Marketing Your Requests for Bid

Associate Guest Post by Rusty Joerin of Woodsgift Enterprises

You have carefully prepared your RFP or Request for Tender document and consider it to be a great opportunity for a range of suppliers. You post it on a public bidding site such as BC Bid® or Civic Info® and wait for the responses to come rolling in.

If, as many do, you have a process that confirms receipt of the opportunity and you know that several good bidders have the documents – that is a good first step.

If you don’t have a process that confirms receipt of the request documents, you will not be able to gauge interest in your request. Even if you do confirm potential respondents, how do you know you have reached all qualified potential suppliers? There are plenty of excellent suppliers out there that do not log on to tendering sites looking for bidding opportunities.

You might be missing out on an opportunity as well. By doing some creative marketing of your request, you just might find the perfect supplier. Here’s an example: our facilities department was looking for someone to supply custom millwork. I prepared the request and then went looking for qualified responders. As a part of my search I called likely suppliers to millwork and cabinet shops. This led me to (among others) a small shop that did high quality work. He relied on word of mouth for business. I informed him and others of the posted bidding opportunity and how to get the documents. This shop became a valuable supplier to our facilities department providing excellent product for many years.

Creative marketing of your requests can include sending notice of your request to the likely suppliers of the type of supplier you are looking for. It is probable that they will know who the better suppliers are and pass along your information to them. Inform the local chamber of commerce and other pertinent associations that type of supplier may belong to as well.

Consider doing some supplier development in your community. A talk to the local Chamber of Commerce on how your organization sources its supply could provide you with an expanded range of competitive respondents to your next request.

More competitive responses to well constructed requests can mean greater value to organizations seeking the best available suppliers.

Rusty James Joerin, SCMP is a Supply Chain Management Professional and accredited by the Purchasing Management Association of Canada. He offers procurement services primarily to public sector organizations that do not have a professional supply manager on staff and provides additional capacity to assist with project related supply.

Information about his experience and qualifications may be found at:www.woodsgift.com

Issues That Bind

Associate Guest Post by Rusty Joerin of Woodsgift Enterprises

This is the third in our series entitled Find, Bind and Mind Your Suppliers.

The first thing to remember is that as you bind your supplier, so you bindyourself (or more properly your organization). As a result of some recent court decisions concerning the formation of contracts resulting from the solicitation of offers to supply, procurement professionals have explicitly stated in their requests that no contract will be formed until such time as an agreement to supply is reached with the best respondent. This statement will also apply to the respondents who also will be under no obligation to contract with you, although there is a presumption they will because they responded. I suggest that this clause be used with care and not be attached to every request. This issue is complex, still evolving and well beyond the scope of this message. Be aware of this issue, monitor the latest legal developments and seek expert advice.

There are situations where you definitely want to bind all respondents to a request to supply. Bid bonds have long been used as a tool to ensure that the preferred bidder will contract with you, even if they have second thoughts after bid closing.

I once experienced a situation where after a prequalification process one of the shortlisted firms backed out midway into the second phase of a high value, complex RFP which decreased competition by a third. For subsequent projects and with expert advice, we extended the bid bond process to ensure that all short-listed proponents to similar high value complex procurements were compelled to submit a viable proposal. In short the binding process was advanced a step.

Depending on the procurement, suppliers can be bound by the request document, contract terms presented in the request to be included in any subsequent contract or by reference to an industry standard document with supplementary conditions given in the request document.
The joy in all of this is that you, the buying organization, get to decide what the terms of engagement will be. My advice is to ensure that the terms are fair, which encourages competition and so that a resulting contract becomes a beneficial relationship for both parties.

Rusty James Joerin, SCMP is a Supply Chain Management Professional and accredited by the Purchasing Management Association of Canada. He offers procurement services primarily to public sector organizations that do not have a professional supply manager on staff and provides additional capacity to assist with project related supply.

Information about his experience and qualifications may be found at:www.woodsgift.com

Related articles

• Find, Bind and Mind Your Suppliers (psbdelegation.com)
• Find the Best Suppliers
  

Does Anyone Care if I'm Certified?

I've been delinquent in renewing my Purchasing Management Association of Canada (PMAC) annual membership. If I don't renew, my SCMP certification (Supply Chain Management Professional) will expire. For our annual business forecast & budget, I decided to question all expenses (as we do for clients), so I've been debating the benefit to being a member and maintaining my certification. (Rationale: I have an MBA so is the certification necessary?)

