I hope that you have enjoyed the article “Commodities Prices: Managing The Insanity.”
This article was based upon an interview I conducted with Ariba’s Mike Petro. I had become inspired to interview Mike after he wrote this profound statement on Supply Excellence: “The days of holding annual negotiations to set fixed price direct material contracts are over.”
While the article neatly summarized the fundamental stuff you need to consider in this paradigm-shifting time, the accompanying podcast really took a deep dive into the more challenging issues of commodity management in 2008 and the immediate future. Mike and I explored questions such as:
- Are suppliers using inflation news to sneak in unwarranted price increases?
- With adjustable prices, how can purchasing and supply management departments continue to contribute to the forecasts that are so strategically important in many organizations?
- How should volatile commodities prices influence your inventory strategy?
- Once buyers and suppliers agree on a price adjustment provision, is that the end of friction or does that mean that new misunderstandings will arise?
- Will contracts with monthly price adjustment clauses change how strategic sourcing is done or even obliterate it from common practice?
- How can a purchasing and supply management department communicate its value when prices are going up year after year?
If you are struggling with managing the volatile commodities prices, listening to the podcast will be 40 minutes well spent. And, yes, it’s FREE.
To Your Career,
Charles Dominick, SPSM
President & Chief Procurement Officer
Next Level Purchasing, Inc.
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