Charles' 2005 Purchasing Predictions

PurchTips - Edition # 67 January 25, 2005

By Charles Dominick, C.P.M., SPSM

Where Will The New Year Take Supply Management?

At this time last year, I made some predictions for the purchasing field for 2004. Today, I'll review last year's predictions and offer a couple of new ones for 2005.

2004 Prediction #1: Buying With Wireless Handhelds Will Become A Hot Topic. In late 2004, readers of purchasing magazines started seeing MSC Industrial Supply Co. advertising a handheld device that "will revolutionize your purchasing process."

2004 Prediction #2: The Reverse Auction Industry Will Be Shaken Up. Days after this prediction, Ariba announced its purchase of auction pioneer FreeMarkets.

2004 Prediction #3: Purchasing Will Play A Role In A Big Acquisition Or Two. In March 2004, Fisher Scientific announced its acquisition of vendor Apogent.

Now for this year's predictions...

2005 Prediction #1: RSS Technology Will Revolutionize Supplier Interaction. RSS, or Really Simple Syndication, involves automatically feeding software on your computer with real-time data from various Web sources, notifying you of updates. Imagine viewing on one screen live delivery information from various suppliers. RSS, just now beginning to be used in non-purchasing applications, is practically unheard of in supply management. It will be huge by late 2005.

2005 Prediction #2: The Buzz Over Bid Optimization Technology Will Subside. In a complex bidding situation, bid optimization software allows you to easily consider different scenarios to arrive at the best, lowest cost decisions. It helps you select the right number of suppliers, the right suppliers, the best logistics, and so on. It's very cool. But many reverse auction providers never made a profit despite an easy to explain concept and an obvious return on investment. A technology that is arguably too sophisticated for most purchases and tough to understand will be even harder to sell.

We'll revisit my predictions soon. Have a great 2005!

Charles Dominick, C.P.M., SPSM
President, Next Level Purchasing, Inc.

Spotlight On Professional Development Opportunities

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Francis J. DiMotta Jr., SPSM
Inventory Control Manager
Coram, New York

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www.NextLevelPurchasing.com

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