PurchTips - Edition # 199
Sourcing Problems In A Slow Economy
By Charles Dominick, SPSM, SPSM2, SPSM3
Is The Slow Economy Causing Sourcing Problems?
In difficult economic times, suppliers usually behave desperately and will do anything to earn business. This time, it's different.
"With the economic conditions now... almost all suppliers are strained when it comes to time and resources," explains Kathleen Daly, Project Analyst for Source One Management Services, LLC. "Often sending out a complicated and lengthy RFP results in suppliers being unwilling to engage in the sourcing process if they feel that the response will take up too many resources or if they feel they don't have a solid chance of having the business awarded to them."
Strategic sourcing has often been characterized by suppliers as a problem-filled process that involves arms-length communication with buyers during the process and limited to no feedback afterwards. Noting that a restrictive sourcing process can limit the value that suppliers propose, Daly argues that "when suppliers are engaged in an arms-length RFP process, buyers tend to receive an arms-length result."
A timeless purchasing principle is that more competition results in lower costs. So, naturally, you want to attract all the top suppliers.
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