What happens when your supplier forgets that you are the customer?

July 24th, 2020

Sometimes, maybe more often than not some vendors forget who the customer is.

 

Today’s is from our archives at  SafeSourcing.

After contract negotiation, sometimes a vendor will forget who the customer is. This can be detrimental if it occurs in the quality of their perishable products.

When it comes to the quality of perishable products sold, it is important to have a quality check in place.  This is important when it pertains to perishable foods that don’t meet minimum standards and agreed upon expiration dates.  Without a quality check in place, there will be an opportunity with spoilage which will result in additional shrink then originally budgeted.

Two of the most effected categories in retail grocery are produce and dairy.  Fresh produce is a minimum requirement or your customer.  Typically produce is one of the first products you see when you enter a retail grocery store.  It has to look great.  The relationship you have with your vendor is important.  Sometime vendors try to implement a standard reduction for spoilage credits which is the same across all stores regardless of their actual spoilage.  This standard helps some stores and hurts others.  In the world of retail grocery, every penny counts and it is important that all credits are accounted for properly by store location. With dairy, you are only getting 7 days to sell your products due to sell dates; therefore, you set yourself up for spoilage.  Vendors should be held to giving you at least 14 days to sell the product before spoilage.

It is important to not allow your suppliers dictate to your company’s product expiration dates.  Regardless of the price set during negotiation and contract time, there was an agreement with the supplier that they would supply you quality products.  They need to be held to that agreement.

SafeSourcing does the due diligence to ensure all proper terms and specifications are included in the documents to set minimum standards and expectations.   These documents serve to remind suppliers of the quality and service expectation agreed upon at negotiation and contract time.

For more information on how SafeSourcing can help you with insuring fresh perishable products, please contact a SafeSourcing Customer Service representative.

We look forward to and appreciate your comments!

 

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The Difference between Procurement and Purchasing and the Primary Role of a Purchasing Department

July 23rd, 2020

The terms purchasing and procurement are used interchangeably, but.......

 

 

Today’s  post is from our archives at  SafeSourcing Inc.

The terms purchasing and procurement are used interchangeably, but despite their apparent similarities they do have different meanings. I can’t tell you how often we are asked, what do  you mean by procurement or eProcurement?

Procurement involves the process of selecting vendors, establishing payment terms, strategic vetting, selection, and negotiation of contracts. Procurement is concerned with acquiring (procuring) all of the goods, services, and work that is vital to an organization. Procurement is, basically, the  umbrella term that includes purchasing.

Purchasing, then, is a subset of procurement. Purchasing generally refers to buying products or services whos prices have already been negotiated  this may include shipping and receiving details and payment terms as well.

Because purchasing is a process within the overall procurement process, both procurement and purchasing are often used interchangeably. In the business world, the practice of using similar terminology seems to work, although it can sometimes be a little confusing and cause problems like rouge sourcing and or tail spend mismanagement.

To sum up: Procurement deals with the sourcing activities, negotiation, and strategic selection of goods and services that are usually of importance to an organization. Purchasing, however, is the process of how goods and services are ordered. Purchasing can usually be described as the transactional function of procurement for less vital goods or services.

Purchasing departments are responsible for procuring supplies. The development of strategic planning and the arrival of just-in-time purchasing, make purchasing a more crucial business function. Today, purchasing is often referred to as part of supply chain management and the purchasing department has taken on a larger and more vital business role. Purchasing departments often work alongside product development teams to source materials and determine cost of the finished product. Purchasing departments may use e-procurement companies, like SafeSourcing, Inc., trade publications, source suppliers, or go straight to the manufacturer. Finding the correct item at the correct price can be difficult, and purchasing departments may also work to assist suppliers in  helping to manufacture the item needed. This can involve providing considerable assistance to the supplier.

For more information on how SafeSourcing can help your Purchasing Department procure goods and services please contact a SafeSourcing Customer Service Representative. We have an entire customer services team waiting to assist you today.

We look forward to and appreciate your comments

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Are You Still Printing And Filing Documents in Filing Cabinets?

July 22nd, 2020

My co-worker once asked me how many trees I planned on killing one day when I printed a hard copy of a Request for Proposal I had written!

 

Today’s post is from our archives at  SafeSourcing Inc

paperstacks

 

 

 

 

 

 

 

 

I suppose I am “old school” to have paper in hand and make my edits in red pen, then make my revisions to the electronic document, and save those edits in our document management system. Now I have a hard copy in a filing cabinet that, more than likely, no one will ever see and eventually be shredded.

