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Hub You - A Creative Approach to Strategic Sourcing and Supplier Engagement
A new study reveals that outsourcing payroll functions reduces payroll tax penalties. The study, conducted by Empagio Human Resources Outsourcing, was conducted online during the month of September 2006. 209 financial and human resource executives participated in the study. The titles of these people ranged from CEO, CFO, president, vice-president, director, and manager. The results of the study did not reveal the sizes of the companies represented.Reduced Dollars Spent on Penalties72% of those participating in the study said that outsourcing their payroll reduced the actual dollar amount of tax penalties being paid to various government agencies. Only 1% said their payroll tax penalties increased by outsourcing. The remainder, 27%, said there was no change in the dollar amount of tax penalties by outsourcing.Reduced Frequency of Tax Penalties69% of those participating in the study said that the frequency of paying tax penalties was reduced by outsourcing their payroll. 2% said the frequency of paying tax penalties increased by outsourcing, and the remainder, 29%, said there was no change in the frequency of paying tax penalties by outsourcing.Why Should Businesses Reduce Payroll Tax Penalties?There are three important reasons businesses should strive to reduce payroll tax penalties:Payroll tax penalties are quite stiff; paying them damages cash flow Payroll tax penalties are not deductible on tax returns Late payments and filings are frustrating to those who are responsible for them; decreased productivity resultsUnlike other business expenses, there is no financial benefit to paying payroll tax penalties. They are truly a drain on business resources, both the human side and the financial side.Why Does Outsourcing Reduce Payroll Tax Penalties?Payroll providers are trained in the complex task of payroll. Because of all the different federal and state taxes and regulations, wage bases, reporting requirements, and payment requirements, payroll is a tedious maze of timetables and decisions. Proper training and experience are important to getting the task completed correctly.If your business runs payroll in-house and has been paying payroll tax penalties, consider outsourcing this important function. Many of the smaller payroll providers offer inexpensive payroll solutions with a wide range of up-to-date features, such as direct deposit and electronic filing
Assess any new developments in the market. Are there emergent technologies that will give your company a competitive advantage? Is the marketplace moving toward an innovative solution that may provide a cost advantage in the near future? Buying at the end of a product life cycle could cause the organization to overpay for outdated technology. Research and attention to these factors will help avoid a potentially costly mistake.
Collect Supplier Information
After the initial market assessment, look to qualify as many suppliers as possible. Limiting the potential supplier base can only limit the opportunity for a successful initiative. The larger the potential supplier base, the greater the chance to identify innovative opportunity and increased value.
Begin collecting information on the potential supplier base. The main focus should be to cast a wide net into the market. Identify the supplier base of competitors. Consider foreign suppliers even if there is no intent to import. Foreign suppliers may be willing to establish d
Do you have the qualities to promote products or services through personal referrals? What you need for this is empathy, a reasonably good knowledge of the world wide web. You should know how to surf the net meaningfully and effectively to extract financial benefit from it and the sense to identify the winning products or services for which there is a demand in the virtual world. Remember the world is virtual but there are real people behind it and real money to make here if you are ready to invest money and time for this. You don't need tons of money for this ( you would have to invest around say USD $ 10 to 30 per month ) although the time factor is a demanding one.I am personally won over by a particular business proposition from one of the top 10 internet companies where you have to spend around USD $ 300 per year. It is not possible to get success here without 3/4 hours solid work every day and with the pressures of your day job, that could really adversely affect your personal and professional life. But then the rewards are really immense! You slowly over a period of time create a money making website, blog or a colourful newsletter or ezine and as the money begins flowing in and you get savvier and savvier about the internet business you have created, the FULFILLING SENSE of having done something worthwhile ushers you into a new kind of existence. It's like your first honeymoon days, you feel so complete, nothing else really matters any longer.The company that you work with should not limit your success in any way. The success you generate for yourself and for them should not be diluted in any manner by your principal. I am talking about an unlimited uni-level compensation plan. This actually translates into having unlimited number of people frontline. There can be 100 people or 1 million. It doesn't matter.Each of your downline will do likewise and their downline also do the same thing. Nobody is limited. This works 5 levels deep for anyone in your organisation. The only limit to the amount of money you should earn with any good networking marketing company should be something like the above. The organisation you are working for should not place any intentional limits on your success or income. The next thing to consider is if the product is affordable? Remember good marketers are in great demand on the web and that you are already doing a favor by marketing a product for them. So the cost of the product should not make you go broke just to start a network marketing busi
Purchasing managers and strategic sourcing professionals often follow a consistent methodology when planning and conducting a sourcing initiative. Having a process provides a framework that, when correctly applied, can produce sustainable savings in a consistent manner. Creativity in the application of the strategic sourcing process will have a dramatic effect on the results achieved, regardless of whether a seven step sourcing process or a customized internal sourcing process is used.
