Manufacturers, ERP and the cloud

on Thursday, December 18, 2014

Manufacturers, ERP and the cloud

A plethora of factors are contributing to the rise of cloud-based enterprise resource planning, one of them being the integration of Internet-connected devices into factories. 

Installing electronics throughout manufacturing facilities means the enterprises in charge of those centers are going to have a lot of data to store and process. As opposed to using one system to collect the information, a second to analyze it and a third to present it in an intelligible manner to personnel, allowing a single solution to perform these actions is much more practical. 

The cloud, visibility and opportunities 

Why aren't legacy or on-premise ERP systems capable of conducting the same activities as cloud-based solutions? "Scalability" is often a phrase associated with cloud computing, and for good reason. Not only can the software proprietor expand storage capacity to accommodate incoming information from devices and other sources, it can also access more computing resources to process that data and allow users to take advantage of a variety of features. 

Most importantly, a manufacturer's procurement department could benefit immensely from this build. A cloud ERP can be accessed by every employee within an organization who has permission to do so. In this case, a spend management consultant could log into the ERP and assess information produced by individual or multiple factories. From there, the professional could glean the following insights:

  • Whether factories equipped with new machinery are operating more effectively than others
  • How many units are produced on a daily basis across national operations
  • How material deliveries impact production rates

Bottom line: Cloud ERP solutions allow procurement officers to identify opportunities. According to Corey Rhodes, Amber Road's vice president of the Americas, failure to recognize instances in which new innovations or profits can be taken advantage of prevent companies from gaining competitive advantages. 

"Companies miss a lot of opportunities to innovate because they lack the agility to respond and execute when an opportunity presents itself," said Rhodes in a SupplyChainBrain video. "Sometimes they don't see an opportunity that is right there in front of them.

Some hesitation 

One of the main reasons why manufacturers may not be quick to jump on cloud-based ERP technology is involves the investment they have put into on-premise solutions. TechTarget's Tony Kontzer referenced a Gartner survey of leaders at businesses generating between $10 million to $10 billion in annual revenue. Of the 30 percent who maintained ERP solutions will remain on-premise, almost all of them were working in the manufacturing sector. 

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Perfect Your Indirect Through Organizational Support

on Wednesday, December 17, 2014

When an executive thinks of procurement management, he or she most often considers management of direct product or service purchases. Yet, in many ways, corporations are themselves consumers, obtaining whatever necessary assets required for operations to run as smoothly and efficiently as possible. Whether office supplies, fittings and fasteners, or disposable tools, indirect materials can present a large potential for cost savings. This is no surprise to the attendants of ProcureCon Indirect East 2015 being held February 11-13 in Florida. Source One looks forward to attending and sharing our thoughts on how to refresh the ideals of the indirect materials procurement process. One key area companies can see an optimized indirect procurement practice, for instance, is through gaining organizational support.

"If you think that you are a second-class citizen versus direct procurement, then you are going to get that reaction," said Brian Davy, head of non-production procurement at Jaguar Land Rover. "We're not the poor relation of direct purchasing, what we do is fascinating and varied." Making the strategic sourcing of the indirect procurement team attractive to the room of
C-suite executives is part of attaining the best materials for a business. A corporation cannot function on raw monetary capital alone, which is why it needs to be invested in both physical and intangible products that can improve the overall functions of the workplace.

There are many cloud computing solutions that aid in the process of streamlining communication between departments—a strong component of gaining organization-wide indirect procurement support. Pat Garrehy, CEO of Rootstock Software and contributor to Manufacturing Business Technology, noted that enterprise resource planning can offer companies the opportunity to reduce excess inventory from 20 to 30 percent, as it provides them with a better way to manage raw materials, parts and finished goods. Ultimately, a cloud-driven ERP solution allows indirect obtainment teams to anticipate product requirements, leading to firmer commitments with predictable lead times.

In addition to widespread support of indirect procurement, there are significant cost savings opportunities associated with ERP and procurement software that can manage and organize information, preventing the need for multiple spreadsheets and email messages coordinating inventory.

Source One loves to discuss this area, as it is the foundation of their publication, Managing Indirect Spend: Enhancing Profitability Through Strategic Sourcing. If you have any indirect procurement thoughts and you’d like to exchange ideas at ProcureCon Indirect East this year, please contact us at hgrossmuller@sourceoneinc.com and we can schedule some time to meet.

