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Tianjin Port.jpgLast month the Port of Tianjin, the third largest port in China, was destroyed in a series of deadly explosions fueled by hazardous and flammable chemicals stored in a warehouse there. Tianjin Dongjiang Port Ruihai International Logistics, which owns the warehouse, has a company culture that ignored regulations and used political connections to protect its operations from scrutiny. The explosions leveled an entire section of the city, caused 150 deaths and 700 injuries, displaced thousands of local residents, and left millions of people in fear of the toxic fallout that now surrounds them.


Chinese industrial accident rates are astronomically high, and not just in industries that deal with hazardous chemicals. The China Labor Bulletin has recorded more than 300 industrial accidents in the last seven months alone, with 750 deaths across the Chinese construction, manufacturing, and mining industries. In total, Chinese industrial accidents cause 70,000 fatalities each year.


This catastrophic cycle of industrial disasters is the direct result of a dysfunctional and corrupt government, and the residents of Tianjin remain angry at its poor handling of the disaster. China does have industrial safety regulations in place, but ineffective enforcement renders them useless. All too often, local governments are run by unprincipled profit-seekers who act like callous corporations, focused only on maximizing profits and neglecting environmental and human safety.


Widespread corruption makes matters worse. As the Tianjin explosions show, businesses can easily work around safety and environmental regulations by bribing officials. Two major shareholders in Tianjin Dongjiang Port Ruihai International Logistics were arrested, accused of using their family ties and political connections to gain approval for storing dangerous materials in their Tianjin warehouse—directly violating regulations that prohibit the storage of hazardous chemicals within 3,200 feet of residences.


Considering the impact this indefinite port closure will have on other Chinese ports, the destroyed local infrastructure, and the downstream effects on companies that lost their orders in the explosion, it’s no wonder Tianjin is causing even more North American companies to consider near-shoring. In fact, studies indicate that 48 percent of North American companies are likely to implement near-shoring, or producing goods closer to their customers, within the next one to three years.


Companies such as Plaid Enterprises, Inc. are leveraging tools like Ariba Discovery to help them in their near-shoring efforts. “Posting my buying needs on Ariba Discovery has been a huge success. I was able to discover a supplier that was right below my nose,” explains Leanne Melton, Strategic Supply Base Manager at the company. “Not only did I achieve huge savings and significantly improve quality, I can now market our products as “Made in America”—it’s a win all the way around.”


Check out the Plaid Enterprises case study to learn more, and be sure to read the first two parts in the “Supplier Risk Management Series”:



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Egg McMuffin.jpgMcDonald’s breakfast lovers, rejoice – all-day breakfast is coming soon to a restaurant near you! Whether you dream about Sausage, Egg & Cheese McGriddles, a Bacon, Egg & Cheese Biscuit, or an old-fashioned Egg McMuffin, the one ingredient these breakfast delicacies have in common is freshly cracked eggs. Rolling out an all-day breakfast menu across the United States is a gigantic feat on its own, but executing this feat during a national egg shortage – now that’s Big Breakfast with Hotcakes big.


The cause of the egg shortage is one of the worst bird flu outbreaks veterinarians have ever seen. Spread by the droppings of geese and ducks migrating over poultry farms in the Midwest, the highly contagious virus does not actually affect its carriers, but is deadly to chickens: an estimated 40 million egg-laying hens, one-eighth of the country's population, have already been euthanized.


There is concern that the extra demand generated by McDonald’s all-day breakfast will worsen the already bad egg shortage. According to the company, McDonald’s USA purchases about 2 billion eggs a year, a little more than 4 percent of the 43.6 billion eggs produced in the United States last year. Then last week McDonald’s said that over the next 10 years, it will transition to using only cage-free eggs. The move comes as a response to customers’ increased interest in food quality, but with less than 10 percent of the nation’s laying hens housed in cage-free “aviary systems,” meeting this goal will be a tall order.


