BuyTrain News

December 2006

Education
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Education

Is That a Reputable Supplier?

The US Government maintain a list of people and companies with whom it will not contract or purchase.  It's maintained by the General Service Administration and it's called the "Excluded Parties List" [EPLS for you acronym lovers]. Companies and people get added to the list when one or more government agencies has a serious business problem with the listed party. Could be anything as simple as defaulting on a contract through something more complex like bid fraud or an environmental violation. Regardless, the government for whatever reason, has decided not to award new contracts to that party.

The EPLS is posted on the GSA web site and available for use by anyone. www.epls.gov/  You can search the EPLS to find a specific company and see why the government has 'debarred' them [The list used to be called the debarred contractor list]. Those of us who are government contractors are required to refer to the EPLS before placing new awards. The rest of you in private industry are not required to refer to the list.... and that brings me to my point.

One of the hardest tasks we perform in selecting contractors is making sure the contractor is responsible and reputable. Performing this 'due diligence' review is the responsibility of all purchasers regardless of industry. Selecting a new contractor who can and will, responsibly perform the contract before award can take all of our research skills and maybe even a consultant. [ read more…..] . So if a government resource is available that might help, why not make use of it as well. You may not want to depend on it 100%, but the EPLS could sure form the basis for an interesting preaward discussion with your offeror.

I can imagine the conversation something like this…." I appreciate your offer to supply us thingies - it looks like a good price. But since we have never done business together before I'd like to know a little more about your company. Can you explain why you are on the government's EPLS and tell me why that will not affect our proposed contract?..."

 

Do I get  discount?

Do you evaluate and take advantage of prompt payment discounts when making purchases? These small incentive offered by suppliers to pay invoices in short periods of time can add up. The net effect is to transfer the cash flow problem that suppliers have (because they have to invest money to make the product before collecting payment from the buyer). By convincing the buyer to pay a little bit early, suppliers can realize a significant cash flow improvement. Of course, this can also negatively affect a buyer's cash flow position.  The decision to offer or take a payment discount is best made with the full involvement of your financial organization. But it's not always an obvious answer and can take some calculation. Here is a true example.

I received a proposal for a fairly valuable fabrication contract with payment terms of net 30. Our company already had the money available and I knew our accounts payable manager could make payments in 10-15 days or less. I asked the salesman if he wanted to offer a discount for early payment. After talking with his accountant he changed the proposal to 2%-15, net 30.  His accountant had confirmed that it was worth it to him even if he made a little less on the deal. Since the early payment didn't impact our company as much, I was able to take advantage of the savings.

My point is that early payment discounts are worth asking for and, considering as part of the contract. There are many types of payment terms that can b offered and evaluating them can be an interesting accounting problem. All buyers should be aware of the potential impact so we can ask the right questions and make cost-effective decisions. Here are two resources I found on line that help explain some types of payment terms and how the cost impact can be calculated:

Discount offers and calculations… including a table showing annual effective rates...
http://www.dod.mil/comptroller/fmr/10/10arch/10_02f.pdf

Accounting reference manual University of Calif.  Pages 2 & 3
http://www.ucop.edu/ucophome/policies/acctman/d-371-23.pdf

 

Personal Development

Are You Ready to Take the C.P.M. Exam?

 You only have a few years left to do so before the exam is discontinued in favor of the CPSM certification. (last day to take the C.P.M. exam is 12/31/2009) I applaud your plan and highly recommend it. Bridging to the new certification will be available so you can always move forward later – but you’ll never be able to go back.

If you are just getting started, here  is a new article with a few suggestions:

 What the heck are you trying to say?

It doesn't do any good to write contracts and business letters if no one can understand what you are trying to say. Here is a new article suggesting that you skip the fancy prose and stick with plain English. Just Plain English.  Here is a much older article with some more suggestions: Write To Me!

ISM News

Did You Know?

Did you know that you can find a list of Supply Management periodicals on the ISM web site? http://www.ism.ws/tools/content.cfm?ItemNumber=8632&navItemNumber=13233  It lists nearly 20 periodicals and journals which you can add to your professional resource list. Looking for a great gift for affiliate volunteers, give them a subscription to a professional periodical-  a gift that keeps on giving….