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Tips for Effectively Managing an Offshore Team

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As corporations continue to strive for ways to stay innovative, offshoring repeatedly comes into play. While a large portion of my daily work involves spend analysis, this evaluation cannot always be a long term solution without shifting and innovating operations. Offshoring becomes a viable option for organizations that see potential in relocating a business function to another country where it is less of a cost strain to operate. However, offshoring can come with serious pitfalls if the team is not managed correctly. Project Managers must figure out how to adapt to be successful in these new collaborative environments.  Presented are a few tips to assist in effectively managing an off shore team:

Maintain a 360 Understanding of the project at hand. Consider which lifecycle model is appropriate for the methodology at hand. You also should consider any unique deliverables that will come from the project. Transparency must be maintained at all times in this type of collaborative setting. 

Use time differences to your advantage. Offshoring presents the opportunity for work to continue to be completed beyond ‘work hours’. If tasks and deliverables are effectively laid out ahead of time, there should be no reason why work should not be able to continue. Time differences can also be used to make sure tasks are properly delegated ahead of time.

Be aware of communication barriers. Even with both parties able to converse fluently, things may get lost in translation, just as with internal projects. It is more important to plan accordingly and have a means to document all crucial details for future reference.

Be aware of scope creep. By maintaining a 360 understanding of the project, challenges like this can be well managed.  Even if you are new to a particular industry, by fully understanding the project, you are far less likely to underestimate the complexity of it.  It is also important not to simply exceed the scope with the false belief that you are adding value. This can especially complicate things when working with an offshore team. 

Manage risks proactively. Thanks to constant technological advances, physical distance is no longer a principal problem for offshore teams.  Risks now come down to how effectively the process is managed. While it is impossible to prevent all risks, building a team that is able to promptly handle any unforeseen threats will aid in cutting down the severity of such problems.  It is vital to identify risk early and openly communicate about any possible risks with your team, both internal and offshore. 

Acknowledge progression. While many of the tasks at hand may seem trivial to the overall picture, it is important to take time to thank everyone for their involvement. 

Offshoring is often viewed negatively because individuals believe these outside parties are there to "take their job”. This is also a common assumption that people believe with procurement.  In reality both procurement and offshore teams are utilized so that corporations can continue to free up internal resources to use in higher priority areas. Offshoring can present an opportunity for team members to continue to focus on their core competences.


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Want sustainability? Revisit your supplier relationships

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Want sustainability? Revisit your supplier relationships

A company's supply chain is only truly sustainable if its suppliers' leadership is equally committed to the cause.

If just one partner fails to implement operations that disacknowledge environmental or social considerations and neglects to use resources efficiently, the enterprise procuring goods from this entity will have an incomplete sustainability strategy. 

Finding out what you need to know 

In order to ensure each supplier is conducting sustainable practices, organizations need to make concerted a effort to obtain intelligence regarding B2B relationships. IndustryWeek's Sara Greenstein maintained that a failure to acquire a comprehensive view of the supply chain can not only hamper positive environmental or social movements, but can cost businesses an incredible amount of capital. She cited three instances in which procurers suffered as a result of the actions of their suppliers:

  • Apple's reputation encountered some setbacks in 2012 when investigators uncovered unfair and unsafe employment practices by Chinese manufacturers that were producing iPhones. 
  • Mattel was forced to recall nearly 1 million toys in 2007 due to lead paint used by its supplier in China. 
  • In 2012, Nintendo received poor marks regarding its efforts to ensure it wasn't directly or indirectly sourcing conflict minerals. 

Greenstein asserted that these grievances occurred because the aforementioned companies failed to gain full control over their sourcing. She maintained companies can resolve this issue by implementing more stringent policies regarding suppliers. For example, during the request for proposal process, the purchasing department could implement a clause that obligates suppliers to submit regular reports detailing sourcing, labor and environmental practices. 

Developing supplier metrics 

Jessica Wollmuth and Velislava Ivanova wrote a piece for GreenBiz acknowledging the importance of establishing standards to impose upon suppliers. The duo recommended using a simple benchmarking questionnaire or self-assessment document. In addition, companies should connect with their suppliers' other customers to deduce whether hidden problems are falling through the cracks. 

