Knowledge is Power

November 19th, 2018

Using SafeSourcing's knowledge to your benefit!

 

 

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

At SafeSourcing, we host many eProcurement Request for Quote (RFQ) events. In fact, this is a large portion of our services because of the savings that this generates for our customers. If we’ve spoken before, you’ve probably heard me talk about this. Specifically, that while each of SafeSourcing’s customers might source a particular category once a year or once every two years, SafeSourcing is likely sourcing that same category many times a year.

This is where SafeSourcing’s knowledge can become your power. I’ll offer this following example, but just know that this is one of many examples that we could share.

Many of our retail clients sell hot and cold beverages. Of course, these come in a variety of cups with different lids and different straws, but for this example, I’m talking about foam cups. Many of our customers are aware of 1-2 suppliers that offer these cups. We actually have more. That wider supplier base generates real savings in an RFQ scenario. It’s easy to talk about recent savings percentages or to speak generally, but consider this next specific statement.

At SafeSourcing, our retail convenience store customers have saved an average of about $5,000 per store on their foam cups, lids, and straws in the past year while still awarding to their incumbent vendor.

What this statement means is that there is a very strong likelihood that you can save on this category too. If you are a convenience store operator, and you have 50 stores where you use these products, that could be a quarter of a million dollars that you’re overpaying per year. Maybe it’s not the exact case for you, but the data tells me that it’s very likely. Shouldn’t you use SafeSourcing’s knowledge to your benefit?

As I said, this was just one specific example out of many. The only way to really tap into SafeSourcing’s category knowledge is to talk with us.

  • Ask us a specific question about category savings.
  • Ask our opinion on the current market conditions for a category.
  • Ask about the timing of a category due to harvest seasons.

I’ll share one more thing that we know at SafeSourcing; if you aren’t using SafeSourcing for our knowledge and our RFQ services, then you’re overpaying on all your spend.

For more information, please contact SafeSourcing. 

 

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Kroger Offers a new way to Shop

November 16th, 2018

I was in my local Kroger the other day and saw a kiosk full of scanners...

 

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

I was in my local Kroger the other day and saw a kiosk full of scanners.  So, when I got home I decided to go online and see what they were all about.  It turns out the scanners are part of their new shopping experience called Scan, Bag, Go.  This new way of shopping is available for people that would like to scan and bag the items as they walk throughout the store.  Not only can you use the scanners, but you can also download an app to your device and use the device instead.  To start, you need to log into the scanner or app with your account and as you shop you just scan the item and place it in your bag or cart.  You must scan each item one at a time, and for produce, you bag the items, scan the barcode on the item or the shelf tag, scan a barcode on the closest available scale and follow the directions for weighing the items.  As you are shopping, you can see your running total and fuel points accumulated.  So using a calculator or cell phone are no longer needed for those who like to keep track of their spend during the shopping process.  When you are finished shopping, just head to self-checkout and scan a barcode on any available machine and complete the pay process.  This new offering is a speedy way to get what you need and avoid the hassle of the long checkout lines.

Interested in learning how SafeSourcing can help your company run more efficiently? Like to try a risk-free trial? Please don’t hesitate to contact a SafeSourcing Customer Service Representative. Our team is ready and available to assist you!

We look forward to your comments.

 

 

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Tactical and Strategic Sourcing

November 14th, 2018

Procurement Sense: The Difference Between Tactical and Strategic Sourcing

 

Today’s post is from our SafeSourcing Inc Archives

Let’s define each one then note the differences. This will aid in better understanding how procurement professionals justify adopting one sourcing method or the other.

Strategic Sourcing

Strategic sourcing is a precise, long term approach to acquire supplies and or services for an organizations current need at the lowest total cost of ownership (TCO) and the lowest risk to the supply chain. This process creates a relationship between the customer and vendor that will ensure continuous improvement in quality, delivery, cost and service while providing the means to attain ideal proficiencies with both parties. There are three key components of strategic sourcing; spend analysis, market research and supplier evaluation and relationship management. These steps require a specifically trained staff using a specific software tool to achieve desired outcomes.

Tactical Sourcing

Tactical sourcing is a short term, transactional activity practiced in small to medium companies. This approach to purchasing goods and services uses quick quote and order processing to support the company’s production or needs. This approach does require management within the company to ensure the right material is purchased at the right price and at the right time. Unlike strategic sourcing, companies are not concerned with the vendor’s core capabilities or creating a long-term relationship.

