ProPurchaser Best Practices

Trust your suppliers but not their data

Of course you need to trust your suppliers: their products, delivery, quality and service . Makes sense or why would you want to do business with them?

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Trust your suppliers but not their data

When you're negotiating, Direction counts more than Accuracy

Years ago, while working for Green Giant, I phoned our steel can sales rep to ask for a 4% reduction. We had information suggesting steel prices had fallen 8%.

He certainly wasn't very happy and, as expected, argued against any decrease.

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When you&apos;re negotiating, <span class="italic">Direction</span> counts more than Accuracy

Negotiate knowing what you SHOULD be paying

Imagine the negotiating edge you would have if you knew—and could demonstrate—what you SHOULD be paying for the products you buy, especially when suppliers come to you with sad tales about price increases they just can't hold off any longer because of global commodity price rises.

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Negotiate knowing what you SHOULD be paying

Purchasers' Turn to Shine

It's still quite scary out there: recession clouds may have receded, but they are still lurking in the distance. Sales volumes are struggling to rise; unfortunately, costs are struggling less, as suppliers pile on price increases, citing higher raw material costs as the reason.

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Purchasers' Turn to Shine

Plant Tours Worth every Minute

The struggle to find "good fit" suppliers never ends. How do you make sure – really sure – that your supplier is capable of going the distance providing you with the price, quality and service that your company and your customers demand?

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 Plant Tours Worth every Minute

Fishing with Suppliers

I once had a very smart boss whose favorite expression was "Fish where the big fish are!"

Great advice: especially for busy people, who constantly need to re-prioritize their work, because they have no hope of ever getting everything done!

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Fishing with Suppliers

Create a Tag-Team to Wrestle Costs Down

These are tough times to be in business. Costs are rising but selling prices are not, mainly due to global competition. The arithmetic is simple: profits are being squeezed. Finding ways to drive down costs lower than your competition's has become more important than ever.

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Create a Tag-Team to Wrestle Costs Down

The Marketplace and the Five-Hundred Pound Gorilla

Purchasers know how hard it can be to convince our superiors & peers that we are doing a good job.

We struggle with Suppliers all the time, arguing, calculating, cajoling, pushing back to get the lowest possible all-in costs – and still we sometimes go over budget!

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The Marketplace and the Five-Hundred Pound Gorilla

Beating the Budget Blues

Most Purchasers are called upon each year to prepare a budget for the products they buy. Given the uncertain marketplace, estimating Suppliers' prices is a tough job. It's easy to go wrong, easy to make decisions you'll come to regret.

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Beating the Budget Blues

The Power of Peer Pressure

Anyone who survived the social pressure cooker of high school knows about the power of peer pressure. For supply chain professionals trying to drive down costs, the good news is that peer pressure can have the same impact in corporate corridors as it did in the blackboard jungle.

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The Power of Peer Pressure

Buying Professional Services – a Re-Think

RFP’s (and RFQ’s) can actually increase project costs and decrease the likelihood of finding the best suppliers for professional service engagements. Here’s why.

Unlike sourcing goods or equipment, when purchasing professional services, your goal should be to narrow down your evaluation to a few, well-qualified firms.

The RFP process is designed to produce the opposite. It broadly invites many firms to bid, in the name of competition, fairness, and transparency. The intended result is to ensure a job well done at the lowest possible price. Unfortunately, this is usually not achieved when tendering professional services...

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Buying Professional Services – a Re-Think

The Multiplier Effect

If you want to really use your buying power to make a environmental difference, make sure that any "green" criteria for vendor selection are widely publicized so that your suppliers’ competitors hear about them too. In this way, encouraging a change in one supplier can have a "multiplier effect" on many others.

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The Multiplier Effect

Plant Tours Worth every Minute

The struggle to find "good fit" suppliers never ends. How do you make sure – really sure – that your supplier is capable of going the distance providing you with the price, quality and service that your company and your customers demand?

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 Plant Tours <span class="italic">Worth every Minute</span>

Make Your Suppliers Play Fair - Factory Built Homes

In the factory-built home business it's easy to feel you're at the mercy of your suppliers – especially with their sad tales of price increases they simply can't put off any longer, because of rising commodity costs.

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Make Your Suppliers Play Fair - Factory Built Homes

Commodity-based Contracts take the Hassle out of Buying

In a world where more & more things are commoditized, commodity-based contracts make a lot of sense. Not only can they bring you peace of mind, they can save you money.

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Commodity-based Contracts take the Hassle out of Buying

Profits and Corporate Social Responsibility go Hand in Hand

What is Wal-Mart doing for the planet? In 2007 they are planning to invest in the largest privately funded alternative energy source using solar power. Why? It saves them potentially millions of dollars in reduced heating and air conditioning costs. W-M has turned on to energy-efficient fluorescent light bulbs for the same reasons. Their next objective is to divert miles and miles of waste plastic in the form of shrink-wrap that they...

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Profits and Corporate Social Responsibility go Hand in Hand

Making Suppliers Play Fair

Suppliers are always quick to point out when their input costs go up - and then raise their prices, of course!

But the reverse seldom happens. When was the last time you got a call from a supplier telling you his costs had gone down?

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Making Suppliers Play Fair

More about Environmentally Responsible Purchasing

We had good response to the first article and, to our pleasant surprise, members sent in their own ideas. Here are a few:

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More about Environmentally Responsible Purchasing

Add value to your organization while helping our planet

There's a very good reason why more companies than ever are focusing on the environment – it's good for business!

