customer problems will the enterprise solve to achieve its own purpose of prospering?

2. Process: How will the organization assess each major value stream to make sure each step is valuable, capable, available, adequate, flexible, and that all the steps are linked by flow, pull, and leveling?

3. People: How can the organization insure that every important process has someone responsible for continually evaluating that value stream in terms of business purpose and lean process? How can everyone touching the value stream be actively engaged in operating it correctly and continually improving it?

So, how does this apply to the procurement process? A typical misconception is that lean is suited only for the manufacturing process. This is not true. Lean applies in any and all businesses for any and all processes. Some areas you might consider relative to a lean procurement process would certainly include but not be limited to the following.

1. How many internal resources are dedicated and at what cost to procuring products and services for resale or internal use?
2. How much time do these resources spend to review and renew contracts?
3. How many new sources of supply are vetted regularly to insure you are receiving the best possible product at the best possible price?
4. How long have you been doing businesses with existing suppliers in every category?
5. What are your Procurement Key Performance Indicators and how often do you review them?
6. Do your Procurement KPI?s link directly with your corporate KPI?s?

Ultimately a lean organization understands both internal and external customer value and focuses its key processes to continuously improve both. Your solutions provider should have tools to help you evaluate your current process and suggestions as to how to reduce cost and infrastructure to support a lean procurement organization.

We look forward to and appreciate your comments.

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Here’s another great green idea. Source Soy Based Ink Toner

November 2nd, 2009

If you have been following our blog posts, you should remember that we have had many that focus on efforts you can undertake in making your business green. If you are just looking for a place to start, or are looking for additional ways to reduce your environmental impact or carbon footprint, here is one more suggestion.

It’s a safe bet that you are using laser printers at your business and they probably hum quite a bit during the work week. You may even have a thoughtful blue paper recycling container near the copier or even near every printer. You may even use recycled paper. The next step is a logical one; use environmentally friendly soy based ink for your laser printers.

In my opinion, the two best environmental reasons to use soy based ink are as follows. One, soy ink does not emit VOCs or volatile organic compounds. Two, soy ink is not petroleum based.

If you still need more reasons to switch? Assuming that you are already recycling paper, you will be glad to learn that soy based ink is said to make recycling the paper quicker and easier. Also, this option opens you up to new sources of supply. The next time you run a reverse auction for toner, you will have more options, greater price compression and another notch in your environmentally friendly tool belt.

Now you need to brag about it so that others can take their lead from you including your suppliers and customers. If you have implemented the full array of green printing mentioned in this blog, you have earned the right. Your customers will be happy to hear that you have made the right choices.

If you would like to learn more about environmentally friendly practices for your business, please visit www.SafeSourcing.com and check out our blog archives and our sourcing wiki. You will find much more information there.

We look forward to and appreciate your comments.

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Here’s another great green idea. Source Soy Based Ink Toner

November 2nd, 2009

If you have been following our blog posts, you should remember that we have had many that focus on efforts you can undertake in making your business green. If you are just looking for a place to start, or are looking for additional ways to reduce your environmental impact or carbon footprint, here is one more suggestion.

It?s a safe bet that you are using laser printers at your business and they probably hum quite a bit during the work week. You may even have a thoughtful blue paper recycling container near the copier or even near every printer. You may even use recycled paper. The next step is a logical one; use environmentally friendly soy based ink for your laser printers.

In my opinion, the two best environmental reasons to use soy based ink are as follows. One, soy ink does not emit VOCs or volatile organic compounds. Two, soy ink is not petroleum based.

If you still need more reasons to switch? Assuming that you are already recycling paper, you will be glad to learn that soy based ink is said to make recycling the paper quicker and easier. Also, this option opens you up to new sources of supply. The next time you run a reverse auction for toner, you will have more options, greater price compression and another notch in your environmentally friendly tool belt.

Now you need to brag about it so that others can take their lead from you including your suppliers and customers. If you have implemented the full array of green printing mentioned in this blog, you have earned the right. Your customers will be happy to hear that you have made the right choices.