Of all my past & current employers and clients - only one has REQUIRED that I be a member seeking/holding certification...and that was for my first purchasing job. My manager was a wonderful mentor (and if you ever goto a PMAC National event, seek her out - Donna Lee Reid - Dufferin/Peel Catholic School Board - she's incredibly smart). Donna introduced me to the concept of 'networking' - because of Donna, I see the purchasing/supplychain/logistics profession as a group of peers ready & willing to help each other out. Whenever I need to buy something 'new to me', I contact someone who may have done it before to seek advice (Most of whom I've never even met in person!) Everyone has been willing to share their experiences & expertise.

From there, I 'educated' my next employer(s) on the benefits of the PMAC training and membership - I negotiated a deal that I'd save them more than they paid in my tuition (in actuality, I always 'earned' my annual salary in 'savings').

In later years, a director told the staff the certification meant "nothing" to them, but a business degree (especially an MBA) made more sense. As I crept up the ladder, strategy was more important than tactical thinking, but, the PMAC education went through phases to build strategic thinking, so yet again, I needed to 'educate' my employers and clients.

I completed my certification in 1999, back then it was called CPP (Certified Professional Purchaser)...in the last year, it's been rebranded as SCMP (which personally I think better reflects the education/experiences I've had in the profession). So with a new certification brand, I have to 'yet again' educate my clients (no its not a new certification, it's a rebranding of what I've always had..). So for this year's forecasts/budget, I had to question the benefits of my "Membership Dues".

Being a member does not get me discounts on Errors & Omissions insurance (that I require for government clients); nor does it lobby/educate government & corporations on the certification requirements as well as other associations do for their members; nor am I finding courses I want to take this year at a member discount. So what does my membership get me? Networking opportunities that perhaps I wouldn't have if I weren't able to open with "I'm a fellow member of PMAC"; I have fond memories of the program, and still keep in touch with fellow 'live-in course survivors'; I receive lots of 'free' trade magazines as a result of being a member and even if the clients/corporations don't understand the certification, some actually do put it in their requirements; there's opportunity for me to be a course instructor; I receive emails/calls from students in the program when they see my certification...

Perhaps the certification isn't about the education, courses & discounts per se, but instead its about what you do with it. I love teaching, and one of my dreams was to be one of the instructors for the final "live-in course". Perhaps it's like a marriage - I stuck to this through the good and the bad...I'm committed to seeing this through (I think I'll go write a cheque now)

What do you 'require' of your professional associations/memberships?

Related articles

• The Importance and Relevance of PMP Certification Requirements (pro2sell.com)

Better Value Procurements: Supply Stability

Guest Post by Rusty Joerin of Woodsgift Enterprises

Planning and effective contract management will ensure supply stability and avoid supply complacency. Things change, are you prepared?

Long term system contracts for the supply of standard products and services are a common method to achieve stable supply for a set period of time. Progressive organizations will incorporate in these contracts process for semi or annual review. A review will consider service level conformity to contract as well as price administration. Changes in volume may trigger negotiation of some terms as may be allowed for in the original contract. A spend analysis may identify opportunities for savings and greater supply stability.

Disruptive events will occur that may precipitate a supply crisis to the unprepared. Contingency plans to cover labour disruption, the loss of a key relationship manager or natural disaster that interrupts the chain of supply should be made. Even with our best efforts, not every situation will be anticipated, nor should it be. What is important is that an agreed process to manage disruptive events be addressed in any long term supply contract.

Time is your enemy, time is your friend.

Plan to make time your friend. Organizations that had “shovel ready” projects benefited from the recent time limited stimulus spending on infrastructure projects.

I am all too familiar with end of budget year spending that may not provide the best value to the organization. Annual needs analysis at budget time followed by early consultation with your procurement professional will deliver better value and supply stability – every time.

Complacency with supply contracts is not an option. When knowledge is shared between buyer and supplier, balance of power is maintained. Always know what you buy and when. This knowledge is critical when managing changes in long term supply contracts.

Supply stability is the result of planning, effective contract management and is in everyone’s best interest.

