PurchTips - Edition # 92

 

This is the Web-based version of this article. Click here for the printer-friendly version.
* More Purchasing Articles

Picture of Charles Dominick, SPSM, SPSM2, SPSM3

Supply Base Rationalization: Not 1, But 5 Options

By Charles Dominick, SPSM, SPSM2, SPSM3

Is Your Supply Base The Right Size?

Rationalizing the supply base means utilizing both the right number of suppliers and the right suppliers. This requires you to categorize your spend and identify current and potential suppliers for each category.

After identifying your categories and suppliers, you have five options for the supply base in each category:

Reduce It – Many think of this as the only rationalization option, but it?s not. This option works best when you already have enough qualified suppliers and are sure that no others can offer a cost, quality, or other advantage. You just consolidate spend with a subset of currently-used suppliers. But don?t assume that you?re already using the best suppliers. With global sourcing, buyers can find top vendors across the planet.

Increase It – Despite common teachings, fewer suppliers isn?t always better. By blindly following the supplier reduction trend, you might award business in one category to a supplier who performs well in another category. This strategy is flawed when the supplier is not as competent in the second category. In many cases, it is better to have two suppliers who can deliver great performance in two categories than one supplier who performs well in one category but poorly in the other. When analyzing your categorized spend, find suppliers who appear across categories. Ask if they are truly the best choice in each category and what the measurable advantages are to using them across categories.

Maintain It – If you've done a good job, there is no need to change. Period.

Keep The Size, Change The Mix – Many organizations set ?number-of-suppliers goals? and measure success simply by the numbers. But the quality of suppliers is more important than the quantity of suppliers. Even if you have the right number of suppliers, you may need to replace the poor performers with good ones.

Expand Then Reduce – Sometimes, you are under pressure to reduce the supply base. But the suppliers you are currently using are so inadequate that you just can?t imagine depending more heavily on any of them. So, you may have to introduce more suppliers to identify the best ones in the market before you start ousting the poor performers. But you also need to make sure you?re not trading one problem for another. New suppliers must prove themselves, so you add them to the list to allow more choice for a future supplier reduction. There is nothing wrong with this plan. Just communicate it as a two-step approach to good supply base rationalization.

(keep reading for a FREE Offer)

Spotlight On Professional Development Opportunities

SPSM Certification

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.

Is lacking a purchasing certification keeping you from getting the results, opportunities, respect, and money that you want out of your career? Today's employers refuse to reward employees for yesterday's skills. They want you to save more money, achieve better operational performance, and reduce risk. They demand that purchasing professionals like you achieve unprecedented results and without the most modern skills that can be a challenging feat!

So how can you acquire the most modern skills, achieve meaningful results, and convincingly prove your capabilities to today's employers? There is an impressive purchasing certification program that will teach you what you need to accomplish all of this and more. It is the SPSM® Certification, earned by completing the Senior Professional in Supply Management® Program. And you could earn it in less than a year - maybe even much less than a year!

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 iPad) (with the option of getting a Study Guide on an iPad) at:

Distinguishing yourself as an achiever in purchasing is key to sustaining a rewarding career, even in these difficult economic times. Earning your SPSM® Certification by completing the Senior Professional in Supply Management® Program is 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 iPad) at:

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. And if you sign up for the Senior Professional in Supply Management® Program on or before May 31, 2008, SPSMSM Certification Program on or before 4/30/2007, you also get these and other bonuses valued at over $700:

  • FREE $30 gift certificate to Amazon.com!
  • FREE CD-ROM with printer-friendly versions of the class materials!
  • FREE Purchasing Performance Measurement spreadsheet template!
  • FREE audio CD about purchasing job security!

To learn how to earn your SPSM® Certification and get these valuable bonuses, visit:

Earning your Senior Professional in Supply Management® (SPSM) Certification is the action to takeif you want to bring the most modern purchasing practices into your organization and achieve your career potential. Learn how to earn your SPSMSM Certification at:

Learn how to earn your SPSM® Certification at:

www.NextLevelPurchasing.com/spsm.html

The Latest Purchasing News!

FREE Offer!

Read the report "Career Survival In Supply Management" and learn how to beat downsizing.

To get your FREE copy of

"Career Survival In Supply Management,"

follow the instructions at
www.NextLevelPurchasing.com/purchasing-report.html.


Free Procurement Training & Certification Starter Kit

This Starter Kit gives procurement professionals like you a clear idea on what it will take to become certified. You'll get an excellent feel for what you will need to learn and how long it will take.

Click here to learn more

Included in your free Starter Kit:

  • Access to two lessons from courses that are part of the Senior Professional in Supply Management® Program
  • A Certification & Training Planning Template
  • Case studies
  • A free Basic Membership in the NLPA

Together, these materials will help you decide how well the SPSM® Certification can help you achieve your career goals.

So, what are you waiting for? Begin your pursuit of a more rewarding procurement career – get your Procurement Training & Certification Starter Kit now by signing up for a free NLPA Basic Membership!

If you are already a member of the NLPA, click here to login and visit the "Starter Kit" tab to access these resources.