Wollmuth and Ivanova also noted that organizations can take advantage of industry-specific questionnaires. For instance, electronics and IT hardware enterprises can access the Electronics Industry Citizenship Coalition Self-Assessment Questionnaire while those in the drug sector can make use of the Pharmaceutical Supply Chain Initiative Self-Assessment Questionnaire.

For example, Pacific Gas and Electric uses the Electric Utility Industry Sustainable Supply Chain Alliance survey to identify how well its suppliers are performing in regard to greenhouse gas emissions production, a key issue that is impacting many electricity providers across the United States. 

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Medical Device Sourcing Developments

on Tuesday, December 16, 2014

Source One is proud to announce that it is sponsoring the 1st annual Medical Device Strategic Sourcing Conference in Atlanta, Georgia this upcoming January 26-27, 2015. With the upcoming conference and recent recalls of medical devices over the past few months, Source One has been paying much attention to the spend category.

With heavy pressure to cut costs and boost efficiency, the U.S. medical industry has been stressed by additional costs brought about by injuries due to use of recalled equipment. With these recent developments, the FDA has been heavily criticized for their medical device approval procedure and its effectiveness. To reduce costs of not only medical device manufacturing but also ensure adequate testing on finished products to prevent any recall controversy costs, medical device manufacturers must seek out the highest quality materials from a reliable source for a competitive price.

A recently emerged trend has companies contracting with suppliers in Mexico and other Latin American countries over low-cost Asian countries to accommodate these needs. While the reasons are numerous, many companies assert Mexico's highly-educated workforce, infrastructure upgrades and ability to avoid import tariffs in certain countries have driven the shift.

According to a recent whitepaper by The Entrada Group, companies are able to achieve a competitive edge by sourcing medical device components from Mexico as opposed to other countries due to rising health care costs and the pressure to meet competitive price levels.

If a medical device company plans to sell its products in North American markets, but endeavors to keep costs down, Mexico presents a perfect compromise, the whitepaper concludes. First, a medical device company must decide what the total deliverable costs of sourcing the product in another country will be; while many Asian countries undoubtedly provide low-cost labor, there are often bigger costs incurred in transporting those goods to North American markets.

According to Doug Donahue of The Entrada Group, “With Mexico’s introduction of the Maquiladora business model in the 1960s, and the enactment of significant national trade agreements such as the North American Free Trade Agreement (NAFTA), Mexico continues to be a prime supplier of products for sale to the U.S. and other global consumers.”


Although each scenario has its relative pros and cons, the nearshoring trend is a notable development worth keeping an eye on for medical device manufacturers. Source One looks forward to the Medical Device Strategic Sourcing Conference to hear industry insights and share our observations of the market. If you are planning on attending the event and would like to meet with us to share your own ideas, please contact Source One Marketing Manager Heather Grossmuller at hgrossmuller@sourceoneinc.com

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Redirecting procurement to improve production companies' 'support' teams

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Redirecting procurement to improve production companies' 'support' teams

Manufacturing firms are concerned with two facets of purchasing: indirect and direct procurement.

Direct procurement involves acquiring raw materials or components produced by other organizations for intent of creating finished products with those resources. For instance, an automotive company may source spark plugs from a firm that specializes in making vehicle electronics. 

In contrast, indirect procurement is the practice of purchasing services, supplies or products to support day-to-day business operations. This includes acquiring everything from paper clips to enterprise software. While buying paper clips is a task best undertaken by individual departments, obtaining an application for an entire business' marketing team, for example, is a responsibility of centralized procurement groups. 

Which practice receives priority? 

Neither indirect nor direct procurement should be prioritized over the other. However, the way in which professionals approach these two responsibilities must be different. In the case of indirect procurement, those responsible for purchasing new assets must deduce how they will contribute to the company's functionality. 

For manufacturers, it's easy to get caught up in the direct method - purchasing quality materials at a price that will allow them to turn a profit and establishing relationships with suppliers that exercise sustainability and social cognizance. However, failing to pay attention to what sales, human resources, IT and other departments are using to conduct their jobs will cause production operations to suffer. 

Scrutinizing the performance of the 'upstairs factory'

William Heitman, a contributor to IndustryWeek, referred to HR, marketing and other such departments in manufacturing firms as "upstairs factories." He acknowledged the actual production facilities as customers of these back-end operations.