We are a Green company, and I am becoming more cognizant of that by limiting what I print, and save more trees. By utilizing the document management system, the original drafts, as well as all of the edited copies are saved, anyone from our company, at any point and time, can visit those documents and follow the train of thought from beginning to end. It saves time and paper to have those documents accessible.

From our website: www.safesourcing.com

SafeDocument™

SafeDocument™ is a document repository that allows companies to collaborate on documents through an online tool that is a cloud-based SaaS offering available through simple internet access. This tool Provides document sharing and collaboration options where users can organize, edit, protect, and track their documents.

SafeDocument™ includes safety features and controls that enable users to safely share large files across their organization, including the ability to save and recall multiple versions of a document and a notification system that alerts users when changes to the document have occurred.

Implementing SafeDocument™ provides companies with a cost-effective alternative to enterprise content management solutions that is safe and easy to use.

To learn more about SafeDocument™ SafeSourcing can assist you in exploring your document management procedures for your business or on our “Risk Free” trial program, 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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Where are all the coins?

July 21st, 2020

Do you find it strange the way certain things or disappearing because of the COVID-19 virus?

 

 Today’s post is by Troy Lowe; Vice President of Development at SafeSourcing.

Is it just me or do you find it strange the way certain things are disappearing because of the COVID-19 virus? First it was toilet paper. Why toilet paper? If you are locked down for a month or so how much toilet paper do you actually use that you need to hoard it? Then it was hand sanitizer and sanitizing wipes. This one I get because this is actually something that you would use more than usual to keep your surroundings clean and safe. We also have had a shortage of yeast and flour. Really, when was the last time you made a loaf of bread? And what makes you think you are going to start now. The latest thing to get my attention is this weird coin shortage. Where did all the coins go? Is everyone hanging on to them for safe keeping? After going to a few places over the weekend and seeing the signs about the “coin shortage” I decided to do some research and see what is going on. According to the Federal Reserve it is because of a dramatic deceleration of coin circulation because of the adjustments made by consumer’s patterns and payments during COVID-19. The Federal Reserve last month said that it would have to start rationing the distribution of coins putting limits on how much banks would be given. This has caused the banks to give less currency to such places as stores and gas stations. Places like these account for about 165 million transactions a day. According to the US Mint, they have put together a coin task force in an effort to reduce the disruption to coin circulation. The reason for the recent demand for circulating coins is thought to be caused by the reduced retail sales and the decrease in the number deposits from third-party coin processors. Because of the lack of coins, places are asking customers to use exact change or to use debit, credit, or other forms of payment. If you would like to do something to help end the shortage they are recommending that people take their coins and trade them in for cash at your local bank or in the coin counting machines that can be found at local grocery stores. Below are some other items that are hard to find due to COVID-19.

  • Thermometers
  • Water Filters
  • Bikes
  • Bakeware
  • Exercise Equipment
  • Swimming Pools
  • Hair Clippers
  • Freezers
  • Laptops
  • Game Consoles

Interested in learning how SafeSourcing can help your company run more efficiently? If you would like more information on how SafeSourcing can help you, please contact a SafeSourcing Customer Service representative.  We have an entire team ready to assist you today.

 

 

 

 

 

 

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Rant Warning: Does etiquette still matter to vendors and buyers in eProcurement Part II of II?

July 20th, 2020

Don’t make the mistake of thinking eProcurement removes the human element

 

Todays post is from Dave Wenig is the Senior Vice President of Sales and Services at SafeSourcing Inc.

Now that I’ve gone on my rant about the lack of etiquette that I have been observing recently, perhaps I should get off of that soap box and offer some suggestions.

In my previous posting, I outlined two issues as I see them. Here, I’ll offer some suggestions for each as food for thought.