Rusty James Joerin, SCMP is a Supply Chain Management Professional and accredited by the Purchasing Management Association of Canada. He offers procurement services primarily to public sector organizations that do not have a professional supply manager on staff and provides additional capacity to assist with project related supply.
Information about his experience and qualifications may be found at:www.woodsgift.com

10 Ways to Better Procurements #2 - Mitigate Risk

#2 - Mitigate Procurement Risk

Risk exists and can never be eliminated but it can be mitigated through effective management and knowledge application. All of the articles in this series address risk issues, this is a summary. Procurement risks can be sorted into two general categories: contracting process and supply chain risks.

Laws relevant to the procurement contracting process continue to evolve as a result of case law initiated because one party to a tendering or contracting process was offended by the actions of another party. Involvement in these types of court cases is a huge risk to be avoided. This type of risk can be mitigated by application of equal, transparent and ethical treatment of all respondents to a procurement request. Easily said, but considerable diligence is required to implement. Professional procurement and legal expertise can assist.

It is possible to transfer risk from the purchasing organization to the supplier, however risk transfer comes with its own risks. Transferring too much risk will add to the cost of the procurement and/or may reduce the number of quality respondents. Use a fair balance and only assign risk to the party that has the most opportunity to control it.

Any organization’s supply chain can and likely will break from time to time. A sole supplier may lack capacity, a product may have quality variables or a disaster may close a key supplier’s facilities. These risks can be mitigated through understanding and knowledge of your organization’s supply chain (see #8 in this series). This includes knowledge of your supplier’s supply chain as well. Identification of the weak links such as geographical and/or corporate concentration of supply sources of critical components will assist in the formulation of supply chain risk mitigation strategies.
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Other Posts in the series: How to Add Value to Your Procurements
• Be Proactive
• Analyze what is required – bring clarity to the specification
• Understand the supply chain
• Align procurement strategies with corporate strategies
• Apply the highest standard of ethics
• Use the right tool for the job
• Plan contract management before there is a contract
• Learn from what was done
• Mitigate procurement risks
• Utilize the skills of supply management professionals

Over the coming year, Rusty Joerin, guest blogger, will expand on the above. Your comments are welcomed.

Rusty James Joerin, C.P.P. is a Supply Chain Management Professional and accredited by the Purchasing Management Association of Canada as a Certified Professional Purchaser. He offers procurement services primarily to public sector organizations that do not have a professional supply manager on staff and provides additional capacity to assist with project related supply for those organizations with purchasing specialists on staff.
Information about his experience and qualifications may be found at:www.woodsgift.com

10 Ways to Better Value Procurements - #6 - Ethics

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Institutions and companies that earn a reputation for good ethical behaviour will lower their business costs and gain customers. An institutional supplier will prefer to deal with institutions that do what they say they will do knowing that they will have a fair and equal chance of gaining the institution’s business. Similarly consumers will choose to patronize companies that offer products and services sourced in an ethical manner.

For procurement professionals good ethical behaviour is more than who buys lunch.

Traditionally good ethical behaviour is described by what does not happen. Persons in positions of trust do not benefit personally from their trust position through favouritism to individuals or companies. Sadly, this practice continues and we read about examples of bad ethical behaviour almost every day. The cost to business and reputation is enormous.

Today’s definition of ethical responsibility includes sustainability, fair treatment of workers and environmental responsibilities. Driven by citizen’s groups and fuelled by the power of the internet to reveal, business practices are changing in meaningful ways. “Greenwashing”, the practice making poorly substantiated claims of environmental and social responsibility, is not acceptable.

More and more companies and institutions are striving to build a reputation for superior ethical practices. To build and maintain a good reputation, supply chain professionals working for these companies are responsible for monitoring the practices of their suppliers on a continuing basis. Supply requests include questions about the sustainability of raw material extraction, labour practices in manufacturing, supplier business practices relative to material conservation, transportation and the effects of the purchased products on the local and greater environment. A visit to key supplier’s operating facilities can test the veracity of claims made. For enlightened companies and institutions the value of ensuring ethical responsibility across the supply chain exceeds its monetary cost.
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Other Posts in the series: How to Add Value to Your Procurements
• Be Proactive
• Analyze what is required – bring clarity to the specification
• Understand the supply chain
• Align procurement strategies with corporate strategies
• Apply the highest standard of ethics
• Use the right tool for the job
• Plan contract management before there is a contract
• Learn from what was done
• Mitigate procurement risks
• Utilize the skills of supply management professionals

Over the coming year, Rusty Joerin, guest blogger, will expand on the above. Your comments are welcomed.


