A SYSTEMATIC CAPACITY CHECK
A systematic capacity check: the best opportunity to optimize commercial conditions.
Purchasing is responsible for having enough installed capacity to cover upcoming demands without shortages.
The implementation of a systematic capacity check is highly recommended to assure this goal, monitoring regularly the available capacity by suppliers, defining the reason for bottlenecks and, if not enough outputs, reacting accordingly to expand the capacity.
It is obvious that the main goal of the systematic approach is to assure our demands are met, but another very important goal is to give Purchasing time to take this opportunity to optimize conditions.
If there is enough time to react properly this is a very good opportunity to use these additional demands as arguments to attain better prices from current suppliers, or to improve our supplier portfolio by implementing new suppliers.
But if the shortage is found out too late without enough time for a proper reaction, we will end up asking the current supplier to expand the current capacity, without any leverage in the discussion and probably pay more than before.
Implement a systematic capacity check and take the opportunity to improve your prices!
If you are interested in investing in an exceptional team and increasing your company’s profitability, we encourage you to consider our next training focused on improving strategic purchasing skills. Additionally, please feel free to contact us for more information.
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