A recent article over on CNN Money that noted that the store theft cost to your family, largely due to a 9% jump in retail theft over the past year, is $435 — as shoplifting, employee theft, and supply chain fraud cost retailers $42.2 Billion between July 2008 and June 2009, had a surprising revelation.
Breaking this mega-loss down, we find that:
- 18.7 Billion is due to employee theft
which could be considerably reduced with better screening, security and processes
- 15.0 Billion is due to shoplifting
which could be somewhat reduced with better security, but will likely always be a problem
- 6.8 Billion is due to processing, supply chain errors, and frauds
which could be eliminated with good systems and processes
- 1.7 Billion is due to other causes
There’s no excuse for any errors. Good end-to-end e-Procurement systems can match every invoice against the purchase order and contract and make sure you’re only paying for what you ordered at contracted rates. Good forecasting and inventory tracking systems will prevent costly errors. And good visibility systems will allow you to spot any exceptions as soon as they occur and stop frauds, and fraudsters, in the act.
So now that you know that not using this technology is personally costing you, and everyone else in your organization, about $70 a year, why aren’t you using these systems? The reduction in loss alone over their service life-time will more than pay for them. (Not to mention the savings that a good sourcing, e-procurement, or inventory system can help you identify!)
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About a year ago, I introduced you to Trade Extensions (TE) on the eleventh day of X-Mas. A provider of an extensive on-demand e-Negotiation platform, Trade Extensions is an emerging player in the global e-Sourcing marketplace — one that offers negotiation management, extensive RFX, and (reverse) auctions with embedded real-time decision optimization.
Since my initial coverage, Trade Extensions has made the following significant updates to their platform:
- a brand new UI across their end-to-end system
The new UI is crisp, clean, and click-minimal. It’s quick and easy to use and very self evident. Plus, their online help pages are very extensive and updated regularly by the entire TE development and consulting teams.
- integrated data cleansing & classification capabilities
Have to fix a lot of data? Just create a rule and map it, just like you’d do in a spend cleansing and classification system.
- OLAP Reporting for Scenarios
Users now have access to full OLAP capabilities when viewing scenario results and reports.
In addition, the following features, which I have not covered before, have been improved:
- extensive modifications to their bid supplement functionality
Data — pricing, discount(s), rebate(s), etc. — can be captured at any level (supplier, business unit, plant location, etc.) and used for mark-ups, discounts, qualitative scores, or as the basis for any formula(s) the user wishes to define.
- flexible bid forms
Not only does TE support full Excel integration, but bid forms can be designed by the user to fit their business needs. There’s no need to force your information into a single system format. A user can create additional worksheets, add columns and rows to existing worksheets as required and add macros and formulas without interfering with the platform’s ability to read completed bid forms.
- outlier analysis and statistical reporting
The platform can automatically detect bids that might be too high or too low and flag them for your review (after you define your outlier rules, such as specific bid field values x% away from average / historic / custom calculation). The platform also includes a number of statistics reports, including a parameter statistics report that contains a detailed analysis at the lot and bid level.
- composed filters
Filters, which allow you to define constraints on any set of suppliers, ship from locations, ship to locations, products, etc., can now be defined on other filters to allow for very easy, and very powerful, constraint creation.
- selection sheets
Excel spreadsheets can be used to define allocation constraints, discounts, penalties, and multipliers … greatly simplifying discount and constraint creation in many cases.
- project management functionality
100% integrated into the cohesive e-Negotiation platform, the project management functionality allows for the creation of phases and tasks, the allocation of resources to phases and tasks, and the creation of scopes (by supplier, geography, etc.) as appropriate.
They’ve also continued to increase its power. Consider a recent project run by a financial services firm that tendered all of the components of a direct mail project that would result in the mailing of 1.8 Billion documents. The project, which consisted of 65,000 items, 60,000 transport destinations, and 400,000 bids from over 100 suppliers was valued at $1 Billion with a “B”.
The project was to ultimately deliver documents to the firm’s customers, but to get to that stage each part of the supply chain needed to be tendered. This included design, paper supply, printing, assembly, and transport. The project was completed as a single tender with offers collected on-line and all components tendered concurrently. In addition, suppliers could make conditional offers that reflected their own efficiencies that could present the firm with further savings. This was a project that could not even be attempted by hand as it would take someone close to two weeks just to scan each bid. There’s no way someone could even fathom attempting to optimize this scenario if all they had was a spreadsheet solution that couldn’t handle more than 65,536 rows.
Finally, TE is one of the few players in the market to make their pricing scheme public.
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