Boosting Buyer Buy-In

Posted on February 21, 2012 by Kelly

Are your e-sourcing efforts stalled? Here are three strategies to bolster participation and help you reach the next level:

Mandates: Set clear expectations up front and make e-sourcing part of the procurement process. Examples include:

Any purchase over a certain dollar amount ($50,000, for example) must be reviewed by the auction team
Each buyer must complete a minimum number of events per year as a performance metric
Build auctions into the financial goals of the department

Group Recognition: This is a great way to shine a positive light on spend owners who are hosting e-sourcing projects.

Reward them for their efforts and encourage them to share their experiences with their peers. Spice things up a bit and make it a fun event – a pizza party, wine tasting, or ice cream social. Keep the focus on the success stories and give participants their moment in the sun.
Celebrate companywide savings thresholds and recognize each e-sourcing event host with a token of appreciation (i.e. a small award, gift card, or gift basket)
Watch a live auction with the entire department – make it a party. Celebrate the success of that event while encouraging others to run thier own.

Individual Recognition: People loved to be recognized for their hard work. A few ideas:

Send out a recap after each e-sourcing event to executive leadership summarizing the results and congratulating the merchant on their success. This serves two purposes; 1) rewarding the host and 2) keeping leadership informed of the program. Encourage leaders to send notes of congratulations!
Recognize category managers who reach a savings threshold, run multiple events, or based on total volume e-auctioned. Acknowledge these individuals with a beautiful trophy at a cocktail party thrown in their honor or even something as simple as a written thank you.

It’s important to remember that consistency is key. Whether you choose mandates, group, or individual recognition be prepared to set and meet expectations. To discuss these or other ideas to help encourage participation and ramp up e-sourcing activity within your organization contact an Intesource account manager.

What approaches have you found to be helpful in keeping employees interested and engaged in your e-sourcing program?

Go Forward (with Forward Auctions):

Quote

Posted on February 14, 2012 by Tracie

“It’s an awesome way for buyers to compete for our goods and for our company to feel like we got top dollar—plus it’s fairly simple.”

Coe Hawkins, Director Procurement & Sourcing—Save Mart

The use of forward auctions on an e-sourcing platform has many advantages, but is often underutilized. Users of e-sourcing tools and services typically use reverse auctions, which often result in high dollar savings and/or cost avoidance benefits. What many users have yet to discover is you can also have the excitement of seeing profits by employing forward auctions.

The profit earned through a forward auction goes immediately to your bottom line—who wouldn’t want to see immediate earnings?

The forward auction platform allows hosts [or users] to get the best price for any unwanted [or recyclable] capital equipment, materials, inventory etc. Below is a list of categories to consider when looking into a forward auction:

Old Corrugated Cardboard (OCC)
Pharmacy Scripts/Inventory
Used I.T. Equipment
Used Tractors and Trailers
Plastic Recycling
Store Equipment

Your savings opportunities are endless with e-sourcing. If there is something you need to sell which other companies can find useful; a forward auction is a great way to get the best price, reach new markets, and create value all within the shortest amount of time.

Innovation ’12, our annual Best Practices in e-Sourcing conference is right around the corner and provides an excellent opportunity for attendees to network and exchange ideas. Coe Hawkins, Director of Procurement & Sourcing at Save Mart will be presenting on the advantages and benefits their organization has achieved from involvement in the forward auction process. To learn more join us at our upcoming conference in Las Vegas. Please visit Innovation ’12 for additional information.

We would like to hear your thoughts and opinions on forward Auctions. What have been your past experiences? What has worked and what hasn’t?

To discuss the option of setting up a forward auction please contact your account manager or send an email to info@intesource.com

And Survey Says …

Posted on February 7, 2012 by Lindsay

Surveying. It’s a simple concept that can assist you in running your business more efficiently. Now Intesource has a tool that can help.

Intesource partner, Spartan Stores regularly surveyed all of their stores on the condition of their floors. To do this, they drove to each location or contacted each store individually. Realizing there was a more efficient way to gather this information, they worked with Intesource to develop a survey tool. Using the standard Request for Information (RFI) method as a jumping off point, Intesource partners can now ask questions with the addition of scoring the answers. The scoring scale is always created for each particular case. For example, the question could be “on a scale from 1 to 10 (10 being the best) how shiny are the floors?” the creator specifies what an acceptable response is and also what they deem as a passing score. They could choose 5 – 10 or 8-10 as acceptable, whatever makes sense for their purposes. Once the individual completes and submits their survey the system will assign a score based off the criteria loaded and reveal whether or not that particular response passed or failed.