"[Upstairs factories] make 'products' that optimize the downstairs factory and the business overall," wrote Heitman. "Astonishingly, however, companies run their upstairs factories as if the principles of continuous improvement they apply relentlessly downstairs don't apply upstairs."

Basically, Heitman maintained that factories are often the subject of intense scrutiny. Managers of these facilities are often criticized if even minor inefficiencies go unacknowledged - everybody's looking for a better way to build widgets.

No metrics to glean insights

Heitman noted one multibillion-dollar production firm that monitors cycle time and error rates throughout each of its factories. In contrast, it doesn't employ any method of measuring the effectiveness of its sales operations. As a result, receiving, booking and processing orders takes 20 percent longer than producing and delivering products. 

Performance metrics may seem inapplicable to procurement, but they can provide spend management analysts and other professionals with insights regarding how assets (software, products, etc.) are helping their "upstairs factories" perform. For instance, a statistic regarding sales lead conversions may signify redundancies in a customer relationship management program. 

Which facets of the 'upstairs factory' need revising? 

Heitman focused a lot on how well the financial department operates. For instance, some professionals working in these teams may create reports for people who request them, but either give files names that mean nothing to their co-workers or simply fail to share them. 

With this kind of approach in mind, Heitman recommended several "downstairs factory" practices that can help financial departments operate more efficiently:

  • As opposed to conducting financial reports on an ad-hoc basis, Heitman advised employing a demand management strategy, which would reduce workflow waste by 15 percent.
  • Instead of storing reports on individual desktops, it will benefit finance teams immensely if they use a cloud infrastructure to hold those documents. 
  • To measure efficiencies, professionals should devise a metric that not only identifies the exact cost of creating a financial report but also assesses why expenses are so high or low. 

Ultimately, taking these measures will give procurement officers an accurate perception of what financial departments require in order to perform their jobs at a level that is monetarily acceptable. 

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Luxury Brands Are Building Stronger Supplier Relationships

on Monday, December 15, 2014

A recent study revealed that luxury goods brands ensure strong relationships with suppliers to instill a high sense of trust and support. In this type of collaborative setting, suppliers are more willing to push their capabilities and go the extra mile to confirm quality. With the value they realize from relationships, it’s no surprise that premium brands have a thorough understanding of SRM and how this guides their strategy closer to objectives. With that in mind, SRM enthusiasts are left to wonder what makes the luxury goods market so easily cognizant of the importance of supplier relationships and why haven’t other industries caught on as actively.

One interesting, yet arguable point presented by Supply Management, states that “[Premium brands] are also more driven by being the ‘customer of choice’ for suppliers, rather than obtaining cost savings, because of their focus on quality, exclusivity, cutting-edge technology and customer experience.” This can be true in luxury brands for the reasons listed; however SRM programs don’t have to be major cost centers. They can be just as effective, even in the luxury goods industry, with a cost-saving inclination. In fact, SRM programs are a great tool to mitigate risk and minimize costs.

Nothing bridges the gap between procurement’s category strategies and stakeholder needs like supplier management. If there’s a growing appreciation for that, it’s probably attributable to a growing maturity among functions that effectively communicate and manage the relationship between suppliers and stakeholders, as well as more nuanced technology.

SRM Programs are also prevalent in luxury brands because these high-end organizations feel the need to build and maintain loyalty with their suppliers. In return, the supplier will have a very positive opinion of their brand and they are more likely to receive good feedback from suppliers. However, this is not the only requirement when it comes to SRM. Another quality that is extremely important, which luxury good organizations seem to lack, is the ability to develop and incorporate a well-organized procedure that will help reduce costs.

In a recent study completed by Supply Management they state, “When asked how the procurement function would evolve over the next three years, just under two thirds of respondents thought the role would grow in importance, moving to making board level decisions. A fifth of those polled said their CPO already had a place on the board.” This poll is one example of how important it really is to build relationships in order to attain continuous success, not only internally with stakeholders but also externally with suppliers.

The possibilities of enhanced supplier management practices by enriching every point of interaction between the business and its suppliers are huge: governance, risk management, innovation, and enhanced spend visibility. The right system could change the entire relationship and empower stakeholders to make informed buying decisions. This can be achieved in an assortment of ways which best fit each business’ objectives. Source One helps organizations manage their SRM activity in a way that is best suited to their organizational needs.

