THE SUPPLIERS MUST ALWAYS…
As a strategic purchaser, never forget the six principles that suppliers must always adhere to:
THE RIGHT QUALITY
This does not mean the best quality in the market, but the correct quality to fulfill customer specifications.
THE RIGHT QUANTITY
Demands must be assured by available production equipment, raw materials, financial resources, and manpower.
THE RIGHT TIMING
Demands must be delivered on time, not later but not sooner. By sourcing new projects with clear deadlines, KO criteria if timeline cannot be fulfilled.
THE RIGHT PLACE
Sourcing decisions must always be based on TCO, including logistic cost and risk.
THE RIGHT SOURCE
A supplier capable of and committed to maintaining agreed conditions. The key point is trustability, which difficult to build and easy to lose.
THE RIGHT PRICE
A supplier must be competitive, offering the best prices according to market conditions.
Accordingly, we accept that prices are not relevant if the supplier does not adhere to the other five points. The supplier does not generate additional competition and market conditions do not improve.
Therefore, to optimize the right prices in a market we have to improve the market conditions with a proper Material Group Strategy, developing the right sources and creating real competition between those sources in advance.
What is needed for that? Exceptional professionals with deep knowledge about the market, expertise on supplier management, a strategic mind set and advanced cost analysis skills.
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.
Comments are closed.