Today, I am going to continue on a series of posts I started last week in which I began providing a deeper explanation of some of the bullet points from Next Level Purchasing’s 20-Point Proposal Evaluation Checklist. In this post, I’ll be digging into the line item labeled “Did the supplier offer value creating or cost saving ideas?”
Procurement professionals have been accused of focusing on price and not recognizing differences in supplier offerings. Sometimes, this is a supplier’s shallow, last-ditch attempt to win the business. Other times, it is absolutely spot-on. To make sure that you understand the value (i.e., opportunity for higher profits) that your supply base can deliver, always ask for value creating or cost savings ideas.
And that is just a first step. It disappoints me that procurement professionals go as far as asking for such ideas, but then do nothing when they receive them. In many instances, there are profit-improving opportunities placed literally right under their noses that they ignore. Sure, some of these supplier ideas would be time consuming and costly to implement and may be a distraction from more mission-critical projects, but some can be implemented relatively easily and the financial benefits would be measurable.
Are you requesting – and using – ideas from your suppliers?
I sure hope so.
To Your Career,
Charles Dominick, SPSM
President & Chief Procurement Officer
Next Level Purchasing, Inc.
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