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Will truck fleets support the rise of compressed natural gas?

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Will truck fleets support the rise of compressed natural gas?

Those in charge of spend analysis at logistics firms may have taken a glance at the price disparity between compressed natural gas and diesel fuel. The former fuel source is much cheaper than the latter, but procuring CNG would mean replacing vehicles. 

The transition wouldn't have to occur over night - gradual integration into existing fleets is the best approach to take. However, there aren't many gas stations distributed throughout North America that sell CNG, which complicates distribution routes for logistics companies. Is it only feasible to use CNG-fueled trucks in certain regions? How fuel-efficient are CNG vehicles? These are just two out of a list of questions logistics firms are asking themselves. 

Is the price right? 

From a cost perspective, CNG looks attractive as prices stand in the present. CNG provided a graph to interested parties regarding the cost of energy derived from fossil fuels. As of now, the average gallon of CNG costs $2.11, while the same measurement of diesel stands at $3.89 - a huge disparity that has certainly caught the attention of spend management professionals. 

While these are certainly attractive figures, logistics firms know the volatile nature of the fossil fuel economy all too well. Predictive analytics and other tools can help fleets prioritize shipments according to projected fuel expense figures, but these applications can only get a company so far. 

Are the locations workable? 

As far as location is concerned, the U.S. Department of Energy's Alternative Fuels Data Center noted there were 791 CNG stations located across the country. High concentrations of these stations were in Oklahoma, the Wisconsin side of Lake Michigan, New York City, Los Angeles, the California Bay Area and Salt Lake City, among other areas. 

Given these statistics, it's certainly feasible for a logistics company to set up operations with CNG fleets. Thanks to GPS analytics and Internet-connected devices, cloud-based fleet-management tools will be able to assist supply chain management firms in orchestrating routes that factor in CNG stations. However, if a business participating in this industry doesn't have such technology in place and wants to use CNG trucks, procuring the software and physical assets necessary is a must. 

How expensive are the vehicles? 

Some fleet administration experts would assert that the trucks they have at their disposal don't need to be replaced. For others, the case may be different, but the upfront cost of procuring CNG freight vehicles may cause them to shy away. 

Clean Logistics Consulting President and Founder Patti Murdock has been a strong support of the energy, but she also recognizes the drawbacks associated with CNG. While the price-per-gallon appears enticing, she acknowledged that CNG trucks typically get 10 to 15 percent fewer miles per gallon than diesel. The expense savings can only be realized when​ a truck's trips are long. 

"You want to look at your network very carefully and understand the options. This is not a fuel where you can just pull up and fill the tank when it's low – you have to be more strategic about it," said Murdock in a video on SupplyChainBrain. "A truck needs to log 80,000 to 100,000 miles annually to justify switching to natural gas." 

Can CNG be used as a differentiator? 

For logistics companies looking to leverage their use of CNG as a marketing strategy by claiming it's more environmentally friendly than diesel, they're out of luck. USA Today referenced a study conducted by 16 scientists from federal laboratories and seven universities, which found that while natural gas is cleaner than diesel, extracting it releases methane gas, which contributes to global warming. 

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The Incentive for Governments to Remove Income Tax on Corporations

on Friday, December 12, 2014


The Incentive for Local and State Governments to Remove Income Tax on Corporations