So based on the two sourcing methods one might think that the strategic approach makes for best practices compared with the tactical method. So why do many companies choose the latter of the two.

Consider a small to medium sized company where purchasing has the ability to use just about any supplier that fits their need. Typically, buyers will use their own best judgement to find the right supply that meets both their pricing and best shipping dates. This is very common in companies that don’t have the luxury of time or technology to assist them from shifting form tactical to strategic purchasing. Their biggest concern is to keep things moving while keeping an eye on costs, hence why tactical sourcing makes the most sense.

Now compared this to a larger company where they could have a suite of ERP technology and a dedicated team of purchasers. They have the time and resources to properly vet suppliers, develop reports, perform a spend analysis, and conduct market research. With these capabilities, procurement can negotiate lowest total cost of ownership (TCO), taking into consideration, quality, price, delivery and lead times. These buyers will have a deeper understanding of the company’s overall needs and requirements. Taking a strategic sourcing approach makes the most sense in these cases.

Finding the best sourcing method for any size company should be a priority, yet time and time again, companies fail to implement any thoughtful process or policy costing them time and money. SafeSourcing, with its dedicated staff and E-procurement suite of tools could do just that. Lower your risk and increase savings without hiring additional staff or buying expensive software. It’s a win-win!

For more information on how SafeSourcing can assist you in exploring your procurement solutions 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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November 13th, 2018

CVS Health’s $69 billion bid to acquire insurer, Aetna, has been approved.

 

 

Today’s post is by Gayl Southard, Administrative Consultant at SafeSourcing Inc.

CVS Health’s $69 billion bid to acquire insurer, Aetna, has been approved by The Justice Department (JOD) . This could redefine how Americans get insurance. The JOD requires CVS to divest Aetna’s Medicare Part D prescription drug plan business for people as part of this deal. CVS has proposed selling that part of the business to WellCare Health Plans, which would satisfy the JOD’s request. “The divestitures required here allow for the creation of an integrated pharmacy and health benefits company that has the potential to generate benefits by improving the quality and lowering the costs of the health care services that American consumers can obtain,” Assistant Attorney General Makan Delrahim said in a statement.1

This merger would allow the Woonsocket, Rhode Island-based CVS to expand its drugstore-pharmacy (with more than 9,800 locations) into a healthcare coverage and medical care delivery destination. This would also allow more customers into CVS facilities for routine health ailments and away from costly emergency hospital visits. Aetna is the third largest U.S. health-insurance company and fourth-largest individual prescription drug plan insurer.

CVS Health indicated the Aetna acquisition is expected to close within the fourth quarter of 2018. Once the merger is completed, Aetna will run as a standalone business within CVS.

For more information on SafeSourcing, or on our Risk Free trial program, please contact a SafeSourcing Customer Service representative. We have an entire team ready to assist you.

References….…………………………………………………………………

Mike Snider, USA Today,10/11/2018

 

 

 

 

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It’s just a pallet; or is it? Part II of II

November 12th, 2018

Aren’t pallets all the same; other than size and shape, what makes them different and should I own or pool (use a managed service)?

 

Today’s post from our  SafeSourcing, Inc Archives

Use of Pallets: While pallets and palletization were once considered to be powerful components of material handling strategy, today, industry takes the practice largely for granted.  When the palletization concept was first introduced, however, it had a dramatic impact on the improvement of material handling efficiency. Rail cars, for example, that had taken two days to unload could subsequently be unloaded in just one or two hours.  Palletized products can be moved more quickly than by the manual handling of individual palletized cartons.

Benefits of this quicker handling include:

•   Faster turnaround of delivery vehicle and increasing operational efficiency of transport equipment
•   Dramatically reduced labor requirement versus manual handling
•   Reduced risk of temperature abuse for perishable products on unrefrigerated docks
•   With less manual handling there is less risk of product damage and reduced risk of worker injury. Palletized products can be moved more efficiently and stored more efficiently in warehouses and customers often prefer the receipt of palletized goods.
•   Pallets provide drainage and circulation for commodities requiring this, including fresh produce.

Grades of pallets: The GMA (Grocery Manufacturer Association) has determined the standard in which pallets are graded and thus is broken into four (4) different categories. Each category is a guideline to use when buying or selling pallets. The problem is that each category is open for interpretation and it’s important to verify exactly what you’re getting. Each category will have a price range and the price range will vary from region to region. The price will also vary based on the amount of available reconditioned pallets. Below are the four (4) different grading categories and their corresponding condition.

