The 25 New Rights of Purchasing, Part I

PurchTips edition #275

 

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By Charles Dominick, SPSM, SPSM2, SPSM3

Picture of Charles Dominick, SPSM, SPSM2, SPSM3

Are The Original 5 Rights of Purchasing Obsolete?

Upon entering purchasing in the mid-90's, I learned the "5 Rights of Purchasing" - principles describing ideal interactions with suppliers. Purchasing was much less sophisticated then, as there is way more required for ideal interactions with suppliers today.

So, I present you with Part I of the "25 New Rights of Purchasing," starting with modern variations on the original "5 Rights." I'll continue this list every other edition of PurchTips until we cover all 25.

  1. Right Total Cost or Value - The original label of "right price" is insufficient today, as complex purchasing decisions are based on total cost or value not price, which is only one component of total cost. Total cost and value vary from product to product, service to service, and supplier to supplier. As such, the lowest priced product or service isn't necessarily the one with the lowest total cost or highest value.
  2. Right Availability - Originally called "Right Time," this "right" meant getting a product or service when you wanted it. Today, many options beyond the classic delivery model such as consignment, integrated supply, vendor-held inventory, just-in-time, and other practices require more up-to-the-minute supplier flexibility than just meeting a date on a PO.
  3. Right Place - Indicating that the product or service has to be delivered where needed makes the name of this "right" still relevant. However, modern supply chain design makes use of central warehouses, distribution centers, and drop-ship destinations worldwide, requiring greater logistical proficiency.
  4. Right Quality - This "right" can also keep its name, although the widespread adoption of newer quality programs like Six Sigma, Lean, and Lean Six Sigma have raised the bar for what the "right quality" is!
  5. Right Quantity - What's "right" about quantity is now beyond simply ensuring that the number of items in a box matches the packing slip. Today's suppliers can help you optimize inventory levels, work towards lead time reductions, and do other things that help you not buy more than you need to.

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