In order to best optimize the results of a strategic sourcing initiative, there are several questions
that should be answered at the project’s initiation:
• How can we improve our understanding of the sourcing process?
• What are the X-factors that arise when executing a sourcing project?
• What other considerations should the sourcing professional account for while administering
the strategy?
Two frequently overlooked components of any strategic sourcing methodology involve the collection of innovative market information and the supplier approach strategy. Often during the course of a strategic sourcing initiative, new product developments, alternate technologies, and shifts in spend patterns present themselves. A Creative Sourcing™ process is dynamic, so the sourcing professional may need to implement a revised or new strategy to adapt to changing conditions and events.
The sourcing professional should consider how and when to approach both incumbent and alternate suppliers during the actual sourcing phase. Imaginative strategies and open communication will help motivate suppliers to present the best proposal and optimize the total project results.
Project Team and the Internal Benchmark
The benchmark will set the foundation upon which the sourcing initiative will be built and measured. Before the benchmark can be established, the project team must be assembled. The project executive or sponsor should identify the best resources both internally and externally to work on the initiative. The project sponsor must ask the following questions to begin to develop the team:
• Who within the core sourcing group is best equipped to work on this initiative?
• Who can be enlisted from other departments within the company to participate in the
cross-functional team?
• Should additional resources be recruited from outside the company? (either consultants or
business partners)
• What is the cost of applying these resources?
Determining the best, most cost effective resources will help to ensure that the ensuing process is a focused, collaborative effort that yields tangible results. Once the project team has been selected, the key decision makers must be identified and introduced to the project team. Establishing the roles and responsibilities for each team member at the start of the initiative creates a defined structure to help the process move quickly and effectively.
Filter out subjective thinking prior to beginning the initiative. The sourcing professional should recognize that internal biases may, and usually do, exist. These biases could include anything from previous negative experience with the process itself, former suppliers, or may simply be the opinions of individuals that are subjective and unrelated to the initiative at hand. In some cases, the sourcing professional themselves may hold the biases. In these situations, the professional must make other members of the team aware of their bias, so that other team members can help make the process objective rather than subjective.
Prior established relationships with incumbent suppliers should be approached in an objective manner. Revisit past decisions from previous sourcing initiatives and determine what new opportunities may exist this time around. If possible, approach the sourcing project as if it were for a new product in the developmental stage. Start the initiative with a clean, objective slate.
Lastly, the project team’s motivation should be evaluated at this stage of the project.
• Are there incentives or bonuses available relative to the success of the initiative?
• Are high level executives and management supportive of the initiative?
• Does the team have the sponsorship and ability to drive change throughout the
organization?
Positive reinforcement and the idea that the initiative is a highly visible, true team effort is an invaluable component of a successful outcome. Failure to have all of these components in place at the benchmark stage will ensure a mediocre result.
The internal benchmark for recurring purchases should objectively define what has been done in the past (qualitatively and quantitatively) and identify the implications to the spend category of future strategic plans. At a minimum the benchmark should identify what is being sourced, from whom, pricing structure, service level requirements and future considerations.
For new spends, the benchmark should identify the purpose of the expenditure and have some preliminary proposals or cost estimates as a basis for the spend category.
At the conclusion of each sourcing event, the recommended course of action should be compared to the benchmark and all of the quantitative, qualitative and cost avoidance results should be measured and reported.
Market Assessment
Traditionally, the next step in the strategic sourcing initiative is to conduct a Market Assessment. Here the sourcing team must look at a number of factors in determining the status of the marketplace.