•   Premium – A very clean pallet that has probably been used only a few times. There is little if any repairs to the pallet. The pallet will have no plates and no companion stringers.
•   Grade #1 or A Grade – Typically this pallet has been repaired to close to its original condition. Broken stringers may have been replaced or repaired with metal plates. All damaged deck boards are replaced. This is a fairly clean pallet that is structurally sound.
•   Grade #2 or B Grade – Typically this pallet has had stringer damage that has been repaired by attaching an additional stringer alongside the damaged one. This is commonly referred to as a companion stringer, block stringer and double stringer. The “B” grade pallets usually have two (2) or less repaired stringers. The deck configuration on the “B” grade pallet is not always consistent because these pallets have been repaired many times.
•   Grade #3 or C Grade – Typically this pallet has been repaired numerous times. Most of the stringers on a “C” grade pallet will have companion stringers. The deck boards will be inconsistent in size, spacing and thickness. These pallets are usually in very poor condition and are accepted by few companies.

Owned vs Pool pallets: Many companies choose to buy their own fleet of pallets, but this is not always the best or most efficient thing to do.  What you need to consider…

Owning:

•   Cost: Depending on the amount of goods a company needs to transport, it can be very expensive to buy and upgrade a pallet fleet.
•   Management and tracking: Managing and tracking a rental fleet can be very hard work, if mismanaged, it can create huge problems if goods cannot be transported when needed.
•   Maintenance and cleaning: Once purchased, pallets will need to be continually repaired and cleaned in between usage, requiring the manpower, space and equipment to do this.
•   Storage: When not in use, pallets can take up a lot of space, which is inefficient and costly.
•   Fleet fluctuations: If a company suddenly has an increased order, or an order that requires a special type of pallet, then buying them just for these rare occasions is wasteful, as the rest of the time the overflow will just be gathering dust in storage

Pooling:

•   Flexible: You can rent as many or as few pallets as you need for each specific shipment, meaning you’re never over or under stretch with your pallet fleet.
•   Management and tracking: The pooling company can use their own specialist up-to-date management and tracking systems meaning you doesn’t have to worry about it.
•   Cleaning and maintenance: After each hire, the pallets will be inspected, repaired and cleaned by the pallet pooling company, before they are sent out again.  This means that you don’t need to worry at all about the expense of doing this yourself, and you know all the pallets will be up to standard before each use.
•   Storage: Once you’ve finished with the pallets you just need to hand them back to the pooling company with no need to set aside valuable space to store them.

As you see there are many things to consider before buying or pooling pallets in your business. Should you own pallets or use a service to manage them? What type of pallet do you really need? We at SafeSourcing are ready to help you through all the questions and help you lower your procurement costs.  For more information on how we can help you with your procurement needs 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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It’s just a pallet; or is it? Part I of II

November 9th, 2018

Aren’t pallets all the same; other than size and shape, what makes them different and why?

 

Today’s post is from our  SafeSourcing Archives.

If you’re in a business today that provides goods, supplies, equipment  and alike somewhere along the line these products most likely traveled on a pallet, either in the loading, shipping, delivery or receiving process.  Pallets are the most common method for this as well as being used for storage purposes.  In this article I wanted to share some key factors to consider when purchasing, using or accepting pallets, no matter the originating source.   In this blog my intention is to educate you a little more than you probably wanted to know about pallets.

First the definition,  pallet:  sometimes inaccurately called a skid (a skid has no bottom deckboards), a pallet is a flat transport structure that supports goods in a stable fashion while being lifted by a forklift, pallet jack, front loader, work saver or other jacking device. A pallet is the structural foundation of a unit load which allows handling and storage efficiencies. Goods or shipping containers are often placed on a pallet secured with strapping, stretch wrap or shrink wrap and shipped. While most pallets are wooden, pallets also are made of plastic, metal, and paper.

Types of pallets: although pallets come in all manner of sizes and configurations, all pallets fall into two very broad categories: “stringer” pallets and “block” pallets. Various software packages exist to assist the pallet maker in designing an appropriate pallet for a specific load, and to evaluate wood options to reduce costs.

