E-Sourcing Forum » Local Growth Foundations

Local Growth Foundations

June 29th, 2007 at 08:04am David Bush - Iasta

SupplyManagement.com recently ran an interesting article entitled the foundation of local growth that examined how purchasers in South Africa are tackling the problems caused by the absence of a strong supply base and lack of training that provides some insights that we all can benefit from.

The article quotes Alec Erwin, the minister for public enterprises, who said that “when buyers focus on obtaining value for money they change their behavior in ways that encourage investment in local industry and the development of more competitive suppliers, which are foundations for economic growth and development” as well as “value-seeking buyers start appreciating their potential power to influence investment decisions.”

As the article rightly points out, buyers understand the cost structure and drivers of their supply chain and recognize the impact on suppliers of stability of demand and economies of scale. They recognize that best-in-class suppliers don’t just magically materialize, they result from collaborative efforts where the buyer works with a good, potentially strategic, supplier over a mid-term or, better yet, long term effort to take them from good to great to best-in-class. For much more in depth discussion on this topic Sourcing Innovation dives in and states, the key to sourcing success is to Collaborate, Collaborate, Collaborate, Collaborate.

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Entry Filed under: General, Suppliers

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