  • Return communication in a timely manner. As previously discussed, this needs to improve because we’re judging you from the minute we first contact you representing our customer the buyer. Your interactions with us are tracked and the customer sees them. If you don’t think that being prompt gives you an edge over your competition, you’re wrong.
  • Communicate with courtesy and respect. Perhaps you have received our invitation to quote and you are not ready to decide if you are able to provide a quote. That’s alright! I might suggest that you reply by thanking the sender for bringing this to your attention and promising to review and reply again at a later date. What good does that do? First, remember that all of your interactions are being watched and tracked. There is a real live team of people who are focused on you and your competitors at the moment. Treat this like an interview process. Second, this will help the sender. At SafeSourcing, no response is not an answer. It’s our job to make sure our vendor partners have received the invitation to provide a quote and that we provide an equal opportunity to the invited participants. So, someone is going to have to keep emailing and calling to confirm that you have received the invitation and that you understand the buyer’s needs. Telling them that you have received it will allow them to focus elsewhere and to stop flooding your inbox and voicemail. It’s actually pretty easy to reply with a brief note, but many do not.

Also, remember that etiquette is a two-way street. At SafeSourcing, we do our very best to follow these same types of rules as a policy. We also try to encourage this type of behavior with our buyers. We always send thank you notes and we even ask every vendor partner for feedback. When possible, we strive to share notices of award and non-award to the vendor partners who took the time to provide quotes. This is the least we can do and we often do more. Remember, an RFQ is absolutely a human process. Yes, the process is facilitated by computer software but that does not mean we should forget how to behave and leave etiquette behind.

For more information, please contact SafeSourcing.

 

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Rant Warning: Does etiquette still matter to vendors and buyers in eProcurement Part I of II

July 17th, 2020

Do not make the mistake of thinking eProcurement removes the human element!

 

 

Today’s post is by David Wenig, Senior Vice President of Sales and Services at SafeSourcing Inc.

I am going to get up on my soap box for a couple of minutes if that is alright with you…

Call me old fashioned, but I still try to interact following professional etiquette. It is not necessarily a written code, per se, but more a set of guidelines that have been embedded in my brain over years of training and real-world experience. I make a point to reply to emails and voicemails promptly either in the same day I received them or the next day if I really cannot return the communication faster. I try to include nice notes of thanks when working with customers or vendors who are trying to help me. It is not hard; these are just a couple of things that I do as a matter of professional courtesy.

But is there even still a need for this type of behavior? From time to time, I hear that the eProcurement process removes the human element from the negotiation and boils the whole procurement process down to a computerized negotiation. The last time I was told that, I decided to spend a little time considering that claim with an open mind.

I quickly decided that there is absolutely still a need for etiquette and professionalism in eProcurement. I will elaborate, of course, but I am still surprised I feel the need to.

  • Return communication in a timely manner. Pretend for a moment you represent a company that sells a product or service. Now, also pretend that it is your job to make sure that other companies buy that product or services. Congratulations! You are pretending you are in sales. With that in mind, you receive an invitation to provide quotes (RFQ) for $1,000,000 worth of the product or service you are selling. Bear in mind that you are paid based on your ability to sell. What do you do? SafeSourcing sends invitations like this all the time. The values differ, but you get the idea. Many of the contacts we send these to do not respond at all. It is not just that they are delayed or that they somehow missed the email. SafeSourcing’s associates absolutely hound these salespeople for a response. Sometimes it can take weeks just to get a vendor to engage and consider an opportunity to sell that we brought them on a platter with a little bow tied on it. This is such a systematic issue that we must accommodate that within our timelines. That means a salesperson who is non-responsive is technically causing a buyer’s project to be delayed. You might think that this is all happening on computers and in the dark, but we see your behavior.
  • Communicate with courtesy and respect. Sometimes I wonder if this is a lost art. In the example above, would you ignore SafeSourcing’s attempts to contact you or would you respond in some simple fashion.

That is the end of my rant for today. Because I do not appreciate when others criticize without offering suggestions, I will share my thoughts on how to address these issues in Part II of my post on Monday

For more information or speak with David, please contact SafeSourcing.

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Verifying Data and how People Believe Fallacies

July 16th, 2020

Do you know if the facts support what you believe are true?

 

 

Today’s blog is by Margaret Stewart, Director of HR and Administration at SafeSourcing.

In today’s social media prevalent world and access to every kind of information, how do you determine what is true and what is not true? In my own experiences, many people tend to believe things that align with their own personal beliefs rather than the credibility of the source. For example, one may be more inclined to defend an untrue or misleading news article if it ultimately supports their political, religious, or moral position, and this holds true across the board. In fact, this is so common there is a name for it – Confirmation Bias. Confirmation bias is so strong that two people with opposing views can read the same information and have different interpretations that confirm their own beliefs.

