Archive for January, 2008

Back To The Dual vs. Single Source Question

Back in September, I wrote the PurchTips article “Dual Source vs. Single Source” to make some suggestions to help determine whether dual sourcing or single sourcing was a better alternative for a contract. Specifically, I wrote: “Upon bid receipt, compute the cost of doing business with the two qualified suppliers who bid the lowest for the 70% and 30% chunks…

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A Supply Chain Guy’s $6 Million Idea

From what I’ve read, companies pay about $3 million for a 30-second commercial on the Super Bowl. I understand that they typically hire ad agencies to come up with the ideas for, and produce, the commercial itself. I believe that those ad agencies get paid a commission that is a percentage of the cost of the placement (e.g., 15% of…

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Cost Savings & Multi-Year Contracts

I hope that you have enjoyed the article “Calculating Cost Savings In Multiple Years.” Like many other cost savings topics, what I’ve shared is best practice among large companies but certain to be disputed by some in the purchasing and supply management space. So let me add these pieces of advice: 1. If you report cost savings differently than the…

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Hey DJ…Cue Kool & The Gang!

We cracked open the champagne here at Next Level Purchasing headquarters today. We are celebrating reaching a major revenue milestone since I founded the organization in 2000. I would like to sincerely thank all of our clients and students who have trusted us to help them improve their workplace results and purchasing careers and who have, in turn, helped us…

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A New Purchasing Blog Worth Your RSS Subscription

Reading the sector’s blogs like Spend Matters, Sourcing Innovation, Supply Excellence, and the eSourcing Forum are part of my everyday activities. However, beyond those, I’ve been pretty disappointed with the quality of new purchasing blogs that have popped up over the past year. Sometimes I have to chuckle that some of the newer bloggers think that CPO’s are actually out…

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Negotiation Semantics

A subscriber to PurchTips recently sent me the following message: “Normally we have been using a word ‘best’ for price negotiations with suppliers as in ‘Your price is too high, please quote your best price.’ and sometime ‘better.’ Kindly advise which is the suitable word for price negotiations, which as I understand that is ‘better.'” Actually, when you are leading…

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Warranty vs. Guarantee

Before I begin this post, I should say that I have not done much legal research on this topic. Therefore, it should not be considered legal advice as much as it is an observation about common practice. One of our students asked if there was a difference between a “warranty” and a “guarantee.” In practice, these words are used pretty…

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Is Government Procurement Efficiency Bad For The Economy?

A few days ago, the Pittsburgh Post-Gazette ran an article that indicated that new Medicare competitive bidding procedures soon to go into effect may favor large suppliers vs. small suppliers. While the article described the new procedures, it didn’t really discuss the current procedures so that one can understand what is wrong today. But the effort seems geared toward the…

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Changes In Purchasing

I hope that you have enjoyed the article “Top 10 Purchasing Changes In 10 Years.” If you’ve already read it, you’re likely to have identified a change that you thought should have been on the list. It was tough to limit it to 10. Here are some other changes that didn’t make the top 10: The Internet Made Supplier Research…

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Profit Surge Because Of, Or In Spite Of, Procurement?

An article in today’s Pittsburgh Post-Gazette reported that Alcoa had a big quarterly profit surge. I found the CEO’s quote a little ambiguous as to the reason. He said: “We battled substantially higher material input and energy costs, and currency impacts while simultaneously continuing to execute on the largest capital investment program in our history.” So, with sales declining and…

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