Intesource Survey Score Results

Reports are available to show each responder’s score or just the surveys that passed or failed. If your survey requires more text type responses the survey can also accommodate that. Once the questions are completed you can determine whether that response has met or hasn’t met your criteria. The system will then present a score based off of how many responses were “met.”

By using the survey tool for this project Spartan Stores has seen benefits in addition to just saving time. While saving time is the biggest objective for this particular project they have also set a clearly defined standard on the condition of the floors. Store Managers better understand what the floors should look like as well as what vendor service level is expected from corporate. It also assisted in opening the line of communication between stores and their floor care vendors. The fact that they now only need to travel to stores that gave their floors a low overall score is an added bonus!

Whether you are looking to survey internally or a group of vendors outside of your company, the survey tool is a great way to gather and analyze data.

A Sneak Peak at Innovation ’12

Posted on February 2, 2012 by Michelle

Intesource’s annual Innovation e-Sourcing Conference, to be held in Las Vegas, NV March 4-6, focuses on many topics dealing with the challenges involved in sourcing. The conference has a packed agenda, covering topics such as adoption, savings metrics, and running complex and creative events. A few topics you’ll experience at Innovation ’12 include:

Strategic Sourcing: Creating Value in the Retail Supply Chain Presenter: Michael R. Griswold, Research Vice President, Gartner, Inc.

Today’s volatile retail environment requires a retailer’s undivided attention on improving productivity, reducing operating costs, and improving on-shelf availability. To deliver sustainable business value, organizations must ensure alignment across their business, supply chain and sourcing strategies. The session will focus on:

Identifying the role of the supply chain in supporting the business and sourcing strategies
How to determine your strategic sourcing maturity
What’s the role of technology in the strategic sourcing process
Building a business case for investing in your current sourcing processes
How do leading organizations view the people, process, and technology aspects of strategic sourcing

Pricing Risks: Be Prepared for the Next Round of Commodity Price Swings Presenter: Laura Hodges, Director, Pricing and Purchasing Services, HIS Global Insight

Commodity prices are not only higher but also more volatile – a deadly combination for purchasing managers. This presentation will provide a solid understanding of the pricing risks facing today’s commodity markets and how to be better prepared for this volatility. The primary drivers of price escalation will be identified and will highlight which signposts should be tracked to better anticipate commodity price movements.

View complete agenda at http://intesource.com/conferences.aspx.

Back To Basics: The 3 building blocks of e-sourcing success

Posted on January 31, 2012 by Kelly

As e-sourcing initiatives grow and evolve we sometimes lose sight of the most basic building blocks of a great program. Proven time and time again, the following steps will lead to a solid base on which to grow in the coming year.

Planning is key
In any endeavor the best way to reach your goals is to put a plan in place – the same is true for e-sourcing. Once you’ve defined your success criteria, whether it be savings, an increase in volume, or any number of other measures, the next step is to identify the sourcing events that will allow you to reach that goal. Identifying potential e-sourcing projects is easy when you’ve met with category managers. Review results from last year and consider adding new categories to the mix. Evaluate buys you haven’t run before in departments that haven’t run events yet. To sustain momentum meet with buyers monthly to measure progress and make revisions to the plan as necessary.

Executive Support
Arguably the most important element in any strategic sourcing initiative is executive support. The easiest way to improve the bottom line is to cut costs. E-sourcing allows organizations to cut costs without having a negative effect on quality, which is key in today’s ultra-competitive environment. Meet with your executive team at least once a month to brief them on successes and challenges. Send updates via email to communicate milestones and recognize employees who are running events and participating in the process. The brighter spotlight you shine on your successes, the easier it will be to get new players/departments on board and expand the scope of your program.

Celebrate Successes!
Make sure everyone in your organization knows about the company’s e-sourcing wins! Reverse auctions can lead to huge cost reductions, but also point out time savings, process efficiencies, discovering new suppliers, product innovations, and improvements to existing services. Make potential hosts aware of the bevy of potential benefits available to them through e-sourcing. Create excitement and awareness by posting cumulative savings, emailing specific event results, invite an entire department and executives to view a live, online bid projected in a board room or auditorium, reward hosts with recognition, prizes or awards!