For many, once the false information has been said, they may forever consider it true regardless if it can be proven untrue. This is especially true if it was the first time one heard about it. This is called the Anchoring Bias. The Anchoring Bias is where a person will regard a piece of information true if it was presented first, not necessarily if the data is true or misleading. From here they build upon that idea and rarely change their opinion from the one initially presented.

If a piece of information can be proven untrue, people often determine their own opinions were always in line with it. This is called Hindsight Bias. Hindsight Bias states that people will reflect back on their previous predictions and insist they were in line with what actually happened, which is why it is sometimes also called knew-it-all-along bias. For example, if someone is going to flip a coin and asks you to mentally predict what the outcome will be, once the coin is flipped and has a result, you will likely recall that you predicted it correctly.

Ultimately, there are a number of ways we can convince ourselves that what we read, what we believe, and what has happened all align with our own personal views – regardless of whether or not it is true. The three biases mentioned above are just a small amount of cognitive tricks our minds can play on us without even knowing it. So how does one overcome a bias? First, acknowledging that there are these biases can help one realize they have become susceptible. Another great way to uncover biases is to seek other perspectives. Sometimes just listening to someone else’s point of view can bring in new light to any idea, problem, or situation. This idea can especially hold true in business. For example, a business may need more of a product, but the supplier keeps raising their price. This business may believe that the product they order is the best and no other person can supply it for them. However, but reaching out for a new perspective, like a procurement partner such as SafeSourcing, this business may find out that not only are there a large number of options available for said product, but also a large number of people ready to provide that product with benefits above what they currently have.

If you want an outside perspective on the challenges your business faces, help with souring the products you seek, or on our Risk Free trial program, please contact a SafeSourcing Customer Service Representative. We have an entire team ready to assist you today.

 

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Why it is Important to Know What you are Buying…

July 13th, 2020

For years you purchase from the same supplier! WHY!!!!!

 

Today’s post is from our archives at  SafeSourcing Inc.

For years you purchase from the same supplier, expect the same product level, anticipate some price increases due to market changes. You think you know what you are ordering; however, when you want to take your product out to test the market prices from other suppliers is when you realize you have not been purchasing what you thought you were.

In procurement we see this often whether it be elastomer requirements in an O-ring or broiler chickens. History has told us that elastomers are critical to the function of mechanics, as we lost the Space Shuttle Challenger in 1986 due to an O-ring failure. There are over 24 synthetic rubber and thermoplastics that make up O-rings and over 8,000 different sizes. Does your product require heat and freezing variables? Does your product require a specific lubricant that is EPDM compliant?

In another example, recently a client wanted to test the market for their diced chicken needs. They provided their current product specifications and pricing and quickly found out that the major manufacturers could not meet the client’s needs. Why? Because the client thoughts they were getting broiler chickens from their current supplier and they were receiving fowl chickens. Fowl chickens are the older chickens that can no longer produce eggs and the meat is considered by some to be a tougher meat. Needless to say, this was a big awakening for the client and they needed to re-evaluate their needs for their product manufacturing.

Are you sure you are purchasing exactly what your specifications require? Are you testing your suppliers products to ensure quality, quantity, safety expectations are met? Are you paying a fair price for your product needs? If you answered no to any of these questions, SafeSourcing can assist you in exploring your procurement solutions for your business or on our “Risk Free” trial program for RFPs and RFQs, 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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Sourcing with RFIs, RFPs, RFQs and Surveys – Part 5 of 5

July 10th, 2020

How do I pull all of my information and a Request For Quote together into one information package?

 

 

Today’s post is from our archives at SafeSourcing Inc.

This past week we have covered a lot of ground in defining the different methods of gathering internal and external details needed to help make important procurement decisions.  Today we will wrap the discussion up by tying those processes into the final piece of the puzzle of gathering competitive pricing.

The Request For Quote, RFQ, process is usually one of, if not the last process, that occurs before a company begins contract negotiations with a vendor.  It can take many forms from online bid submission, to blind paper bids to more recent technology eRFQ process referred to as a “Reverse Auction”.  The goal of this phase no matter how the information is collected is the same; procure the most competitive prices on a specific spend so that a contract can be negotiated and finalized.

Many times the RFP process will double as an RFQ where the details about a company and their capability to deliver the items or services you need are combined with a collection of specific pricing information as it relates to the project.  When this occurs vendors are encouraged to submit their best pricing but that pricing alone will not determine the award of business and will not be their best price!

