PurchTips - Edition # 216


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More Sole Source Procurement Solutions

By Charles Dominick, SPSM, SPSM2, SPSM3

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...

  1. 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.
  2. 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.
  3. 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.

Do You Want a More Rewarding Procurement Career?

Are you tired of not getting enough opportunities, respect, and money out of your procurement career? Well, guess what? Nothing will change unless you take action towards becoming a world-class procurement professional.

Earning your SPSM® Certification is the action to take if you want to bring the most modern procurement practices into your organization and achieve your career potential. Download the SPSM Certification Guide today to learn how to get started on your journey to a more rewarding procurement career!


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Are You Getting The Most Out of Your NLPA Membership?

Members of the NLPA get more than just articles like this by email. As a member, you also get access to:

  • The Procurement Training & Certification Starter Kit
  • The latest Purchasing & Supply Management Salaries Report
  • Leading-Edge Supply Management™ magazine
  • Members-only webinars 10x per year
  • And more!

If you haven't been taking advantage of these benefits, why not log in and start now?