First, ask the question “Is now the right time to source?” The team must look at market
conditions to determine the feasibility of a sourcing initiative.
• Recent market events such as natural disasters that cause supply disruptions may hinder
the efforts of both domestic and global sourcing. Commodity areas can be highly affected by these events. Suppliers may be implementing Force Majeure clauses contained in contracts.
• Currency fluctuations can effect whether offshore sourcing is an attractive option at this
time.
• What are the competitors doing? Have competitors recently hit the market in search of
price relief or to try to lock up supply?
• Have new technologies, regulations, policies recently changed the marketplace?
If now is not the optimum time to source, when will the initiative be more successful? When timing is poor, your best strategy may be to go for a contract extension at existing prices. A full sourcing event can be conducted at a later date when market forces are more favorable.
Review market price trending in the product area you are planning to source. Have prices increased or decreased over the past 12 months? Is supply tight or is product abundant? In many product areas, there are several moving parts that need to be tracked. Indexed-based commodities and products are moving targets that require ongoing attention to monitor market movements. Investigate not only the history of the market, but research what the experts of analysts of that market are predicting. A minimal financial investment in this data now can potentially reward the project with significantly higher savings in the future.
Assess any new developments in the market. Are there emergent technologies that will give your company a competitive advantage? Is the marketplace moving toward an innovative solution that may provide a cost advantage in the near future? Buying at the end of a product life cycle could cause the organization to overpay for outdated technology. Research and attention to these factors will help avoid a potentially costly mistake.
Collect Supplier Information
After the initial market assessment, look to qualify as many suppliers as possible. Limiting the potential supplier base can only limit the opportunity for a successful initiative. The larger the potential supplier base, the greater the chance to identify innovative opportunity and increased value.
Begin collecting information on the potential supplier base. The main focus should be to cast a wide net into the market. Identify the supplier base of competitors. Consider foreign suppliers even if there is no intent to import. Foreign suppliers may be willing to establish d
Creativity can be defined as problem identification and idea generation whilst innovation can be defined as idea selection, development and commercialisation.There are distinct processes that enhance problem identification and idea generation and, similarly, distinct processes that enhance idea selection, development and commercialisation. Whilst there is no sure fire route to commercial success, these processes improve the probability that good ideas will be generated and selected and that investment in developing and commercialising those ideas will not be wasted.One common method in the problem identification and idea generation phase is the use of brainstorming. In fact, it is not unfair to say that whenever managers have a problem to solve, they are likely to herd people into a room with a flip chart and conduct (usually an ineffective) brainstorming session.There are a number of reasons why people hate brainstorming sessions. Further, there are a number of reasons why proper brainstorming management yields superior results.a) Brainstorming dilutes ideas. Many individuals who think that they may be onto the something find that their ideas become diluted as a result of compromise.b) The sum of ideas produced by individuals acting alone is greater than the sum of ideas produced by those individuals acting in groups. Thus proper brainstorming management includes asking participants to address the problem and generate ideas before the actual brainstorming session.c) Large groups produce negatives such as groupthink, evaluation apprehension and status deference which causes people to shut down.d) Idea generation is a cognitive process and relies on the team leader having the skills to elicit that cognitive activity from individuals. Often team leaders are assigned that role for other reasons.e) Large groups are often dominated by higher status and more forceful personalities, thus lessening the impact of other participants. Often team leaders do not have the skills to manage all people.These topics are covered in depth in the MBA dissertation on Managing Creativity & Innovation, which can be purchased (along with a Creativity and Innovation DIY Audit, Good Idea Generator Software and Power Point Presentation) from http://www.managing-creativity.com.You can also receive a regular, free newsletter by entering your email address at this site.Kal Bishop, MBA**********************************You are free to
Project Team and the Internal Benchmark
The benchmark will set the foundation upon which the sourcing initiative will be built and measured. Before the benchmark can be established, the project team must be assembled. The project executive or sponsor should identify the best resources both internally and externally to work on the initiative. The project sponsor must ask the following questions to begin to develop the team:
• Who within the core sourcing group is best equipped to work on this initiative?
• Who can be enlisted from other departments within the company to participate in the
cross-functional team?