 

Need a simple flow chart that explains how price analysis is a factor in making awards? ISM has a nice flow chart posted in the Members Only Tool Kit section of the ISM web site. http://www.ism.ws/tools/content.cfm?ItemNumber=8656  While your specific process might be different, this chart would be a good training tool for new buyers, field personnel and management. Use it to explain the typical thought process and rational used in price evaluation. I would use some of the terminology as jumping off points for further training and discussion with everyone involved.  Examples: Can the lowest offered price be unreasonable? Can a responsive offeror have an unreasonable price? Under what circumstances would we not want to take the lowest priced offered?

 

Software Tips

Several people have asked me about upgrading at home to windows Vista and/or Internet Explorer 7.

My opinions:

1- Internet Explorer 7 is still being fine tuned. I plan to wait a while longer before upgrading. I know some people have done so without a problem, and I know some people who have had problems..... I'd rather wait until solutions to the problems start showing up on the help sites before making the switch. Might be a good Christmas present to myself.

2- Windows Vista.  I definitely will not be upgrading from XP until I buy a new computer and it already has Vista installed. It's supposed to be O.K. and I've heard the upgrade from XP works O.K. - but there are plenty of  hardware compatibility issues that I don't want to experience first hand.  Better to let a computer manufacturer give me a machine with the issues already resolved. 

My general preference is to run the same software at home as I use at the office - so what I learn how to do in one place, works in the other. So, if at work, we switch to Windows Vista I might be more inclined to experiment with upgrading at home… but not until then.

As you are probably already aware, my general approach to PC software is cautious. I've made the mistake of jumping in to the fancy new product - only to spend hours trying to fix problems.  I've also spent hours trying to help friends who just had to try our something new and got in over their head. If your computer isn't working as well as you'd like now, adding yet more complex software to it, will seldom help.

P.S. just in case you don't realize how complex computer software has gotten, I have a copy of one of the most advanced software packages of it's time in my office. At the time it was considered "export controlled" and cost $600. The software was huge - it came loaded on 6 floppy disks (5-1/4") floppies. Huge by comparison back in those days….. Today, it doesn't even rate a drop in the bucket. Copies sell on Ebay for $40 and the whole thing has less code and takes up much less space than the software I use to play music files.  Why I even remember back in the old days when we used to have to crank computers by hand…… and use slide rules instead of excel…..  but that's a whole 'nuther story, or two.

 

Outlook Tip

This is the time of year when we all seem to get bunches of junk email messages If you just click the delete button, the message sits around in your deleted items folder taking up space until you purge the deleted items folder. Remember also that the network has a backup deleted item folder where the trash email sits around for a few more days. A better way to address junk mail of all kinds is to hold down the shift key when you click the delete button. This immediately and permanently dumps the item.

A cookie by any other name…….

A cookie is a small file saved on a user’s computer which stores data being used by a specific web site. Most cookies are innocuous, storing your Google search preferences for example. Thus each time you visit Google, the web site finds the cookie and recognizes your settings. This is usually a good thing. Some cookies store too much information and should be deleted – but it’s not usually a big problem. You can view the cookies stored on your computer by Internet explorer. Open the Tools Menu > Internet Options > on the General tab look for Temporary Internet Files, open the Setting Button and select View Files.

Cookies are small files and unless you have thousands of them, they don’t take up much space. Nor do cookies “bog down the system”. Just like a pile of old magazines in the corner, most cookies don’t do anything – they just sit there.

Should some cookies be deleted, yes – but I’d suggest you leave the cleanup to a program you can trust. I like Karen Kenworthy’s cookie utility (and just about everything else she does) www.karenware.com  or there are other spyware programs that will do some cleanup work. For great references on cookies take a look at the information on my favorite technical support site, Fred Langa’s www.langa.com 

Here is a simple description of cookies. Think of cookies like you would a name badge at a conference. People attending the conference (an internet web site) get a name badge (a cookie). The name badge identifies the individual and includes information the individual chooses to share with other people at the conference. It could also be marked with your special food preference for meals, etc. The every time you visit conference event, you will be recognized and your preferences known. Is it convenient - yes. Can you live without it – sure. If you choose to throw it away, it means you’ll just have to re-register each time you attend a conference event. Would I let a conference put my social security number on the name badge – no. The conference can only put information on the badge that I give to them in the first place.

