I hope that you have enjoyed the article “Does Cost Containment Have 2 C’s Or 4?“
In the article, I give tips on how to achieve cost containment. I think that if we flip around the points a little bit and turn them into questions, you can have an assessment on whether or not your organization is truly focused on cost containment.
A self-assessment is important. I see a lot of companies say “Oh, we’re struggling with rising prices.” But what are they doing about it? Or, are they doing enough to combat inflation? Using these questions as an assessment will shed some light on that:
1. Is your spend adequately consolidated or are you still using too many suppliers in certain categories? (Or, even worse, do you not have any visibility into the number of suppliers you are using in each category?)
2. When you last sourced in high-spend categories, did you have a large number of bidders and allow newer, unfamiliar suppliers to be considered? Or did you invite the same cast of characters consisting of only three or four suppliers?
3. Do you have long-term contracts in place? If so, how much of your spend is covered under contract?
4. How closely do you work with your suppliers to identify improvement opportunities? Or do you just place orders and expect to get them in without any further expectations on your suppliers?
To Your Career,
Charles Dominick, SPSM
President & Chief Procurement Officer
Next Level Purchasing, Inc.
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