Buy Better with Marketboomer

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    Notes on slide 1

    Marketboomer’s value proposition needs to be broken into two chunks to be understood.On the one hand, Marketboomer provides a technology which is represented by the blue bubbles. On the other, Marketboomer provides services and support that enables our clients to buy better and take cost out of their supply chain.Our technology represents only a fraction of our true value, it is our services and content (central catalogue and supplier base) that represents the majority of our value.We provide proactive support to our buyers and suppliers to ensure both parties get the most benefit possible out of our solution.For clarity, it is not Marketboomer’s objective to provide our clients with technology alone, the technology is simply a means to an end. Our objective is to help our clients buy better and take cost out of their supply chain in doing so. The technology is simply a vehicle through which we achieve this goal.

    This slide shows how the ordering, receiving and invoicing process flows through Marketboomer

    One of the challenges for purchasers in selecting the best price from competing suppliers is that everyone uses different descriptions and codes for the same thing.This makes comparing prices amongst competing suppliers time consuming and complex.

    In addition, purchasers working within a group will also typically use different descriptions and codes to describe the things they buy, making comparisons on identical items difficult and time consuming.

    Once the purchasers Product lists have been mapped in Marketboomer, it is possible to start to see what the group is buying as a group. This then provides the opportunity for the group to negotiate group level deals with suppliers and effectively leverage its group buying power.

    This is an example of an actual report generated by a client using Marketboomer. The report summarises the actual price paid for identical products by different purchasers in the same group (in a similar geographic region and over the same period of time).In evaluating opportunities for immediate savings, the report first sorts products purchased by all participating properties to the top.It then shows the variance in price paid for these products by the different properties. Notice how no one property has a monopoly on either the most expensive or least expensive product, every property has something to learn from the other properties. Importantly, it spells out the opportunity to leverage the groups buying power and to learn from each other.

    Whilst it may seem unusual to present a slide on ‘Why not to implement Marketboomer’ it is important to address issues Marketboomer has encountered in the past that have impacted our clients ability to fully enjoy the benefits of buying better.One of the core obstacles to buying better is the belief that the business already has the best prices possible in the market. To this assumption, we would ask the question “how do you know?”. In our experience the answer is that they don’t, they just assume this to be the case or they trust that their colleagues are doing the best job possible. Both assumptions are typically very costly to the business.A second obstacle is that a client my choose for their own reasons to only purchase from a specific supplier and not permit competition to take place. If this approach were to apply, Marketboomer would not be able to create a more competitive environment for the client.If asked “what could you save if you knew that every time you purchased anything, it was at the absolute best price it could be?”, what would be your answer? Factor in the elimination of corruption (or risk of corruption) and improved processes and see if the answer supports a viable business case.Some businesses are lucky enough to not need to achieve savings in procurement costs even though they are available. They are more focused on growing revenue or building their brand and ‘don’t care what it costs’. Given Marketboomer’s focus on cost reduction, this is a good reason not to consider Marketboomer as a suitable solution. One of the primary challenges in implementing a system like Marketboomer is managing the change within the organisation (implementing the technology is not the hard part!). If your management team are not up to the challenge, then Marketboomer may not be right for you.A key challenge to implementing Marketboomer is end user resistance. This is typically because end users resist change of any form, but in particular they can resist change that brings about greater transparency and accountability to purchasing and stock control. Marketboomer exposes and eliminates many vulnerabilities and inefficiencies in old practices and this is frequently not to the end users personal benefit. If you are not in a position to drive change within your colleagues and dictate new processes then you should seriously consider your ability to change how you purchase.Marketboomer is not a free or cheap solution. It costs money to deliver the best technology, support and ongoing savings (which more than exceed any Marketboomer related fees). However, if your organisation is more concerned with what Marketboomer’s revenue will be than what their savings will be, then this may not be the solution for you.Marketboomer is an Internet based service and requires a minimum level of hardware and internet connectivity. PCs should be running a currently supported version of a Microsoft operating system and should have a minimum of 2GB of RAM.Best Buy relates to using Marketboomer to help a client automatically select the best price from a community of approved suppliers for a given product specification (and quality). Some businesses question if genuine competition (which ultimately leads to more competitive pricing) is possible in their circumstances. We believe that in all cases this is possible but given the issues get raised frequently by our prospects, they are addressed here:If you believe that there is a monopoly in place then you will be less likely to be able to create a competitive market. However, Marketboomer would suggest that:a) by using our solution to combine and leverage your group buying power, you can negotiate more effectively with monopoly suppliers and b) any monopolies you find yourself in are frequently self imposed. If you are prepared to be flexible with your product choice, you will find the monopolies can be broken. For example, if you will only buy Heinz Baked Beans then you may find yourself in a monopoly but if you are prepared to purchase other brands of baked beans, then you will break the monopoly.If you are trying to create a competitive market between competing suppliers, you will need to ask them to submit competitive prices to you for consideration. If they are not prepared to do this and they wouldn’t care if they lost your business then this would be an inhibitor to creating a genuinely competitive market. However, if you are in this position with suppliers right now, you will definitely be paying more than you should for what you purchase. The only way to ensure you enjoy the best prices is to ensure your suppliers would be worried about losing your business!3 If your suppliers simply won’t let you implement a solution that will improve the way you buy (i.e. by refusing to participate or supply you if you do implement the system) then you are in a very weak purchasing position and should be very concerned. In our experience the suppliers that resist or obstruct the implementation of a system that will improve transparency and competitiveness are the suppliers who are making the most margins and therefore have the most to loose by you improving the way you buy. Ultimately, you have to decide who is in charge of how you buy and who you buy from. In all too many cases, we find that it is actually the suppliers who are deciding who will supply the purchaser (through collusion, price fixing etc), not the purchaser deciding who they will award the business to!

