More Sole Source Procurement Solutions
PurchTips - Edition # 216 November 2, 2010
By Charles Dominick, SPSM
How Do You Change A Sole Source Situation?
Sole source situations - where there is only one capable supplier available - are arguably the most challenging circumstances that procurement professionals have to deal with. With no threat of competition, sole source suppliers are often inflexible in terms of keeping prices reasonable, agreeing to performance guarantees, or cooperating with other procurement initiatives. Here are three ideas for dealing with sole source situations…
- Help top management hate sole source situations as much as you do. Top management needs to view sole source situations not just as nuisances to you, but as serious organizational problems. Educate them through examples of problems caused and by creating, charting, and sharing two cost indexes: one that tracks cost changes in your highest spend sole source items and a second one that tracks cost changes in your highest spend non-sole source items. If management sees evidence that costs increase much more sharply for sole source items, they will help you accomplish ideas 2 & 3 below. For more details on creating these cost indexes, see my blog at http://tinyurl.com/29kjyd5.
- Eliminate the cause. Many sole source situations arise because a product was designed around one supplier's unique capabilities. A redesign that eliminates reliance on a sole source could be the cure. This is a resource-intensive initiative, so the benefit has to outweigh the cost.
- Codify a requirement for early procurement involvement. Once top management is on your side, push for them to authorize an organizational policy requiring that the procurement department be involved in product design before the supply base is engaged or suppliers are decided upon to prevent future sole source situations.
(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
- Are you struggling to develop a plan for improving your team's performance? If so, visit: www.NextLevelPurchasing.com/benchmark
- Find Next Level Purchasing on Facebook! "Like" our Facebook page to get quick access to our latest articles, blog posts, and occasional discounts. Visit www.facebook.com/NextLevelPurchasing
- Considering a career move? Browse jobs preferring candidates with the SPSM® Certification at: www.NextLevelPurchasing.com/jobs
There are four irreversible business and technology trends that are likely to cost purchasers like you their jobs in the next 12 months. Do you know what they are? Do you know how to protect yourself from their effects? If not, you should get your FREE report entitled "Career Survival In Supply Management."
"Career Survival In Supply Management" gives you a seven-step process to stay in the game!
"Career Survival In Supply Management,"follow the instructions at
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.