Rule #1 of Tactical Procurement

PurchTips - Edition # 193 December 15, 2009

By Charles Dominick, SPSM

What Should Be The Focus In Tactical Procurement?

Unlike strategic procurement which has a long-term focus, tactical procurement deals with the administration of procurement transactions, including the occasional "one-time buys." Now, just because a procurement is a one-time buy doesn't mean that it can be handled by anyone. A buyer still needs to know some fundamentals of procurement for this tactical purchase, which brings me to "Rule #1 of Tactical Procurement."

My Rule #1 of Tactical Procurement is this: "The buyer must first identify the product, service, and/or supplier with an acceptable probability of being satisfactory in all aspects of the transaction and then achieve the lowest cost for that product or service or with that supplier."

What does this mean?

It means that the buyer is to first assess:

• Whether the product or service is the right one for the purpose intended
• The likelihood of the product being delivered, or the service being performed, in the desired time-frame
• The likelihood of the product or service meeting or exceeding quality expectations
• The likelihood of the supplier being able to provide the type of support anticipated when things go well or if things go wrong

Only after this assessment is done should the buyer consider cost in the decision. If multiple suppliers have an equally high probability of providing a satisfactory experience, then cost can be a differentiator or even THE differentiator.

"Cost" can simply mean price or can mean a carefully calculated total cost of ownership. Which type of cost you use depends on the value and the complexity of the purchase. But both are factored into the decision only after the probability of satisfaction is determined.

This rule means forces you to focus on a satisfactory experience first, cost second. You never want to select a supplier that provides an unsatisfactory experience just because they offered the lower price.

(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:

www.NextLevelPurchasing.com

The Latest Purchasing News

• Purchasing Managers/Directors: Are you struggling to develop a plan for improving your team's performance? If so, visit: www.NextLevelPurchasing.com/benchmark
• Discuss today's topic on our LinkedIn SPSM Group! Visit www.tinyurl.com/7lmbzy
• Not a member of the LinkedIn SPSM Group? Learn how to join at: www.tinyurl.com/8tgfnd
• Considering a career move?   Browse jobs preferring candidates with the SPSM^® Certification at:  
  www.NextLevelPurchasing.com/jobs  

FREE Offer!

How can you test your purchasing knowledge and have a little fun, too? Try our FREE "Million Dollar Savings Game" which is one version of many different games we've added to each of our online classes.

Copyright 2009. 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.