Doing business in today's competitive global economy requires stronger, more reliable relationships in all business segments, including technology equipment, industrial goods, retail products and services. Whether you are a buyer or supplier, regardless of the industry, you must have an understanding of the challenges inherent in the procurement process.
Five Concerns for the Buyer.
- Game Plan Consensus. An effective procurement process begins with the participation of all internal stakeholders from the initiation of a project. Many procurement problems arise from miscommunication - and especially lack of communication - among the parties charged with defining the need, those who identify the source for the solution and those implementing the procurement. Poor communication on the front end of procurement can cause large problems, however, with planning many problems can be avoided.
- Realistic Expectations. Once a procurement need has been defined, the involved stakeholders need to determine and agree on realistic expectations for development, timeframes and costs. This can be a particularly difficult issue to manage as the desire to rush to market almost always forces unreasonable decisions in the development cycle, which in turn impacts timeframes and ultimately results in escalating costs.
- Multiple Sourcing. Betting the project - or worse, the company - on a sole source is tantamount to playing Russian Roulette. While established relationships may give buyers comfort, the failure to have a backup supply option can prove extremely damaging should the trusted source fail. Supply chain planning should include the establishment of alternative relationships and supply paths to reduce source risk.
- Defining the Requirements... to read more, click on the attachment below.
Best Practices in Supply Chain Management
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