So what kind of risk is McDonald’s facing? The company is in the unfortunate position of having to tackle the operational risk of the current egg shortage while simultaneously planning for the conversion to cage-free eggs. It also faces reputational risk if its breakfast initiative fails.Eggs.jpg


The best solution for McDonald’s may be a two-pronged approach. First, in the short term, the company needs to add new poultry farms to its supply base – especially those that are cage-free – so it can meet increased demand despite the shortage. While California poultry farms may not produce as many eggs as farms in the Midwest, their chickens have not been hit with the flu. And since legislation banning the use of small battery cages has been in effect since January, California farmers produce cage-free eggs already.


However, finding new suppliers can be expensive and difficult, taking up to 30 percent of the time in a company’s sourcing process. But leveraging tools like Ariba Discovery, which provides instant access to over 1.7 million suppliers worldwide, could help McDonald’s save 90 percent of the time and 75 percent of the cost to find and qualify new egg suppliers. In fact, there have already been multiple successful Ariba Discovery postings in this category, including $500K of eggs in Pennsylvania, $1M to $5M of egg products in North Carolina, and $100K of eggs in Washington.


Next, for a longer-term solution, McDonald’s should invest in its current egg farmers by educating them about and potentially financing their conversion to cage-free systems. The timing might actually be perfect for Midwest poultry farms to go cage-free, since many just had their flocks wiped out from the bird flu. And the practice of companies taking steps to secure the future of their supply chains is gaining prevalence. For example, two years ago, Chipotle began providing financial incentives to help farmers of black beans in Oregon and Washington transition from conventional to organic production. If McDonald’s followed the same approach, it would build its cage-free egg supply while protecting the viability of suppliers it depends on – farms vital to the success of the company’s new breakfast initiative.


Check out last week’s post for Part 1 of the “Supplier Risk Management” series to learn more, and stay tuned next week for Part 3.



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img-Paper-shortage-for-California-documents.jpgWant to hear a joke about paper? Never mind, it’s tearable!


All kidding aside, California is in a peculiar paper predicament. The state is scrambling to find a new paper supplier after Sekuworks, an Ohio company that produces highly specialized paper for vital records, closed without warning. California is legally required to print all vital statistic certificates using a unique type of printing known as "intaglio." With intaglio the design is etched into the printing plate—typically made from copper, zinc, aluminum, or coated paper—and the incised lines in the plate hold the ink. Although many feel that intaglio printing is old-fashioned and unnecessary, it offers an exceptional way to prevent counterfeits.


The closure of Sekuworks has forced several California counties to begin limiting residents to one copy of a birth, marriage, or death certificate. The restrictions are becoming a major nuisance for people who are trying to handle funeral arrangements, get a driver’s license, or enroll in schools.



So where did California go wrong? What could it have done differently? The first challenge the state should have addressed was the risk of supplier insolvency—a big issue that causes 68% of supply chain disruptions. As a buyer, understanding your suppliers’ ability to fulfill your requirements is essential to supporting business operations. This is especially crucial for tier 1 suppliers like Sekuworks, but it’s equally important to have visibility into your suppliers’ suppliers (tier 2), their suppliers (tier 3), and so on. California could have monitored the stability of Sekuworks by running regular credit reports on the company—a simple tactic that any buyer can use to verify suppliers’ business identity, identify potential fraud, assess payment habits, and determine likelihood of business failure.


The second mistake California made was relying on Sekuworks as its only source of supply. The biggest risk associated with this is exactly what happened: the company failed and shut down, leaving California high and dry. But depending on one supplier also gives that supplier all of the power in the business relationship. As Sean Baumgartner, Director of Purchasing at Caesars Entertainment, explains, “Our main goal is increasing our supplier base in categories where we only have a small number of suppliers. There’s nothing more valuable than a large, qualified supplier base.”


Caesars Entertainment uses Ariba Discovery to quickly find and qualify additional suppliers. The tool allows them to easily evaluate, compare, and respond to proposals by receiving responses in a single location, with the exact details needed. Sean adds, “Ariba Discovery is a quick and easy way to find and vet additional suppliers to meet our unique needs.” Strategies like this enable Caesars to avoid the predicament California now faces, giving the company a healthy depth of supply resources so it can stay up and running at all times.