Even if the RFQ portion is included in the RFP, many companies will take a handful of vendors or a “short list” and allow them the opportunity to be more competitive in their pricing ( which is why, when you ask for best and final it never is), especially when vendors are so similar in what they are offering in every other way.  This gives vendors the opportunity to differentiate themselves in the process in a way they may not be able to do in the way of experience or in the goods they are bidding on alone.

RFQs can often be run with no additional information gathering at all.  For instance if you have purchased 100,000 plastic bags for the past 25 years, you know the breakdown goes to these 4 locations and you have all the specifications defined, it is appropriate and even beneficial for savings to go straight into an RFQ.  This event allows companies to stand out in an area they have control over in order to get your business.  In this case, going straight to an RFQ makes perfect sense and in order to begin realizing those prices as quickly as possible it should be the move every company proceeds with.

The other nice thing about RFQs is that they can provide a small channel to gather information from the vendors that would help clarify any other value they might be able to offer.  This is useful for situations where price is the most important criteria but you want to provide the possibility that vendors may be able to give you additional services or terms that would allow them to distinguish themselves in ways they may not be able to do in price alone.

At the end of an RFQ you will have details about the suppliers and their capabilities either from historical spends or through an RFI/RFP process and you will have all of their pricing needed to make a decision as to who the best supplier for your company will be, taking you to the “endpoint” of the process which is contract negotiation and finalization.

During this 5 part post, we have covered several different processes in procuring products or services, but it all boils down to this: you have a beginning point which is the need for something and you have the end point which is the signed contract defining how that need will be fulfilled.  In between is the place where the type of information you have and the type of information you need must be evaluated so that the journey from beginning to end is as smooth and organized for your company as possible.

For more information on SafeSourcing and how we can assist your company with sourcing these goods and services, please contact a Customer Service Representative for more information.

We hope you have enjoyed this week’s series and look forward to and appreciate your comments.

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Sourcing with RFIs, RFPs, RFQs and Surveys – Part 4 of 5

July 9th, 2020

What if I need more additional internal information rather than external?

 

 

Today’s post is from our archives at  SafeSourcing.

During the last week we have been focusing on the gathering of external information in order to make the proper procurement decisions.  Today we will be looking into when it is necessary to gather internal information before reaching out to the suppliers even happens.

Looking back at our previous posts in Part I, Part II  and Part III there were some basic questions that needed to be asked before every sourcing project.

  • Do you know who you vendors are for a specific item or service across your company and do you know how much you spend with each?
  • Do you have current contract or agreement details?
  • Are your divisions, regions or offices pleased with the quality of product and service they get currently?
  • Are there other companies out there that parts of your business would like to include but don’t currently today?

The answers to these questions will dictate whether or not you know enough about the sourcing project you are about to begin to proceed with a Request For Information/Proposal.  Before any communication goes to the external supplier community it is critical to have an understanding of what your company is doing today and where the potential holes are in the procurement processes for these goods or services.

Proceeding with an internal survey involves a number of factors to consider.

  • What tool will I use to collect the information from the company and does that tool allow for submission of the survey without requiring login information?
  • Who will handle the survey process including the initial communication, gathering and return of the collection of responses? (Many times your 3rd party sourcing partner will provide this service for you)
  • Who do I want to collect information from?  (Many times this will be dependent on how your company is divided, ie Districts, States, Divisions, Territories)
  • What information do I need to collect in order to move forward intelligently with an RFI/RFP?

The keys to internal surveys are to make them as succinct as possible and to make sure you include everyone you need input from.  The first way to derail a sourcing project is to find out 2 weeks into it that someone’s input was not collected and sends the project back to the beginning.

Another very important key for internal surveys is to attach a manageable but small window for answering.  More often than not, the more time you provide respondents to answer the worse your response rate is and the more delays you introduce.  Tight timeframes usually lead to respondents taking the time right then to answer as soon as they get the invitation to participate.

In the end the goal of the internal survey is to have the information needed to begin speaking with suppliers.  To refer back to a phrase used in Monday’s blog, internal surveys are conducted in order to “know what you don’t know.”

Tomorrow we will wrap up this series by discussing how all of this information ties into the formal detailed price gathering or Request For Quote.

For more information on SafeSourcing and how we can assist your company with sourcing these goods and services, please contact a Customer Service Representative for more information.

We look forward to and appreciate your comments.

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