Rusty James Joerin, C.P.P. is a Supply Chain Management Professional and accredited by the Purchasing Management Association of Canada as a Certified Professional Purchaser. He offers procurement services primarily to public sector organizations that do not have a professional supply manager on staff and provides additional capacity to assist with project related supply for those organizations with purchasing specialists on staff.
Information about his experience and qualifications may be found at:www.woodsgift.com

Ten Steps to Better Procurements: Understanding

Image via Wikipedia

Another in the series from our guest blogger Rusty Joerin:

#8 – Understand Your Supply Chain

Understanding your supply chain will avoid costs and political gaffs.

Some of the goods we buy are essential to have available at critical times or if not available essential services are interrupted and costly rush orders result. Many of us are concerned about the providence of the goods and services we buy.

A spend analysis will identify the items most critical to the functioning of the business and those most susceptible to logistical, ethical, and environmental issues. These are the priority commodities to begin an examination of the chain of supply from resource extraction to delivery.

It is probable that some of the issues resulting from the things you buy are not immediately obvious. For example, social networking firm Facebook was criticised for buying electricity from coal fired generators (Oregonian Feb 23, 2010). There are many questions you can ask about the component parts of the supply chain; here are a few of them:

Where are the raw materials mined? Are the workers treated fairly? Is the country politically stable? Are there toxic by-products from the refinement and how are they handled? Are there alternate sources of supply for key raw materials? Natural disasters and extreme weather events happen; do you have a back-up plan for supply?

How are the raw materials and component parts shipped to manufacturers and distributors? Through how many assemblers and distributors do your products pass and are you able to bypass some? Is child labour and/or sub standard work environment evident in the factories that make your products or provide your services? Are the companies involved in your supply chain financially stable?

To better understand your supply chain consider visiting your supplier’s factories and distributor facilities, run a credit check, and research your supplier and their supplier’s operations. A supply chain management professional will provide you with good advice.

Other Posts in the series: How to Add Value to Your Procurements
• Be Proactive
• Analyze what is required – bring clarity to the specification
• Understand the supply chain
• Align procurement strategies with corporate strategies
• Apply the highest standard of ethics
• Use the right tool for the job
• Plan contract management before there is a contract
• Learn from what was done
• Mitigate procurement risks
• Utilize the skills of supply management professionals

Over the coming year, Rusty Joerin, guest blogger, will expand on the above. Your comments are welcomed.

Rusty James Joerin, C.P.P. is a Supply Chain Management Professional and accredited by the Purchasing Management Association of Canada as a Certified Professional Purchaser. He offers procurement services primarily to public sector organizations that do not have a professional supply manager on staff and provides additional capacity to assist with project related supply for those organizations with purchasing specialists on staff.
Information about his experience and qualifications may be found at: www.woodsgift.com

What's in a name?

I'm finding myself immersed in a theme of "what's in a name". This morning I received an email from The Surge Group talking about what a business is - ie it's brand, name, logo or what they sell. It was an interesting article about brand being a combination, but in reality, your business really is what people feel about it. Made me think about people understanding a business, understanding they are in good hands, understanding the need for the help, support, results they get. Surge believes a recession will be a good test of a business - businesses that operate authentically have a brand as a 'result' rather than a brand they push onto the marketplace. Intrigues me, so much so that I'll be attending their next workshop where they're discussing this topic further.

What then led me to feeling immersed in this theme was reading a discussion board on the Purchasing Management Association's member's portal. The topic was regarding the 'renaming' of the C.P.P. designation. To say people feel passionate about the topic is an understatement. In reading the posts, this same thought haunted me, what is in the name? Does it really make a difference in what the credential is named? Do people understand it? Do people feel that someone with this credential is better qualified to do their purchasing, inventory management, strategic sourcing, negotiations, etc? Strangely enough, people believe the brand is the designation, yet ignore that the brand is, in a huge way, the membership. The misunderstandings come from the huge range of skills, understanding, and acceptance of the people performing these jobs. Accountants have three separate, distinct designations for the three "types" of accountants and what "niche area" they focus on. Does "supply chain" designations need to reflect different "niche areas"?

Does the designation "name" really matter? Are purchasing, procurement and supply chain understood by the marketplace as "different" areas requiring different distinct skills? Does the marketplace even understand the designation requirements? Who's responsible for this 'confusion' in branding?