Common among all of these strategies to success is gaining visibility and earning trust. By building relationships across the organization you can position yourself as the e-sourcing expert, expand the program, and guarantee e-sourcing success.

Your NEW New Year’s Resolution

Posted on January 27, 2012 by Kelly

It’s nearly February and how many of us have already lost sight of our New Year’s resolutions? I know I’m guilty. Why not forget about the diets and exercise and make new a resolution that will have an impact on your company’s bottom line! This year set an e-sourcing goal, whether it’s a savings target, bringing new buyers on board, or simply a set number of e-sourcing projects by department. Here are a few ideas to get you thinking BIG for 2012!

Tackle services:
    Linen Services
    Hotel Stays
    Fire Inspection and Maintenance
    Brokerage Service
Break into new departments:
    Marketing – Circular Production
    Construction – New Builds
    Technology – Printers
    Human Resources – Background Checks
Go green!…for less
    Retrofit Lighting
    Reusable Bags
    Old Corrugated Cardboard*

What new e-sourcing strategies will you employ to get the best results yet in 2012?

*Forward auction

Innovation ’12: Why it’s Worth the Trip

Posted on January 24, 2012 by Michelle

Innovation ’12 is Intesource’s annual user conference and information exchange for sourcing and procurement professionals. The conference will take place on March 4-6, 2012 at the Bellagio in Las Vegas. Innovation ’12 is designed for Intesource customers and prospects looking to expand and evolve their current programs. Click here for more information about Innovation ’12.

Procurement’s primary function during the economic downturn was to cut costs and deliver more savings. But times are changing yet again; there’s a need to expand procurement’s function to align across the entire business. How do you create a cultural change to instill a long-term strategic sourcing approach while simultaneously convincing the entire organization to join in?

Cut the savings habit by Nick Martindale says to provide a clear link between delivered savings and the bottom line. Gain executive support. Link with other business strategies, not just cost – such as risk management, contract management, and response to market changes. Think it’s easier said than done? Start thinking outside the box:

Be innovative. Differentiate your sourcing approach (i.e. complex categories) or collaborate with suppliers (i.e. product specifications or new product/business differentiators).
Bird’s eye view. Use your broad industry perspective to your advantage. Look beyond the products suppliers provide to their financial stability to how your relationship improves your company.

Intesource customers and industry experts will cover these topics and more through presentations and one-on-one conversations at Innovation ’12:

Keynote presentations about commodity trends, the CFO’s perspective, and the collaboration between finance and procurement
Breakout sessions on savings metrics, e-sourcing process implementation, forward auctions, enterprise-wide procurement, and more
Networking opportunities to discuss everything from complex categories and product specifications to cultural changes and executive buy-in

More information about Innovation ’12 is available here: http://intesource.com/conferences.aspx.

Do you see yourself as an Innovator?

Posted on January 17, 2012 by Ashley

Do you see yourself as an Innovator in your organization?
What impact could you bring your company through Innovation?
Do you encourage others to think outside the box?

As a sourcing and procurement professional it’s important to consider yourself as an Innovator. Really, what other department in your organization has the potential to positively impact the bottom line by cutting costs by 20% or more in one day?

In today’s business environment, if you aren’t thinking ahead of the curve, then you aren’t staying competitive. A recent blog post on the Harvard Business Review Innovation Is Everyone’s Job made me think about our partners and how they’ve used e-sourcing to be innovative within their organizations. A few examples include:

Digging outside the box.Our partners find the most success in e-auctions when they look beyond the typical commodity items. This helps build an initiative that continues to provide value, year over year and spanning over 100’s of categories. Examples include:
- Print advertising for retail trailers
- Credit card processing
- Interactive voice web services
- Disaster recovery services
Keeping it local! Due to the shift in consumer purchasing to support local farms and businesses, our partners are using the vendor management tool to source suppliers by geographical region and help improve their local economy.
Implementing employee recognition programs. One customer handed out awards to event hosts when the company reached the $10 million savings mark. Another partner sends an email to their executive team after every reverse auction to summarize the results and acknowledge the event host. Any recognition you can give your employee’s on behalf of their hard work makes a difference!

What’s your experience with creating a culture of innovation?