• Should additional resources be recruited from outside the company? (either consultants or
business partners)
• What is the cost of applying these resources?
Determining the best, most cost effective resources will help to ensure that the ensuing process is a focused, collaborative effort that yields tangible results. Once the project team has been selected, the key decision makers must be identified and introduced to the project team. Establishing the roles and responsibilities for each team member at the start of the initiative creates a defined structure to help the process move quickly and effectively.
Filter out subjective thinking prior to beginning the initiative. The sourcing professional should recognize that internal biases may, and usually do, exist. These biases could include anything from previous negative experience with the process itself, former suppliers, or may simply be the opinions of individuals that are subjective and unrelated to the initiative at hand. In some cases, the sourcing professional themselves may hold the biases. In these situations, the professional must make other members of the team aware of their bias, so that other team members can help make the process objective rather than subjective.
Prior established relationships with incumbent suppliers should be approached in an objective manner. Revisit past decisions from previous sourcing initiatives and determine what new opportunities may exist this time around. If possible, approach the sourcing project as if it were for a new product in the developmental stage. Start the initiative with a clean, objective slate.
Lastly, the project team’s motivation should be evaluated at this stage of the project.
• Are there incentives or bonuses available relative to the success of the initiative?
• Are high level executives and management supportive of the initiative?
• Does the team have the sponsorship and ability to drive change throughout the
organization?
Positive reinforcement and the idea that the initiative is a highly visible, true team effort is an invaluable component of a successful outcome. Failure to have all of these components in place at the benchmark stage will ensure a mediocre result.
The internal benchmark for recurring purchases should objectively define what has been done in the past (qualitatively and quantitatively) and identify the implications to the spend category of future strategic plans. At a minimum the benchmark should identify what is being sourced, from whom, pricing structure, service level requirements and future considerations.
For new spends, the benchmark should identify the purpose of the expenditure and have some preliminary proposals or cost estimates as a basis for the spend category.
At the conclusion of each sourcing event, the recommended course of action should be compared to the benchmark and all of the quantitative, qualitative and cost avoidance results should be measured and reported.
Market Assessment
Traditionally, the next step in the strategic sourcing initiative is to conduct a Market Assessment. Here the sourcing team must look at a number of factors in determining the status of the marketplace.
First, ask the question “Is now the right time to source?” The team must look at market
conditions to determine the feasibility of a sourcing initiative.
• Recent market events such as natural disasters that cause supply disruptions may hinder
the efforts of both domestic and global sourcing. Commodity areas can be highly affected by these events. Suppliers may be implementing Force Majeure clauses contained in contracts.
• Currency fluctuations can effect whether offshore sourcing is an attractive option at this
time.
• What are the competitors doing? Have competitors recently hit the market in search of
price relief or to try to lock up supply?
• Have new technologies, regulations, policies recently changed the marketplace?
If now is not the optimum time to source, when will the initiative be more successful? When timing is poor, your best strategy may be to go for a contract extension at existing prices. A full sourcing event can be conducted at a later date when market forces are more favorable.
Review market price trending in the product area you are planning to source. Have prices increased or decreased over the past 12 months? Is supply tight or is product abundant? In many product areas, there are several moving parts that need to be tracked. Indexed-based commodities and products are moving targets that require ongoing attention to monitor market movements. Investigate not only the history of the market, but research what the experts of analysts of that market are predicting. A minimal financial investment in this data now can potentially reward the project with significantly higher savings in the future.
Assess any new developments in the market. Are there emergent technologies that will give your company a competitive advantage? Is the marketplace moving toward an innovative solution that may provide a cost advantage in the near future? Buying at the end of a product life cycle could cause the organization to overpay for outdated technology. Research and attention to these factors will help avoid a potentially costly mistake.
Collect Supplier Information
After the initial market assessment, look to qualify as many suppliers as possible. Limiting the potential supplier base can only limit the opportunity for a successful initiative. The larger the potential supplier base, the greater the chance to identify innovative opportunity and increased value.