Check out the Caesars Entertainment case study to learn more, and stay tuned for part 2 of the “Supplier Risk Management” series.



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fresh flowers.jpgThis week Ariba Discovery was full of attention-grabbing buyer postings. Computers and computer accessories seemed to be the most popular items of the week with posts for network and wireless network interface cards, computer docking stations, computer monitors, computer trackballs and keyboards, tablet computers, and more. In addition to these typical posts, there were also quite a few fascinating buying needs posted on Ariba Discovery. Read on to see this week’s top 10 most interesting posts. Be sure to check out last week’s list for even more amusing posts.




10. Fresh flowers – A company in Georgia is in search of a supplier of fresh cut flowers. The buyer is an online fundraising technology that enables nonprofit organizations to raise money selling products.  Their customers are typically athletic teams that fund raise all year long.  They are looking to create a Valentine’s Day fundraiser that would include fresh cut flowers that would sell well for this holiday. Flowers needed are: roses, lilies, tulips, carnations, and more.



9. Algae – The owner of an organic homeopathic store in Canada is looking for a supplier of organic algae or seaweed. The algae and seaweed should be high quality and organic.




8. Adult diapers – The owner of an online distributing company in Florida is searching for a supplier of adult diapers. The buyer is specifically looking for diapers in all sizes, styles, and major or generic brands in bulk amounts.




7. Hair pieces – The owner of a small business in Washington is in search of a supplier of hair pieces that attach to hats. These hair pieces are used for cancer patients. The buyer needs a wide variety of hair types like straight and curly, as well as all sizes, colors, and designs of hair pieces.




building cleaning services.jpg6. Building cleaning services – A company in Georgia is trying to find a supplier of building cleaning services for a large office building. This will be a long term contract for cleaning a large office every evening during the work week.




5. Bicycle gloves – A company in Indiana is seeking a supplier of bicycle gloves. The buyer is looking for both men’s and women’s bicycle gloves in all sizes and colors. The buyer is also only interested in working with a US based manufacturer.




4. Floating water pumps – A company in Utah is searching for a supplier of water pumps. The buyer is specifically looking for a 12 inch floater pump with at least a 50 horsepower motor. The pump needs to be mounted to a pontoon.




3. Fire sprinkler subcontractor – A large construction company in Kentucky is seeking a supplier of fire sprinkler instillation services. This subcontractor would be responsible for installing fire sprinklers in big box stores in the region during their remodels.




peanuts.jpg2. Bulk peanuts – The owner of a gourmet foods store in Texas is looking for a supplier of peanuts in bulk quantities. At this time, the buyer is looking to purchase 5 to 10 tons of Spanish or Virginia peanuts, a smaller variety. The buyer is also looking to purchase Ginger, Garlic, Pearl Millet, Grain Sorghum, Finger/Ragi Millet and Oats from a farmer one ton at a time. All items are to be shipped to a warehouse in Texas.




1. Application and smart toothbrush – The owner of a company in Ohio is trying to find a manufacturer of a smart toothbrush for children to go along with an Android application for children. The application encourages tooth brushing and the proper amount of time. Each time children brush their teeth for two minutes, twice a day; they will receive prizes and awards. It should be constructed like a game, one in which children look forward to playing twice a day. Instilling good oral habits they can take into adulthood. Additional information is attached within the Ariba Discovery post.




Are you interested in learning more about any of these buying needs? If so, simply click on the link embedded in each post description to review the public posting. If you are a supplier that can fulfill any of the requirements be sure to respond to the buyer right away. And remember, stay tuned next week for more of “Ariba Discovery’s Top 10 Interesting Posts of the Week” or visit Ariba Discovery now to find additional buyer postings.

aquarium.jpgThis week Ariba Discovery was full of attention-grabbing buyer postings. Art supplies seemed to be the popular items of the week with postings for charcoal pencils, canvas for painting, paint brushes, oil based paints, and more. In addition to these typical posts, there were also quite a few intriguing buying needs posted on Ariba Discovery. Read on to see this week’s top 10 most interesting posts. Be sure to check out last week’s list for even more amusing posts.