When the United States is in a recession, why is it so hard to see that an easy solution is to remove taxes on businesses and let them utilize more of their incoming money?
When the unemployment rate is not where it needs to be, why is it so hard to see that jobs come from corporations and corporations employ more when they have more money?
When people are faced with the choice of working for minimum wage when they have higher education degrees or be unemployed, why is it so hard to see that we need change.
There are five different taxes corporations in the Unite States face, according to the Internal Revenue Service: Income, estimated, self-employment, employment and excise taxes. Corporations are interested in investing in communities that will give them the best value for their time and money, not in giving their money to government. All levels of government need revenue in order to provide services for their citizens, but corporations provide more jobs than the government do; let the governments tax in other areas.
Corporations are not people (although some people believe they are). If companies are treated like people (especially in the way of taxes) then they are not going to employ as many people as a community would hope for. They are a resource for a community to rely on. Corporations need to keep as much of their earnings as possible so they can bring it back to the community to provide consumers with deeper pockets that help the local economy growing.
Corporations have the choice in deciding where they will employ and most corporations choose to go where the taxes are low; they can not only save a community from becoming bankrupt, they can become more profitable. It is a direct correlation. Where corporations go, jobs go with them. Provide tax incentives and corporations will come and the community will be employed (and real estate value will go up as well!).
Forbes came up with a list “Global Corporate Tax Rates From Lowest To Highest.” Bahamas, Bermuda, and the Cayman Islands are known for places corporations should incorporate (aside from their pristine beaches). Corporations have been taking their business to Malaysia, India, and Taiwan year after year such as Sealed Air Corp, Callaway Golf Balls, and Agilent Technologies. Why should the United States keep losing jobs and income and profits just because the two political parties won’t lower or remove the taxes on corporations?
The United States has 128 companies in the Global 500, according to Fortune, but if our government doesn’t start implementing change to its policies when it comes to taxing corporations, China and Japan will soon surpass us on the Global 500 list.
When it comes to strategic sourcing there are some basic principles: finding the lowest cost with the best value is one of them. How is a corporation going to do that when they have to sacrifice their money just to be incorporated or do business in a country? In order to save money manufacturing, sourcing teams are forced to outsource. Sourcing for services is becoming increasingly more difficult when hourly rates keep going up along with taxes. It is not always a clear answer whether or not to move labor overseas or near shore, but taxing the corporations does not help give them a reason to stay.


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Leveling the Playing Field: New Legal Services Models Affect Sourcing Strategies

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Legal services remain vitally important to (and significantly expensive for) organizations of all sizes and types, but many pressures have changed the space in a way that is tough to keep pace with. Market fluctuations and technological innovations are just some of the factors that have created this new landscape, filled with the traditional law firms of old, and now, a new generation of legal services providers with new models and specific niches. These providers have influenced the market so much that they have affected not only the models of solo practitioners and small-to-medium sized law firms, but also legacy Big Law firms.

This may seem like a lot to digest, especially when these changes happen at such a fast pace, but it is worth the minor and temporary headache. Buried deep in all of this new information are trends that, when recognized and understood, can allow you to more strategically source your company's legal services. Consumers of legal services now have the ability to see more transparently into a market that used to be purposefully opaque. So what are these new models and niches?

Executive management and strategic sourcing centers of excellence now have access to legal services providers that sometimes seem to mimic consulting firms.  These firms provide analyses and proposals about how an organization should manage their legal work, in addition to offering in-sourcing and outsourcing options. You can hire their attorneys to work on-site, off-site under set terms, and in other arrangements, potentially saving you hundreds of dollars per lawyer per hour. These firms can be hired for everything from document review on a discovery request, to ad hoc contract overhauls, to providing the full set of services that a legacy Big Law firm might provide. Minimize cost, maximize quality! And don't be fooled; these are not just small players. Yes, some of these innovative, non-traditional, and lower-cost providers focus on new niche markets or more traditional temporary-attorney staffing that may utilize newer lawyers with less experience. Others however, offer seasoned Senior Partner-level attorneys with decades of deep & broad experience, rivaling Big Law firms in their reach among the Fortune 50 and beyond.  

The changing landscape has not just affected Big Law, however, and it does not just require adjustment in the the sourcing strategy of large multi-national corporations. Start-ups, small businesses, and mid-tier companies have new and better options in this more leveled playing field as well. The rise of well managed attorney networks has skyrocketed, especially due to the the marketing capability of social media. These networks or firms, and attorneys within them, are far more transparent and up-front in terms of pricing structures than this space has traditionally seen, providing new and robust options to smaller businesses that did not have them previously. Providers focusing on and excelling at e-discovery have also created a robust niche of their own, operating  simultaneously as software service providers and law firms. Providers of this kind have gained clients from some of the fastest growing mid-sized companies in the US to the established Global 1000.