Begin collecting information on the potential supplier base. The main focus should be to cast a wide net into the market. Identify the supplier base of competitors. Consider foreign suppliers even if there is no intent to import. Foreign suppliers may be willing to establish d
I was confronted (yet again) last week with a pointed reminder of one of philanthropy's biggest Achilles' heels – the often overlooked or misunderstood importance of integrating innovative communications strategies into every program.It happened during a very interesting presentation at the Philanthropy's Sweet Spot Forum, co-sponsored by Rockefeller Philanthropy Advisors and the Stanford Social Innovation review. The speaker was Peter Goldmark, now Director of the Climate and Air program at Environmental Defense(ED) (one of the best organizational communicators I know), formerly presiding over the International Herald Tribune and the Rockefeller Foundation. Obviously, Goldmark is one smart guy who knows how to engage his audience.He told the story of his program's proposal to FedEx to help transition their fleet to hybrid trucks. ED's condition? That every FedEx employee receive the opportunity to learn about this change, and its benefits for the climate.The partnership took off and the transition is in progress. The new hybrid trucks will signal this change in their blue and green color scheme, and for the ubiquitous FedEx truck, that color change is a high-impact communications signal.This is a win-win partnership. ED's Climate and Air program derives these benefits:• Acclaim for driving a high-visibility conversion to hybrid. • Lasting impact – fuel savings build every day. • A powerful new corporate ally.And FedEx also benefits, gaining:• High visibility as a socially-conscious corporation • Energized, engaged and more aware work force • Cost savings in its bottom lineAll in all, a great example of innovative social/private sector partnerships. But something interesting happened during the Q&A period. When a forum participant asked for Goldmark's advice on how to get the word out on the questioner's paralympic program, commenting that program is nothing without awareness and action, Goldmark bemoaned the fact that it's almost impossible to communicate effectively in this age of information and advertising overload. He advised that "you can't push messages anymore" (not quite true, as I see it) and suggested that participants "look to youth, that's where viral marketing happens."To hear this optimistic and visionary leader, and excellent communicator, express a defeatist view of the role of communications caused me no small amount of agita. During his excellent presentation
Prior established relationships with incumbent suppliers should be approached in an objective manner. Revisit past decisions from previous sourcing initiatives and determine what new opportunities may exist this time around. If possible, approach the sourcing project as if it were for a new product in the developmental stage. Start the initiative with a clean, objective slate.
Lastly, the project team’s motivation should be evaluated at this stage of the project.
• Are there incentives or bonuses available relative to the success of the initiative?
• Are high level executives and management supportive of the initiative?
• Does the team have the sponsorship and ability to drive change throughout the
organization?
Positive reinforcement and the idea that the initiative is a highly visible, true team effort is an invaluable component of a successful outcome. Failure to have all of these components in place at the benchmark stage will ensure a mediocre result.
The internal benchmark for recurring purchases should objectively define what has been done in the past (qualitatively and quantitatively) and identify the implications to the spend category of future strategic plans. At a minimum the benchmark should identify what is being sourced, from whom, pricing structure, service level requirements and future considerations.
For new spends, the benchmark should identify the purpose of the expenditure and have some preliminary proposals or cost estimates as a basis for the spend category.
At the conclusion of each sourcing event, the recommended course of action should be compared to the benchmark and all of the quantitative, qualitative and cost avoidance results should be measured and reported.
Market Assessment
Traditionally, the next step in the strategic sourcing initiative is to conduct a Market Assessment. Here the sourcing team must look at a number of factors in determining the status of the marketplace.
First, ask the question “Is now the right time to source?” The team must look at market
conditions to determine the feasibility of a sourcing initiative.
• Recent market events such as natural disasters that cause supply disruptions may hinder
the efforts of both domestic and global sourcing. Commodity areas can be highly affected by these events. Suppliers may be implementing Force Majeure clauses contained in contracts.
• Currency fluctuations can effect whether offshore sourcing is an attractive option at this
time.
• What are the competitors doing? Have competitors recently hit the market in search of
price relief or to try to lock up supply?
• Have new technologies, regulations, policies recently changed the marketplace?
If now is not the optimum time to source, when will the initiative be more successful? When timing is poor, your best strategy may be to go for a contract extension at existing prices. A full sourcing event can be conducted at a later date when market forces are more favorable.