    There are many reasons why implementing a solution like Marketboomer makes real sense for a business. These include the improvement in processes, transparency, efficiency and reporting capability our solution delivers.However, most businesses ultimately choose Marketboomer because they want to enjoy better prices and lower costs.

    Businesses should be mature about the effort that is required to bring about change in how they purchase and manage their suppliers, costs and inventory.In the early stages, this change creates more work, not less and organisations need to be sure they are prepared for the commitment that is required to bring about real improvement.

    Once Marketboomer is implemented, the real benefits start to come from the organisations ability to analyse their prices and costs. Marketboomers ‘Ask > Answer > Action’ flowchart is a simple yet powerful approach to ensuring you are asking the right questions, getting the right answers and most importantly taking the right actions to improve your costs.

    As part of the ‘Ask > Answer > Action’ process, Marketboomer provides a range of management reports that show how prices are moving for the products you purchase. The example in this slide showstrend movement in pricing per category over a user defined period of time

    This report shows product purchased in order of value along side the number of suppliers quoting for these products and the variance of price between the highest and lowest quoted price.The purpose of this report is to guide the purchasing team to focus their attention on products purchased in high volumes / values and ensure that they have sufficient quotes and that the quotes received are appropriate (i.e. sometimes a supplier will misunderstand the pack size and quote on the wrong quantiy).

    Shows the cost of current supplier selections over allowing the system to select the best offered price

    Implementing Marketboomer typically takes between 3 and 6 weeks.

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    Buy Better with Marketboomer - Presentation Transcript

