SYSTEMATIC CAPACITY CHECKS

Systematic capacity checks: 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, regularly monitoring the available capacity by suppliers, defining the reason for bottlenecks and, if there is not enough output, reacting accordingly to expand capacity.

It is obvious that the main goal of the systematic approach is to assure our demands, but another very important goal is to give the purchasing department time to take this opportunity to optimize the conditions.

If enough time is given to react properly this is a very good opportunity to use these additional demands as an argument to improve prices of current suppliers, or to improve the supplier portfolio by implementing new suppliers.

But if the shortage is discovered 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 paying more than before.

Implement a systematic capacity check and take the opportunity to improve your prices!