Review market price trending in the product area you are planning to source. Have prices increased or decreased over the past 12 months? Is supply tight or is product abundant? In many product areas, there are several moving parts that need to be tracked. Indexed-based commodities and products are moving targets that require ongoing attention to monitor market movements. Investigate not only the history of the market, but research what the experts of analysts of that market are predicting. A minimal financial investment in this data now can potentially reward the project with significantly higher savings in the future.
Assess any new developments in the market. Are there emergent technologies that will give your company a competitive advantage? Is the marketplace moving toward an innovative solution that may provide a cost advantage in the near future? Buying at the end of a product life cycle could cause the organization to overpay for outdated technology. Research and attention to these factors will help avoid a potentially costly mistake.
Collect Supplier Information
After the initial market assessment, look to qualify as many suppliers as possible. Limiting the potential supplier base can only limit the opportunity for a successful initiative. The larger the potential supplier base, the greater the chance to identify innovative opportunity and increased value.
Begin collecting information on the potential supplier base. The main focus should be to cast a wide net into the market. Identify the supplier base of competitors. Consider foreign suppliers even if there is no intent to import. Foreign suppliers may be willing to establish d
Dublin, Ireland, April 23, 2007 – Facing the increasing competition between job sites, the recently started Internet search portal better-job-offers.com criticises sites that do not show any interest in sharing their results. Due to their advertising deals, most sites try to lure job seekers on their virtual premises, which can increase disorientation between users.As announced by better-job-offers.com marketing manager Robert Koch, the site’s search engine experts do not approve that some providers are not willing to share their results. “Being such an important topic to society in general, we cannot understand why some sites refuse collaboration. Of course, the economic side of our portal matters to us. But making business within this sector means to accept one’s social responsibility,” he added.The increasing number of new job sites had led job seekers to experience disorientation, as shown by the first user feedbacks. The portal’s users now appreciate that they can utilize better-job-offers.com as a starting point for finding a job because they also can access results from different job sites and follow the links to additional providers. Trying to constantly enhance their service quality, the search engine experts continuously look out for new partners, not always successfully.Koch stated, “We have to serve our customers first. They are the engine of our enterprise. If they want information in first place, we cannot give them advertising instead. And in our particular market, providers should collaborate even more than usually, letting aside the number of visitors for a while.” Correspondingly, better-job-offer.com supplies its clients with links to external pages from other job sites.The site pursues the objective of providing an overall overview over current offers from job markets worldwide. Consequently, it presents more than 2240 options to specify the desired field of profession and location. Facing its social responsibility, better-jobs-offers.com continuously tries to gain new partners to grant users access to additional employment offers.Launched this year, the Internet search portal www.better-job-offers.com belongs to the European network of vertical sites www.betterdeals.com. This network aims at providing Internet users with an everyday guide to electronically presented information, products, and services. Constantly evolving since the end of 2003, betterdeals.com is created and managed by Go Advertising Limited, Dublin.
At the conclusion of each sourcing event, the recommended course of action should be compared to the benchmark and all of the quantitative, qualitative and cost avoidance results should be measured and reported.
Market Assessment
Traditionally, the next step in the strategic sourcing initiative is to conduct a Market Assessment. Here the sourcing team must look at a number of factors in determining the status of the marketplace.
First, ask the question “Is now the right time to source?” The team must look at market
conditions to determine the feasibility of a sourcing initiative.
• Recent market events such as natural disasters that cause supply disruptions may hinder
the efforts of both domestic and global sourcing. Commodity areas can be highly affected by these events. Suppliers may be implementing Force Majeure clauses contained in contracts.
• Currency fluctuations can effect whether offshore sourcing is an attractive option at this
time.
• What are the competitors doing? Have competitors recently hit the market in search of
price relief or to try to lock up supply?
• Have new technologies, regulations, policies recently changed the marketplace?
If now is not the optimum time to source, when will the initiative be more successful? When timing is poor, your best strategy may be to go for a contract extension at existing prices. A full sourcing event can be conducted at a later date when market forces are more favorable.
