Do You Make These Purchasing Mistakes?
PurchTips - Edition # 206
By Charles Dominick, SPSM
How Many Of These Six Mistakes Have You Made?
- 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. So, evaluate the criticality of each order and invest an appropriate amount of time based on the degree of criticality.
- Assuming that supplier offerings are equal except for price. Most suppliers strive to differentiate their products or services. You should seek to understand those differences, what value those differences have to your organization, and which offering is the best overall fit for your organization, price and other factors considered.
- Failing to allow suppliers to suggest alternatives. Suppliers may know a better or cheaper way to accomplish your goals. Restricting them to your requirements without giving them the chance to suggest other options may result in forgoing profit improvement opportunities.
- Failing to build stakeholder consensus in purchasing decisions. A big determinant in things like whether supplier onboarding is smooth, estimated cost savings are achieved, or volume guarantees are met is the compliance of stakeholders in your organization. If you give them a voice in the purchasing decision, the likelihood of compliance - and purchasing department success - is much higher.
- 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. Always qualify new suppliers in a way that is appropriate for the value and criticality of the purchase. This may even mean "dating the supplier before marrying the supplier."
- Agreeing to things that the organization can't support. When purchasing agents focus solely on price, there may be temptation 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 those things.
(keep reading for a FREE Offer)
Spotlight On Professional Development Opportunities
Are you tired of not getting enough opportunities, respect, and money out of your purchasing career? Well, guess what? Nothing will change unless you take action towards becoming a world-class purchasing professional.
You see, today's employers refuse to reward employees for yesterday's skills. They demand that purchasing professionals like you use the most modern skills and achieve unprecedented results. They want you to save more money, achieve better operational performance, and reduce risk.
Earning your SPSM® Certification by completing the Senior Professional in Supply Management® Program is the action to take if you want to bring the most modern purchasing practices into your organization and achieve your career potential. Learn how to earn your SPSM® Certification (and perhaps get an iPod) at:
The Latest Purchasing News
- Purchasing Managers/Directors: Do you want to improve the skills of a team of four or more? Next Level Purchasing offers discounts and other great benefits to large groups. Learn about these benefits at: www.NextLevelPurchasing.com/team
- Considering a career move? Browse jobs preferring candidates with the SPSM® Certification at:
Procurement training pays for itself many times over. How do you measure the impact of training? Our new whitepaper, "Measuring The Impact of Procurement Training," offers three common measurement methods.
"Measuring The Impact of Procurement Training,"
Visit http://www.NextLevelPurchasing.com/pti .
Copyright 2010. This article is the property of Next Level Purchasing and may not be copied or republished in any form without the express written consent of Next Level Purchasing. Click here to request republishing permission.