10. Aquariums – The owner of a fish tank maintenance company in New York is seeking a supplier of aquariums and fish tank supplies. The buyer is specifically looking for products like: additives, air pumps and air stones, algae control, aquariums stands and hoods, automatic top off systems, controllers and monitors, decorations, feeders and dosers, filter media, filters, fish food, freshwater plant care,  freshwater specific heaters and chillers, lighting, and more.



9. Meteorological services – A large British Airline is looking for a supplier of meteorological services. The specific services include: provision of a meteorologist presence in operations control center, monitoring meteorological situation in airline’s destinations, provision of additional and higher fidelity forecasting than the state-provided standard, provision of meteorological training, provision of meteorological expertise and consultancy as required, and more.



8. Electric scooters – The owner of a bike and ATV shop in Alabama is searching for a supplier of electric scooters. All makes, models, and styles are needed. In addition to the electric scooters, the buyer is also looking for dirt bikes and pocket bikes.




7. Marketing services – A recording artist in Alabama is trying to find a supplier of marketing services. This buyer is looking for a marketing specialist that has experience working with the music industry and can help with the promotion of both music and merchandise. The buyer also needs help getting market exposure outside of their geographical market.



hospital_inventory_management_software.jpg6. Hospital inventory management software – A large university hospital in Ohio is in search of a supplier of hospital inventory management software. Specifically, the buyer is looking to find potential vendors to discuss a Perpetual Inventory System for their Materials Team.  The buyer wants to find vendors who have a web-based, passive perpetual inventory system for our Procedural areas and Operative Suites which will allow them to gain real-time visibility to inventory.   It is their goal to use this technology to standardize products, reduce waste, increase product security, and improve accuracy for patient charging while minimizing impact to clinical workflow.



5. Lace – The owner of a baby boutique in Canada is seeking a supplier of lace used to make baby bloomers. The lace needed is: white soft cotton blend stretch double ruffle lace, 2 cm width to 2.5 cm width (3/4" width to a 1" width) 2,880 meters (or 3,120 yards); bright pink double ruffle stretch - nylon/poly soft type blend (or cotton), 1 cm width (1/2" width) 37 meters (40 yards); and white with Silver shiny metallic edge double ruffle stretch - nylon/poly soft type blend (or cotton), 2 cm width to 2.5 cm width  (3/4" width to a 1" width)  37 meters (40 yards).



4. Vanilla – The owner of a candy and dessert company in Maryland is looking for a supplier of vanilla. The buyer is looking to purchase a bulk order of 2,200+ pounds of vanilla to be shipped to Maryland.



3. Meal replacement shakes – The owner of a health and beauty business in California is in search of a supplier of meal replacement shakes. All brands, styles, and flavors of these drinks are needed.



cake decorating.jpg2. Cake decorating supplies – The owner of a cake shop in Wisconsin is trying to find a supplier of cake decorating materials. The buyer is specifically looking for cake decorating supplies such as decorating tips, rolling pins, cake trimmers, stands, dividers, cake topper decorations, and more.



1. Natural dog treats – The owner of a domestic distribution company in Kentucky is searching for a supplier of natural, preservative free dog treats. The buyer would like to have the following characteristics in their dog treats: ingredients are simple, no additives, no nitrites, no garlic powder, organic chicken option if possible, and won’t leave a funky smell on hands.



Are you interested in learning more about any of these buying needs? If so, simply click on the link embedded in each post description to review the public posting. If you are a supplier that can fulfill any of the requirements be sure to respond to the buyer right away. And remember, stay tuned next week for more of “Ariba Discovery’s Top 10 Interesting Posts of the Week” or visit Ariba Discovery now to find additional buyer postings.



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