Review market price trending in the product area you are planning to source. Have prices increased or decreased over the past 12 months? Is supply tight or is product abundant? In many product areas, there are several moving parts that need to be tracked. Indexed-based commodities and products are moving targets that require ongoing attention to monitor market movements. Investigate not only the history of the market, but research what the experts of analysts of that market are predicting. A minimal financial investment in this data now can potentially reward the project with significantly higher savings in the future.
Assess any new developments in the market. Are there emergent technologies that will give your company a competitive advantage? Is the marketplace moving toward an innovative solution that may provide a cost advantage in the near future? Buying at the end of a product life cycle could cause the organization to overpay for outdated technology. Research and attention to these factors will help avoid a potentially costly mistake.
Collect Supplier Information
After the initial market assessment, look to qualify as many suppliers as possible. Limiting the potential supplier base can only limit the opportunity for a successful initiative. The larger the potential supplier base, the greater the chance to identify innovative opportunity and increased value.
Begin collecting information on the potential supplier base. The main focus should be to cast a wide net into the market. Identify the supplier base of competitors. Consider foreign suppliers even if there is no intent to import. Foreign suppliers may be willing to establish d
Shipping containers are basically used for temporary storage of goods while it is being transported from one place to another. These containers are made out of different materials and are designed differently to fit different usages. These come in different sizes and weights as well.Dimensions: The different lengths of shipping containers are – 10 feet, 20 feet, 30 feet, and 40 feet. The width is 8 feet. Heights are either 8.5 feet or 9.5 feet.It is important that one understands the terms when talking about shipping containers. There are three words you must understand. First, there is the shipping container’s rating. Rating is the maximum weight permissible for the shipping containers plus its contents. Then we have the tare mass or tare weight. This is the weight of the empty container under normal operating conditions. Then the payload – that refers to the total weight that a shipping container can carry. In the actual scenario though, the payload maybe less as there are some areas that have laws governing the maximum load a vehicle could carry.These shipping containers have stickers that show its rating, tare weight and payload. Also a sticker showing the identification code is also placed outside and inside the container walls. The identification codes of these shipping containers would show the owner of the containers and the container numbers. These data will be used in the bill of lading for better monitoring, control and tracing of the container and its cargo.Shipping containers are generally classified into two groups. First we have the general purpose or dry cargo container, which is the most common container used in the industry. It is built strong and is waterproof. One of its sidewalls usually has a door. The second group would be the special cargo containers. Such would be the tank containers, which are used for transporting chemicals, and the thermal containers that are used for goods such as meat, fruits, etc.Whatever your needs are, the various shipping containers available can address your shipping container needs. Depending on the goods you plan to transport, have the shipping containers that are fit for it. The shipping companies will usually handle this for you, but it is always better to ask what shipping containers they will be using for your case. With some knowledge about these you are better ensured of getting the right shipping service and shipping containers for your goods.
Assess any new developments in the market. Are there emergent technologies that will give your company a competitive advantage? Is the marketplace moving toward an innovative solution that may provide a cost advantage in the near future? Buying at the end of a product life cycle could cause the organization to overpay for outdated technology. Research and attention to these factors will help avoid a potentially costly mistake.
Collect Supplier Information
After the initial market assessment, look to qualify as many suppliers as possible. Limiting the potential supplier base can only limit the opportunity for a successful initiative. The larger the potential supplier base, the greater the chance to identify innovative opportunity and increased value.
Begin collecting information on the potential supplier base. The main focus should be to cast a wide net into the market. Identify the supplier base of competitors. Consider foreign suppliers even if there is no intent to import. Foreign suppliers may be willing to establish domestic importers or distributors if your volumes are high enough or they intend to establish themselves in the marketplace. Their motivation will be to establish a foothold in a new market. This can potentially be used as an advantage in negotiations.
After developing the first pass supplier list, establish contact with each one to gauge their interest and viability in this initiative. Does this supplier have potential to become a part of my existing supply base? Are they able to provide the required service and volume commitments? If suppliers do not meet these qualifications, ask who they would recommend as a potential participant, or how they would suggest fulfilling the requirement. Be creative in finding alternate suppliers. Networking with fringe suppliers in this initiative can foster healthy relationships that may benefit a future project.
