For those of you who need one, a bad economy is a great excuse to beginning procurement negotiations with your suppliers. But a bad economy also means that some financially weaker suppliers may be on the brink of going out of business.
So do you negotiate with these suppliers to support your cost savings goal? Or do you let them keep a little juice in their pricing so they are around for you in the immediate and long-term future?
The answer is: “it depends.”
Debbie Wilson of Gartner posted on her blog an excellent entry entitled “Is Chasing Deflation A Good Idea?” about this very topic. She makes some thought-provoking points and I added my two cents into the comments.
I recommend that you give it a read and, if you’re brave, enter into the discussion as well.
To Your Career,
Charles Dominick, SPSM
President & Chief Procurement Officer
Next Level Purchasing, Inc.
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