Tuesday, May 31, 2011

How Many Of These Six Mistakes Have You Made?

  1. Assuming that a small order doesn't warrant much time. A purchase doesn't have to involve a large monetary expenditure to represent a big risk to the organization if it isn't fulfilled at the right time with the right quality item or service. There can be safety implications involved with small orders, or costly disposal that will be needed when the item is used up, and these should not be overlooked.
  2. Assuming that supplier offerings are equal except for price. Suppliers try to differentiate their products or services. Seek to understand those differences, what value those differences have to your organization, and which offering is the best overall fit.  Price is only one consideration.
  3. Failing to allow suppliers to suggest alternatives. Suppliers often know a better or cheaper way to accomplish your goals. Not giving them the chance to suggest other options may result in forgoing cost or service improvement opportunities.
  4. Failing to build stakeholder consensus in purchasing decisions.  Compliance of the stakeholders in your organization is a big determinant in whether supplier onboarding is smooth, estimated cost savings are achieved, or volume guarantees are met. If stakeholders are given a real voice in the purchasing decision, the likelihood of compliance - and purchasing department success - is much higher.
  5. Failing to qualify a new supplier. You should select a supplier because that supplier is the best fit for your organization, not because the supplier was the best proposal writer or has a long standing positive relationship with your organization. Always qualify new suppliers in a way that is appropriate for the value and criticality of the purchase. This may even mean trying out a supplier before making along-term commitment.
  6. Agreeing to things that the organization can't support. When purchasing agents focus solely on price, they may be tempted to do anything to achieve savings. But being able to trade concessions for lower prices means knowing your organization's limits. For example, don't agree to pay a supplier in 10 days or via EFT if you haven't confirmed that your organization can actually do these things.
Adapted from: Do You Make These Purchasing Mistakes?, http://bit.ly/9SJik5

No comments:

Post a Comment