At this stage, most traditional sourcing processes utilize an RFI process to develop a short list of suppliers. However, it is too early in the sourcing cycle to disqualify suppliers that want to participate. Disqualifying suppliers at this time may cause you to miss a creative or innovative idea that may lead to the modification of the initial requirement or specification. Potential suppliers must be thought of as part of the sourcing team, and engaging as many as possible will help to develop the most innovative and cost effective strategy for the sourcing initiative.
Suppliers generally will not invest resources in competing for business that they have no chance of winning. If they seem to be an outlier, inquire about their interest and actively attempt to engage them in the process. Suppliers may hold some of the same biases that the internal team held at the initiation of the sourcing project. Attempt to identify and overcome the biases of the supplier. Any given supplier may hold the key to a creative solution that can help achieve superior results.
Develop Sourcing Strategy
The sourcing strategy should be developed and approached as a fluid, evolving process. Fine tuning of the sourcing strategy will be required as the team interacts with the potential supplier base through implementation and measuring results. Take note, however, that as market conditions fluctuate, or the goals of the organization change, the sourcing strategy may need to be revisited. A common mistake of strategic sourcing initiatives is to get stuck on the initial process and strategy regardless of a complex or moving market. Always be prepared to revisit the strategy and reincorporate ideas that may have been overlooked in a prior strategy.
One of the first goals of developing the sourcing strategy is to separate the requirements into minimum needs and maximum desires. Minimum needs are those aspects of a potential supplier agreement that must be met (i.e. expedited shipping, company logo branding, specific payment options). If a supplier is unable to meet these basic requirements but can provide some unique value, then consider partnering them with a supplier that can meet the minimum requirements. Maximum desires are bonus features of an agreement that will prove valuable to the company, but are not “deal breakers”. Establishing these criteria will and communicating them to the supplier will assist in the qualification process.
Listen to supplier concerns and input on the market. Communication with the potential supply base is a key element to any sourcing initiative. Strategic sourcing should be a process that is mutually beneficial to both the customer and the supplier. Listening to and addressing supplier concerns will be motivating to both parties in the long run. Market information is invaluable to a sourcing endeavor. The wealth of knowledge that can be obtained from suppliers will have a positive impact on the project outcome and the cost-savings potential.
When sourcing a finished product, consider sourcing at the component level. In a case study, a large propane distributor was purchasing propane cylinders fitted with overfill prevention valves from one supplier. A sourcing strategy was developed to source the cylinder and valve as separate items with separate groups of suppliers. As a result of sourcing at the component level, the customer was able to realize significantly higher cost savings than if they sourced the finished product. This case study also shows an example of how creative solutions can increase bottom line savings.
Determine whether a single source or multiple sources is most practical for the product being sourced. While a single source may provide the best cost savings option due to economies of scale, it also limits the customer’s ability to rely on other sources of supply as a contingency plan. Is it best for your company to have a sole, competitive source of product? Or would you be better served by forging agreements with multiple suppliers?
Be careful that internal biases do not arise again, such as fear of an internal team member that the new purchasing pattern may develop additional work load for them, or that the logistics and material handling may become too cumbersome. At this stage of the process, the critical objective of the sourcing strategy should be to consider all the opportunities and attempt to identify the value in each one, not to disqualify ideas and opportunities.
Solicit and Evaluate Bids
After identifying the sourcing strategy, it is time to conduct the RFX (RFI, RFP, RFQ, etc.) process. The RFX document should be supplier-friendly. One of the most common complaints of suppliers is that complex static Request for Proposals do not allow them to talk about the benefits, ideas, opportunities, and competitive advantage that they offer, and only allow them to submit a financial response. A straightforward and uncomplicated document will encourage suppliers to participate and allow them to present their most competitive offer. Keep the RFX open-ended. This gives suppliers the freedom to present more creative solutions and introduce more fresh ideas into the process.
Sell to the supplier. Educate the suppliers and market to them the reasons why this business is attractive and valuable. Provide the suppliers’ salespeople with the business case that they can take to their management to drive steeper discounts and more value-added services. The more there is to offer, the more aggressive the suppliers will be in trying to win the business.
During the RFX process, open communication is once again a key element. Suppliers will often have questions about the RFX document and its content. These questions need to be addressed so that the suppliers can effectively respond to the RFX. Schedule individua
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