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Add value to your organization while helping our planet

Use labor productivity to drive down purchase costs.

Suppliers often use wage increases to justify nudging up prices each year, usually 1 to 3%. And it's hard to argue: - seems reasonable, and it's less than inflation.

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Use labor productivity to drive down purchase costs.

Galileo and the Purchasing Knowledge Revolution

Galileo, he invented the telescope, didn't he?

Well, no actually. He built a telescope soon after its invention in Holland, and made some supremely important discoveries by applying his new knowledge to what he saw.

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Galileo and the Purchasing Knowledge Revolution

Ontario Electricity Picture is becoming Clearer (and it's not a prettyone)

Ouch! Ian MacLellan, Propurchaser's energy deep expert, cuts through the confusion with a synopsis of the major drivers that will influence what you will pay for electricity next year.

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Ontario Electricity Picture is becoming Clearer (and it's not a prettyone)

You Can't Have Peaks Without Valleys

Costs for many basics - like metals, energy, & plastics - have been rising lately, creating a kind of general inflationary expectation in the industrial marketplace.

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You Can't Have Peaks Without Valleys

Purchasing Careers Count

We don't judge baseball players or hockey players just by gut feel, we check out their numbers, batting averages (.300 is good) and scoring records (50 goals a season is great). We are all more comfortable & confident in our assessments if we know the numbers.

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Purchasing Careers Count

Join the Purchasing Knowledge Revolution

We purchasers have always relied on our knowledge - but in recent years much more detailed information has become available via the Internet. Thanks to this technology we are witnessing the birth of a Purchasing Knowledge Revolution . And those who are joining it have a powerful new resource for driving down costs.

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Join the Purchasing Knowledge Revolution

Making Suppliers Play Fair

need a summary for kelly phone call.

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Making Suppliers Play Fair

Commodity-based Contracts take the Hassle out of Buying

Purchasing plastic or metal components - or parts made from wood, rubber, or other commodities, for that matter - can be frustrating & time-consuming. Prices are always on the move, so you have to be constantly monitoring the market and haggling & hassling.

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Commodity-based Contracts take the Hassle out of Buying

Mountain Ranges in Uncharted Cost Territory

Costs for many basics - like metals, energy, paper, foodstuffs, & plastics - have been rising lately, creating a kind of general inflationary expectation in the industrial marketplace.

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Mountain Ranges in Uncharted Cost Territory

Ups and Downs

It's easy to feel that prices are always rising, especially in recent months. Look at gasoline & steel, look at softwood & aluminum!

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Ups and Downs

Energy Prices - Moving Together, Moving Up

There are two broad trends in energy in North America today:

  • energy prices are following each other, and
  • the long term direction is up.

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Energy Prices - Moving Together, Moving Up

What To Do About Rising Energy Prices

Given that natural gas, oil, & electricity prices are now closely linked and moving generally upward, what is a Purchaser to do?

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What To Do About Rising Energy Prices

Against the trend, some costs are falling - especially in Canadian Dollars

To understand what is a fair price for you to pay your suppliers, it helps to know the costs of their underlying inputs or commodities - the principal raw materials in the products you purchase. For example, the major factor affecting freight rates is the cost of diesel.

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Against the trend, some costs are falling - especially in Canadian Dollars

Steel Market Situation: Survey by UK Steel

Principally as a result of the dramatic increase in Chinese steel consumption, supply shortages of vital steelmaking raw materials have begun to emerge. These shortages together with other pressures are rapidly driving up steel production costs and could in the medium term lead to steel product shortages unless customers right down the supply chain accept the necessity for steel price increases.

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Steel Market Situation: Survey by UK Steel

Paying too much for corrugated packaging?

If you have 3 minutes, we'll describe not only how to push back requests for price increases, but, more importantly, how to negotiate price reductions.

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Paying too much for corrugated packaging?

Purchasers Heed the Call of the Loonie

The Canadian dollar has been soaring. It closed on January 27th, 2004 at 76.10 cents U.S., up about 20% over the last 12 months.

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Purchasers Heed the Call of the Loonie

What Purchasers Should Know About Selling Scrap

Curiously, Purchasers, though trained to buy, are often required to sell - in particular to sell scrap. Here are some ideas that can help busy Purchasers succeed in their dual duties. First, some background...

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What Purchasers Should Know About Selling Scrap

Searching in the World Wide Haystack

My purchasing pal George bustles over to my desk the other day. Barry, he says, this World Wide Web that's supposed to know everything - how the heck do I find what I want in it? It's like a library with too many books, I don't know where to start.

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 Searching in the World Wide Haystack

The Purchasing Knowledge Revolution

For Purchasers, the Internet is Galileo's telescope. It lets you see things previously invisible in the Suppliers' universe – like what's happening to their input costs.

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The Purchasing Knowledge Revolution

Use a Higher Canadian Dollar to Drive Down Purchasing Costs

The American greenback rules the world of commodities, plain and simple. Look at aluminum. It can only be bought in US dollars, even in Canada. This is in spite the fact that a Canadian company, Alcan, manufactures it; most of the input costs, such as labor and energy are paid for in Canadian dollars; it is transported on Canadian trucks with Canadian drivers, and it is sold directly to Canadian customers.

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Use a Higher Canadian Dollar to Drive Down Purchasing Costs

Ontario Electricity Update

In their electricity market consultation process, the provincial government has now received 150 written positions and has talked in person with a number of large users and industry associations. Here is what is emerging:

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Ontario Electricity Update