•  Stringer pallets use a frame of three or more parallel pieces of timber (called stringers). The top deckboards are then affixed to the stringers to create the pallet structure.  A stringer pallet is also known as a “two-way” pallet, since a pallet-jack can be used from only two sides to move it. Two-way pallets are designed to be lifted by the deckboards. In a warehouse the deckboard side faces the corridor.
•   Block pallets are typically stronger than stringer pallets. Block pallets utilize both parallel and perpendicular stringers to better facilitate efficient handling. A block pallet is also known as a “four-way” pallet, since a pallet-jack may be used from any side to move it. Four-way pallets or pallets for heavy loads are best lifted by their more rigid stringers. A warehouse has the stringer side facing the corridor.

Efficiencies: organizations using standard pallets for loading and unloading can have much lower costs for handling and storage, with faster material movement than businesses that do not. The exceptions are establishments that move small items such as jewelry or large items such as cars.  But even they can be improved. For instance, the distributors of costume jewelry normally use pallets in their warehouses and car manufacturers use pallets to move components and spare parts.

Pallet pooling:  due to cost and a need to focus on core business, pallet pooling becomes more and more common. A pallet management company can help supply, clean, repair, and reuse pallets. Pallets should be seen as reusable packaging items. Every pallet that is built could potentially be used and used again until such a time when it will need to be replaced.

Stay tuned for Part II of: It’s just a pallet; or is it?

There are many things to considered before purchasing pallets, such as; should I buy new or used pallets, what grade of pallet is right for my business, do I want a service to manage the pallet inventory for me?  We at SafeSourcing are ready to help you through all the questions and help you lower your procurement costs.  For more information on how we can help you with your procurement needs 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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What Would You Do? ​

November 7th, 2018

Choosing between an easy renewal and greater savings.

 

 

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

We all have choices to make when it comes to managing our responsibilities. In procurement, we face choices with every purchase. When we enter into a new agreement, we have choices. When we renew an agreement, we have choices.

In this post, I’ll focus in on just one major choice that procurement professionals face when it comes time to renew an agreement with a vendor. Clearly, a renewal offers the purchaser an opportunity to review the current agreement and decide whether or not they intent to continue working with the vendor. This is also an opportunity for the vendor to make changes to the agreement, very commonly in the form of price increases.

However, the question of whether to renew with the incumbent vendor or not is a bit premature. The better question is around how we want to evaluate the agreement to make that decision. SafeSourcing clients know that they have access to a powerful set of eProcurement tools that will help them attain the best pricing possible with the best terms. If your vendor knows that you have these eProcurement tools, it’s natural that they might attempt to persuade you not to use them.

Do you want to negotiate the agreement fully, including using your eProcurement tools, or do you want to accept the offer that the vendor made for renewal? This question becomes a bit more complicated if the vendor offers a discount if you were to renew without eProcurement. What would you do?

Let’s assume that your vendor offered you a renewal and agreed to reduce your pricing by 10% and hold that pricing for a year and left all the other terms the same. That’s a pretty good offer, right? Maybe. If they offered that in a non-competitive environment, then I’d bet that they have additional margin beyond the 10%. The reason I believe this is because we see this scenario play out time and again with our clients. The client tells the vendor that they are going to host an RFQ and the vendor says there is no need and offers better pricing to avoid the process. Our average savings are well over 24%. Before making a decision to accept the vendor’s offer, it makes sense to talk through what savings levels SafeSourcing expects in a particular category.

It would be very easy to renew and stay with your incumbent vendor. However, knowing that you might be overpaying by 10% or more should give you pause. We always recommend that we discuss the category details and consider whether an RFQ is the right choice to help you make this decision. We usually recommend running the RFQ after that discussion. Either way, our services are always risk free, so there is very little to lose. So, what would you do? Would you use the available eProcurement tools and negotiate the agreement fully?

We’re here to help you make the choice that’s best for you and your company. Let’s talk before you agree to a renewal.

For more information, please contact SafeSourcing.

 

 

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The Importance of Finding the Right Supplier

November 6th, 2018

How do I go about finding a reliable supplier?