    1. “The price of monopoly is upon every occasion the highest which can be got. The natural price, or the price of free competition on the contrary, is the lowest that can be taken.” Adam Smith, The Wealth of Nations, 1776 eProcurement is not just about doing things differently, its about doing different things. Australia | Ireland | United Kingdom | China | United Arab Emirates | Saudi Arabia | Thailand | Singapore | Indonesia buy manage supply
    2. What does Marketboomer do? Manage Marketboomer helps businesses Inventory leverage their natural buying power (Integrate with POS) Manage Order, Recipes with Receive & real time Invoice costing (Integrate with (Integrate Finance) Technology with POS) & support ‘manage manage better’ better ‘buy buy support ‘supply supply better’ better better’ better support support Source new products & suppliers Marketboomer helps businesses Communicate effectively (from our buy & supply better with suppliers centralised catalogue) Report & Analyse (view in Excel) Supplier info Web Site Supplier managed pricing Focus executive Supplier generated Invoices time on high Supplier registration value activity buy manage supply
    3. Ordering, Receiving & Invoicing in Marketboomer Suppliers update pricing online or by phone / fax. Price movement reports keep Purchaser on top of supplier Flagged pricing Purchase Receiving Automated Order Note Approval Invoices Process Requisitions Reconciled & Transfers Transfer Inventory / Recipe System Transfers & Stocktakes Finance System Generate transfers and flash cost reports from POS Imports buy manage supply
    4. Marketboomer’s unique approach to Catalogue Management… Practical Example: Your operation buys chicken Supplier 44334 C Chix-Breast • What kind of chicken do you buy...exactly? 4.90 • How often and why do you select certain suppliers? • Are you are getting the best price? (how do you know?) • Are there other suppliers in the market with better pricing that you may be unaware of? 564436 Chicken Breast Fillet 4.10 C410 You Ckn Skinless Fillets 210g-230g 4.74 Branch B2 2332 CHIC FILL 4.35 (was 4.10) Supplier B buy manage supply
    5. Other operations in the group also buy chicken 4.15 4.90 / • Do the others buy the 3.95 / 5.45 / Supplier same chicken as me? Supplier C A 6.50 / • Who buys the best? 4.10 6.15 (How do you know?) You MK3432 • Do our current and potential suppliers 4 Fillet - Chicken 5.95 realise what and how much we purchase 4.15 as a group? 4.74 564436 3.85 Branch B1 Chicken Breast Fillet You 5433342 4.10 You 5.50 2 Chic Brst Branch B2 3.75 You 3.75 3 Supplier 6.10 / MP211 D 4.55 5.95 Chix Filet 3.15 5.10 4.35 3.15 buy manage supply
    6. Groups leverage their buying power with Marketboomer (the main thing about MB) With Marketboomer, you know: 3.85 Supplier 1.What and how much you buy, A 2.Who can supply it and at what price, 3.That you can automatically buy the best You 4 price 5.95 4.The cost of not buying at the best price Chicken Fillet : Skin Off (AW 190 -210g) {MBG 6088} 3.35 Branch B1 You You 4.10 2 Supplier B You Group volume: Branch 3 350 kilos B2 per week 3.35 buy manage supply
    7. Identify Opportunity for Savings Example of a pricing comparison report (Middle East) produced by Marketboomer for fresh produce buy manage supply
    8. 8.3 reasons NOT to implement Marketboomer 1) You already have the best prices 2) Prices can’t get any lower than what you are paying 3) The business case isn’t strong enough (related to the cost / effort) 4) Your business doesn’t need / want the money (savings) 5) Management are not capable of making the change (e.g. don’t have the authority, motivation, time, resources or energy) 6) Your staff will not let you (lack of support / capability or obstruction) 7) You (or your owners) are not prepared to pay for the service 8) You don’t have suitable Hardware or Internet access Specifically in relation to Best Buy: 1) There is a monopoly and no alternative to what you can purchase 2) Your suppliers don’t value your business (wouldn’t care if they lost it) 3) Your suppliers won’t let you (and you’re prepared to accept that) buy manage supply
    9. 1 reason why you SHOULD implement Marketboomer It will save you in excess of 10% on your historical spend if you use it right You will achieve this if: 1) You can define a clear specification for the products you purchase 2) There is a competitive pool of suitable suppliers available to you 3) Your spend volumes are significant enough to be of interest to potential suppliers 4) You are prepared to modify your processes and change your suppliers based on pricing competitiveness buy manage supply
    10. Implementing Marketboomer is like getting fit In the early stages: 1) It takes substantial effort and commitment (i.e. more work, not less) 2) You will have to make many changes to existing habits 3) It can be extremely uncomfortable, if not painful In the short term: 1. It won’t happen over night 2. There will be many reasons to give up, you have to stick with it Once you’re fit you’ll: 1. be more alert (to opportunities) and less tolerant of lazy behavior 2. be able to do more (in less time) than before 3. be better, faster and smarter than your competitors (and suppliers) buy manage supply
    11. Advanced Spend Analysis with Marketboomer Ask Answer Action What’s happening to my costs? No Basket Analysis Are you getting what you ordered? Are / should they be Report increasing/reducing? Is wastage too high? (mine, my group, Is revenue accounted for correctly? the market) YES Supplier Pricing Is there a report No Do suppliers know what you buy? competitive market Can suppliers quote easily & regularly? for my business? Price Movement Do your suppliers value your business? Report YES Opportunity Cost Report No Are your products over specified? Do I buy Are you selecting suppliers for the right competitively? Competitive reasons? Analysis Report buy manage supply
    12. Spend Analysis – Basket Analysis Report Question 1: What’s happening to my costs, are prices going up? buy manage supply
    13. Spend Analysis – Competitive Analysis Report Question 2: Is there a Competitive Market? buy manage supply
    14. Spend Analysis – Opportunity Cost Report Question 3: Do I buy competitively (what’s the cost if I don’t) ? buy manage supply
    15. How Marketboomer helps suppliers ‘Sell Better’ Example of a ‘Market Share Report’ generated by a supplier in Marketboomer 2. Review 3. Review prices competitiveness 1. Prioritise demand buy manage supply
    16. How does Marketboomer save you money? Marketboomer helps businesses capture & share spend information, then go after the savings. The key is collaboration and transparency! Best Buy Savings Other benefits (3-30%+) (??%) • Same product, • Same product, • Focus executive • Educate your same supplier multiple suppliers time on high staff & suppliers value • Same purpose, opportunities • Improve your multiple products sourcing Sole Supply Analysis & capabilities Savings (5-15%) Process Savings (5-70%+) Learn from Level the Get smart with Cultivate each other playing field Spend Analysis your market & improve & increase & improve Compliance competitiveness Processes Groups Independents buy manage supply
    17. Marketboomer Implementation – typically 10-20 days Typical timelines for property with up to 300 rooms and 4 F&B outlets ‘As Is’ Review – Comprehensive review of current processes, systems, documents and reports (1-3 days) The implementation team visit Purchasing, Receiving, Stores, Finance and Outlets to identify business requirements and opportunities for improvement Cataloguing and Data collection (5-10 days) Marketboomer experts catalogue all frequently purchased items and collect information needed to set the system up Go-live Training and Support (5-10 days) Training and support during go-live phase buy manage supply
    18. Quality is never an accident; it is always the result of high intention, sincere effort, intelligent direction and skillful execution; it represents the wise choice of many alternatives William A Foster Presented by: Declan Monahan, Managing Director, Marketboomer International Email: declan.monahan@marketboomer.com buy manage supply
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