Purchasing's Best Practice Tips for Buying in a Recession
Purchasing recently ran an article on best practices for buying in a recession that contained five tips for buying in these troubled times. While most of the tips were pretty basic, sometimes the basics are best, and they are worth repeating.
The tips were:
- Put the pressure on business stakeholders
Put the onus for achieving defined savings goals on the business unit executives (with backing from senior management). - Give your suppliers a check-up
Make sure your suppliers are healthy and not on the verge of bankruptcy. Do this by insuring your suppliers are paying their suppliers on time, aren't burning through too much cash too fast, and have the resources to weather the storm. - Help key suppliers
Start by paying promptly. Delaying payments for ridiculously long timeframes will just cost you more in the long run (since suppliers will likely not be able to get financing as cheaply as you and, at contract renewal time, will have to up their prices to cover the loss). - Don't forget the fundamentals
Consolidate buying, extend contracts with preferred suppliers, and continually monitor your suppliers' health. - Get Lean
Control inventory, control commodity costs, and minimize waste.
Posted by the doctor at 5/21/2009 1:01 PM 
Categories: Best Practices, Procurement Innovation, Supplier Management
Tags: Recession Supply Management
Categories: Best Practices, Procurement Innovation, Supplier Management
Tags: Recession Supply Management
Please provide details/resources for
each of the above items...
for example what are the different ways (data-driven) to identify lagging suppliers.
What are the options available to control inventory?
Put Pressure on Business Stakeholders
CPO needs to convince CEO that the savings goals can only be realized if CEO holds each department head accountable for insuring his or her people spend against contract
Give Your Suppliers A Check-Up
Use a supply risk assessment from Experian, D&B, or another provider who has enough supplier financial data to make a financial risk assessment
Help Key Suppliers
Define fair payment terms and pay on time, use scorecards, and work with suppliers to correct identified weaknesses
Don't Forget the Fundamentals
Strategic Sourcing and e-Procurement and Scorecards.
Get Lean
Improve your forecasting and, if the supplier is in a better position, use VMI (Vendor Managed Inventory)
See the blog archives for more information on all of the above.