 

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

When procuring something that your business needs, it’s not a good idea to just look for lowest price.  Sometimes price alone is not enough.  You want to make sure that you are receiving a quality product from a supplier that can meet all of your needs.   One way to ensure this is to thoroughly vet your suppliers before the RFQ process begins.  One way to do this is to create a survey of detailed questions for each supplier to answer.  This can be done using a tool such as SafeSurvey™.  SafeSurvey™ allows you to create sections of questions that you would like clarification on before the RFQ process begins.  After the supplier research has been completed, questions are then complied and put together within the SafeSurvey™ tool.  An email is sent out to all potential suppliers with a link to the survey.  After the surveys have been completed, the data can be exported for further analysis.  Below are some questions that may be contained within the survey.

  • Business Name
  • Company Description
  • Date Established
  • Annual Revenues
  • Headquarter Location
  • Years in Business
  • References
  • Competitors
  • Delivery Methods
  • Volume Rebates
  • Standard Roll Out Program for New Customers
  • How are Orders Places
  • How are Back Orders Handled

If you are interested in seeing how SafeSurvey™ can help you in your vetting, feel free to contact SafeSourcing.   We can gather all the necessary information for you and help you decide which suppliers meet your needs.  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.

We look forward to your comments.

 

 

 

 

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Don’t be Predictable

November 2nd, 2018

Showing your hand before the game has started can spell disaster for any procurement.

 

 

Today’s Post is by Eli Razov, SafeSourcing  Account Manager.

Showing your hand before the game has started can spell disaster for any procurement. Predictability can weaken your ability to negotiate. More often than not, contract negotiations are scheduled according to contract end dates, holidays, and individual plans, instead of when market conditions are right or when the opportunity arises.

RFQs and contract negotiation templates are recycled with only minor revisions before they are distributed to vendors and suppliers. Suppliers are approached during certain times of the year only because “it’s always been like that” or because “that’s the way the industry works like that”. Neither of these statements is true. It is actually because we all just feel very comfortable with the routine. This comes at a price, remember we all work with the best of the best in the sales world. They are trained and paid to know procurement patterns to maximize sales. A procurement specialist predictability, combined with these skills, can have a negative effect on your business and can effect the credibility of a procurement team.

To prevent this, procurement teams should use all of the tools at their disposal, spotting opportunities, taking advantage of the market changes, and timing negotiations. Consider bringing RFQs or any negotiations up by a year. Consider using tools like our eRFX process. And always be open to new vendors and suppliers.

Being unpredictable can be a powerful tool even if change can make you uncomfortable. It may not make us friends but it will help us succeed and ensure profitability.

For more information on how SafeSourcing can assist you or on our “Risk Free” trial program, please contact a SafeSourcing Representative we have an entire team waiting to assist you today.

 

 

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Data Crash

October 30th, 2018

What do you do after your computer crashes?

 

 

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

No one likes to think about it or experience it, but computer crashes happen. Crashes can happen to anyone, at any time, and due to a variety of reasons, like viruses, heat, errors in the operating system, and disk fails.  If this were to happen to you, what would you do?

Many of us are not so tech-savvy would try and do what we can ourselves. We’d turn it off and then back on and hope it was just in our imagination. While this seems to help many other times, if you’ve had a bad enough crash, this may do little to help. At this point, next steps might be calling your IT department, contacting a computer repair person, or possibly chucking your laptop into the trash out of pure frustration. Whatever your go-to, you may have already lost important data and files that simply cannot be retrieved.

While we all hope we don’t find ourselves in the above situation, there are things we can do to ensure a crash isn’t a detrimental as it could be. One way to ensure your data is safe is to back it up with an external hard drive or other device separate from your computer. This ensures your data is stored separately from those flawed operating systems that could potentially wipe your information. The downside to this is remembering to constantly sync your data to the drive and not accidentally deleting a file from the drive as it is permanently deleted.

Another option for securing your data is storing your files in the cloud, so that if your computer ever does crash you won’t lose any important files. SafeSourcing offers this application called SafeDocument™.  Here, your files are stored safely, securely, and far from reach of computer crashes. In addition, this tool saves a number of versions, so that if you save a document to the wrong name, you can easily access the information you need and nothing is lost. In addition, SafeDocument™ is available to you from anywhere you have internet access. That means if your laptop dies, you can still access all your documents from another computer. This allows you to keep working on what you need to without interruption and without the fear that your data could be lost in a crash.

For more information on how SafeSourcing can help in your document storage, or on our Risk Free trial program, please contact a SafeSourcing Customer Service representative. We have an entire team ready to assist you today.http://safesourcing.com/ContactUs/tabid/60/language/en-US/Default.aspx

 

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