If you would like to learn more about environmentally friendly practices for your business, please visit www.SafeSourcing.com and check out our blog archives and our sourcing wiki. You will find much more information there.

We look forward to and appreciate your comments.

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Stimulus Dollars Abused? Do we need another BPA study?

October 30th, 2009

How many studies need to be done by how many organizations over how many generations in order to come to the same conclusion?

When we live through an economic condition like we have had to for the last couple of years. An economic condition that requires stimulus dollars from the government to get it kick started, how in the world Thirty Million Dollars ($30,000,000.00) of those funds can be approved for studying BPA.

We can?t event get banks to approve loans to small business which we all know are the heart of any sustainable economic growth. But we can allocate this absurd amount of money so that The National Institute of Health can study BPA.

This author thought these funds were to stimulate the economy. According to the researchers part of the study will look to see if exposures to Bishenol A can affect multiple generations. The key word here is generations. This probably means there will most likely be more money spent in the future.

As this author has discussed in a number of posts, Bisphenol A or BPA is a chemical that is used in plastics such as baby bottles and as a lining of metal cans used for food distribution.

If you were to Google BPA, you would receive 6,000,000 hits. If you were to Google Bisphenol A you would receive another 2,000,000 hits. In this data you can find where other countries have banned the use of the chemical and or found alternatives to this chemical because they have data that indicates what this new study is looking to review again.

Well, it is Halloween season and it continues to scare the heck out of this author as to how the economic stimulus dollars continue to be mismanaged.

We look forward to and appreciate your comments.

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Sourcing Generic Drugs has its own group of challenges

October 29th, 2009

Primary amongst those is that large pharmaceutical companies often spend millions of dollars protecting their patents from generic competition.

As such, it is not the easiest thing to find suppliers that provide all line items in a generic event that a retailer may want to take to auction. The U.S. Food and Drug Administration offers a one hundred and eighty (180) day exclusivity period to generic drug manufacturers in specific cases. During this period only one or sometimes a few generic manufacturers can produce the generic version of a particular drug.

It may be obvious to readers, but requires restating that the principal reason retailers even care about generic drugs is that it can save there customers and insurance companies substantial amounts of money. This does not necessarily help retailers in an era of earning comparisons when a high priced prescription drugs patent expires as sales of the generic equivalent is a negative drain on top line sales.

One benefit to retailers is that it may be relatively easy to drive lower prices of generic medicines over the long term as competition increases among producers once these drugs no longer are protected by patents or exclusivity periods.

Locating suppliers or agents for offshore suppliers is an ongoing task and fairly time consuming when hosting a generic drug event. As such, it is important to have an adequate source of suppliers that you can rely upon. It also helps if you have a list of their products in your database and associated NDA numbers to save time in the discovery process. Ask your solution provider how many generic suppliers they have in their database and what RFI information they have on file for your review.

We look forward to and appreciate your comments.

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Northern Exposure. Explaining The Canadian Food Safety Institute.

October 28th, 2009

The Canadian Food Safety Institute (CFSI) was established to help address the issue of the shortage of competent Food Safety Auditors across Canada

The Canadian Food Safety Institute (CFSI) was created and developed after series of exploratory meetings and consultations. The Canadian General Standards Board (CGSB) in Ottawa and others in the Canadian food industry have raised the issue of the lack of trained certified Food Safety Auditors in Canada. Food Inspectors, Auditors and Consultants programs are available at various fees and rates. Also ISO 9000 and ISO 14000 auditors and consultants are available to food organizations that need them. However, job postings and request for proposals for Food Safety Auditors have sometimes achieved only one or two fully certified candidates.

Safesourcing follows the actions and guidance of CFSI in our supplier research and certification process. If you are interested in sponsorship or membership of this organization please visit their website www.canadianfoodsafetyinstitute.ca

We look forward to and appreciate your comments.

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