CREATING COMPETITION
What do you understand «Creating competition» to mean?
Some purchasers believe that the more suppliers they are able to get the company through a sourcing process, the more competition they are creating.
Maybe on a basic level that can work, but I do not agree with sourcing relative complex industrial components. And the reason why is related to transparency and specialization through optimizing processes and prices.
The more cost transparency we have, the more opportunity we have to analyse and define the optimum process for each component, calculating the optimum price.
At same time, this transparency gives us the chance to collaborate with suppliers in the medium/long term to optimize the processes, knowledge and even company structure, in order to achieve the desired quality and price level.
Because a company cannot be the best at everything, in this way we are creating a specialist for specific components, more competitive than ever before, but at the same time reducing the range of competitive suppliers. In some cases, reducing it so much that there are no longer alternatives.
Therefore, I think that a proper Material Group Strategy is crucial to create real competition, developing enough competitive suppliers and creating an environment that keeps them “motivated” to offer their best.
How can you optimize prices creating real competition with a proper Material Group Strategy? Exceptional professionals with deep knowledge about the market, expertise on supplier management, a strategic mind set and properly trained abilities in cost analysis.
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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