Do I wear a name badge at conferences – mostly. Sometimes in trade shows I’d rather no one know who I am, so I toss the badge. Do I allow web sites to store cookies on my computer – mostly. In Internet explorer you can set a safe cookie level. Change your privacy settings to change what cookies can be stored and which ones will be prevented. Tools> Internet Options > Privacy.

What the heck is NTFS?

If you have upgraded windows operating systems in the past few years you have probably been asked if you want to use the FAT, FAT32 or NTFS file system. Unless you have nothing else to do at night but read technical bulletins, you probably don’t know and don’t care what the difference is. But, just in case you lie awake at nights wondering if you made the right choice, here is a simplistic explanation.

FAT (File Allocation Table) and its successor FAT32 are the older filing systems that preceded the newer NTFS (New Technology File System). All three are methods for storing and finding files on a hard drive. That is, Windows needs a way to be able to find any one of the thousands of programs, pictures, music and game files crammed onto your hard drive.

Think of your files like books in a book store. If it’s just a small bookstore, storing all of the books on shelves alphabetically by author works just fine. (FAT). If it’s a larger bookstore, a better system is need so we don’t have to keep rearranging books to make them fit on the shelves. So larger books stores find it more efficient to sort books by category and then by author’s last name. (FAT32).

In a very large facility, such as the New York Public Library, the only way efficiently store and retrieve anything is to have a whole different kind of storage system – like the Dewey Decimal System. (NTFS).

In all three examples, the same books could be stored in three different ways. If you are storing thousands of books trying to keep them all alphabetized would be very time consuming and make it difficult to find anything. And so it is with larger hard drives and thousands of files. So a new technology was developed (NTFS) to manage the storing and retrieving of files.

With smaller hard drives, the old system of FAT32 works fine and can even be a little faster. But, with larger hard drives, choose the NTFS system. NTFS also has some security benefits if you are really paranoid.

This example also helps us understand what defragmenting a hard drive does and why it’s necessary. Under the FAT file systems, when I add and remove files they can get placed out of order and scattered to any available empty space. This can cause the system to take longer when storing or retrieving files. Defragmenting, is just giving the system a chance to organize and straighten out the files. This isn’t as big an issue with large hard drives using the NTFS system. Since NTFS stores files based on an index, there is not as much need to defragment.

We made the same type of storage decision years ago when we decided to switch our inventory to a random storage method.

Find more Geek Speak explained here..

Combine Excel Charts?

O.K. so this may not be new to you - but it was new to me. 
Thanks to Mike W.  ( you know who you are)  for asking the question.

Yes, you can combine multiple chart types into one excel chart. Create the chart in Excel, then select just one of the data series from within the chart. Right click and change the Chart type - changing just that one data series. So you can have a stacked bar chart with one data series shown as a line chart across the other items. Now that you know it can be done, I'll bet it's easy to figure out. Here are some other great resources for excel charts - well worth the read.  

http://www.computorcompanion.com/LPMArticle.asp?ID=211

http://peltiertech.com/Excel/Charts/ComboCharts.html

http://www.oreilly.com/catalog/excel2000ian/chapter/ch10.html

Hotlinks 

Provide Feedback and suggestions for future newsletters at any time. I'll try and use what I can.

I really do appreciate those of you who take the time to write and comment on this newsletter!  

TTFN, 

Mt


MLTWEB is assembled and maintained by Michael L. Taylor, C.P.M. 
Materials and articles prepared by Mike may be shared for purchasing education provided that this source is cited and no fee is charged. The rights for any other use are withheld.
Copyright;  Michael L. Taylor, C.P.M.
Last Updated: 05/23/2006