The existence of these providers in the market has changed how even the most traditional of law firms operate. The competition at all levels and across all niches has given executive management across industries and markets more options and the ability to gain better visibility and apply new metrics when approaching the legal marketplace. Instead of trying to fathom the black hole of law firm spend, strategic sourcing teams and procurement business leaders can now segment, stratify, and apply more methodical processes to this category. An e-discovery project that requires the sourcing of software, IT experts, and attorney-experts can be managed apart from other traditional services, and a modified managed IT services strategy can be a part of the solution. The C-Suite may initially want benchmarking insight that eventually leads to a sourcing initiative that centers around apples-to-apples comparisons of a traditional law firm, a temporary attorney-staffing firm, and a legal consulting provider's value propositions in relation to doc review projects. The cross-functional team tasked with determining who provides the highest quality output at the lowest comparable price-point, in alignment with the sponsor's strategic and long term goals, has a tough task ahead of them. Fortunately, today's environment has made that team's job easier due to the ability to leverage more visible and accurate data across the legal marketplace as well as other industries and categories. This team can tailor a solution that combines a professional services sourcing approach and an HR procurement strategy with a focus around new legal billing models offered today by traditional and non-traditional providers alike. 

Ah, the beauty of innovation and competition. Happy Sourcing. 

For innovative approaches to legal services strategic sourcing and other value-added procurement processes, please reach out to Source One Management Services, LLC or visit www.sourceoneinc.com

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Is the transition away from GMO sourcing just beginning?

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Is the transition away from GMO sourcing just beginning?

It's unlikely that supermarket executives haven't considered procuring foods that aren't genetically modified. 

The stance against food products containing GMOs is growing every year, with more consumers advocating for healthier, more natural edible goods. However, farms, ranchers and other participants in the food industry who produce such items are, in many ways, hard to come by.

That's when the "relationship" part of strategic sourcing comes into play. For example, say a group of purchasing officers working at a national grocery store chain is tasked with connecting the brand to organic growers and livestock raisers. Reaching out to journalists who have a vested interest in the food industry, regional supermarket managers and even competitors will help them develop a network of sources they can tap into to procure the kind of items health-conscious consumers are looking for. 

Paying attention to representation 

One factor grocers pay attention to when purchasing foods that contain GMOs are the labels and packaging manufacturers use. Depending on the audiences supermarket chains are targeting, procuring items that notify consumers of the presence of GMOs may cause some shoppers to shy away. 

However, pro-GMO advocates, such as Kansas Rep. Mike Pompeo, have asserted that some public policies mislead consumers into thinking GMOs are detrimental to their health. According to The Associated Press, Vermont recently passed a law that would require food producers to label foods containing GMOs if they choose to sell in the state. The law will take effect in mid-2016 in the event legislative challenges against the mandate are unsuccessful.

Out of legal boundaries 

What about the restaurant chains that serve food derived from GMOs to customers? Advocates against GMOs are publicly asking major food service companies to take responsibility, "do the right thing" and procure goods that are devoid of GMOs entirely. 

Tom Karst, a contributor to The Packer, acknowledged an open letter written by Organic Consumers Association International Director Ronnie Cummins to McDonald's CEO Donald Thompson asking him to "reject a GMO potato newly approved by the U.S. Department of Agriculture (USDA)." Cummins acknowledged a statement made by a McDonald's spokesman who maintained that McDonald's does not source GMO potatoes, asserting that the chain "does not go far enough."

"It's true that you do not currently source GMO potatoes," wrote Thompson. "But that would be true for any restaurant or other buyer, because there are no GMO potatoes available yet to purchase." 

Whether McDonald's will diverge from its sourcing practices depends on the sentiments of its customers. 

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Cooking Up A Perfect RFP

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A large portion of developing a comprehensive sourcing strategy involves ensuring accurate documentation. A cohesive request for proposal (RFP) is no exception to the rule. An RFP is put forth when a company is looking to accept bids for a particular project, opening up a potential business partnership to a wide range of suppliers. From its birth during the RFx stage, the success of an engagement can largely be shaped by the clarity of the terms and outline of necessary steps found in an RFP. The below infographic elaborates on several components of this document that are instrumental in creating a smooth transition to the next phase of the purchasing process. With all information laid out clearly, an articulate RFP can make expectations known and allow for a better communicated scope of work.

To enhance your sourcing process further, Source One is a key resource for organizations who seek to get the full value out of their procurement activity. Our free e-sourcing tool, WhyAbe, includes RFx management capabilities to aid in the clarity of this sometimes complex process.


The next time you are putting together the “ingredients” for a best-fit RFP, remember this handy recipe.


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