Comments on: Squeeze Suppliers for Juicy Savings? http://www.esourcingforum.com/archives/2006/11/13/squeeze-suppliers-for-juicy-savings/ The source of information and best practices in strategic sourcing. Sun, 12 Oct 2008 11:13:03 +0000 http://wordpress.org/?v=2.6.2 By: Sean Delaney - Iasta UK http://www.esourcingforum.com/archives/2006/11/13/squeeze-suppliers-for-juicy-savings/#comment-3967 Sean Delaney - Iasta UK Fri, 17 Nov 2006 20:11:49 +0000 http://www.esourcingforum.com/?p=304#comment-3967 Doug many thanks for taking the time to add your thoughts. I think this subject has touched a nerve and we certainly need to revisit again at a later date. Doug many thanks for taking the time to add your thoughts. I think this subject has touched a nerve and we certainly need to revisit again at a later date.

]]> By: Doug Cooper http://www.esourcingforum.com/archives/2006/11/13/squeeze-suppliers-for-juicy-savings/#comment-3966 Doug Cooper Fri, 17 Nov 2006 18:45:15 +0000 http://www.esourcingforum.com/?p=304#comment-3966 Agree wholeheartedly with your observations. More suppliers? Why not? As long as the cost to manage them ( in terms of Supplier Management and product / service TCO) decreases while the number increases. For more than a decade I've been a proponent of Procurement Departments approaching a Market, not a set of suppliers. In making a market, a innovative buyer/sourcer will build the lowest cost/highest value transaction base with his supplier. Ultimately, a favorable marketplace will ensure optimal, long term relationships or the flexibility to build them. Reducing the numbers of suppliers is "set of supplier" thinking, not necessarily where efforts are at all productively placed. Squeezing Suppliers is unfortunately a standard practice in many companies. This merely produces a short term effect and forces one's trading partner to optimize its marketplace by finding another buyer, I say its time for Supply Management to update their Market Practices, not their purchasing practices. Agree wholeheartedly with your observations. More suppliers? Why not? As long as the cost to manage them ( in terms of Supplier Management and product / service TCO) decreases while the number increases.

For more than a decade I’ve been a proponent of Procurement Departments approaching a Market, not a set of suppliers. In making a market, a innovative buyer/sourcer will build the lowest cost/highest value transaction base with his supplier. Ultimately, a favorable marketplace will ensure optimal, long term relationships or the flexibility to build them. Reducing the numbers of suppliers is “set of supplier” thinking, not necessarily where efforts are at all productively placed.

Squeezing Suppliers is unfortunately a standard practice in many companies. This merely produces a short term effect and forces one’s trading partner to optimize its marketplace by finding another buyer,

I say its time for Supply Management to update their Market Practices, not their purchasing practices.

]]> By: Sean Delaney - Iasta UK http://www.esourcingforum.com/archives/2006/11/13/squeeze-suppliers-for-juicy-savings/#comment-3947 Sean Delaney - Iasta UK Tue, 14 Nov 2006 09:31:54 +0000 http://www.esourcingforum.com/?p=304#comment-3947 Eric thanks for your comments. Your example of the contract labour is even more relevant when you try to apply the same supply solution accross many countries i.e in Europe. Eric thanks for your comments. Your example of the contract labour is even more relevant when you try to apply the same supply solution accross many countries i.e in Europe.

]]> By: Eric Strovink http://www.esourcingforum.com/archives/2006/11/13/squeeze-suppliers-for-juicy-savings/#comment-3946 Eric Strovink Mon, 13 Nov 2006 18:45:09 +0000 http://www.esourcingforum.com/?p=304#comment-3946 Oops! Sorry, Sean! Oops! Sorry, Sean!

]]> By: David Bush - Iasta http://www.esourcingforum.com/archives/2006/11/13/squeeze-suppliers-for-juicy-savings/#comment-3945 David Bush - Iasta Mon, 13 Nov 2006 17:23:48 +0000 http://www.esourcingforum.com/?p=304#comment-3945 Thanks for the comment, Eric. I would gladly accept your praise but Sean actually wrote this, so I cannot take credit! Thanks for the comment, Eric. I would gladly accept your praise but Sean actually wrote this, so I cannot take credit!

]]> By: Eric Strovink http://www.esourcingforum.com/archives/2006/11/13/squeeze-suppliers-for-juicy-savings/#comment-3944 Eric Strovink Mon, 13 Nov 2006 17:16:11 +0000 http://www.esourcingforum.com/?p=304#comment-3944 Precisely, Dave. In some verticals, such as contract labor, one supplier might give you the best price for a particular job category (e.g. Java Programmers I-IV) but fall down on the job when it comes to accounting temps. Furthermore, that same supplier might be great in New York in terms of price or flexibility for a particular job category, but abysmal in Chicago. The right mix of suppliers for the right commodities, combined with spend visibility and good integration of contract information into the spend cube, means that bypass spend can be tracked precisely -- and optimal results achieved. Precisely, Dave. In some verticals, such as contract labor, one supplier might give you the best price for a particular job category (e.g. Java Programmers I-IV) but fall down on the job when it comes to accounting temps.

Furthermore, that same supplier might be great in New York in terms of price or flexibility for a particular job category, but abysmal in Chicago. The right mix of suppliers for the right commodities, combined with spend visibility and good integration of contract information into the spend cube, means that bypass spend can be tracked precisely — and optimal results achieved.

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