PurchTips - Edition # 199

 

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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.

Conventional thinking would lead one to believe that the current slow economic conditions would result in high RFP/tender response rates. That has not been the case.

Why would suppliers not eagerly try to earn orders when many businesses are clearly struggling? Are onerous strategic sourcing processes of recent years to blame?

Sourcing Problems

"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.

Therefore, in today's economy, you need to motivate your suppliers to respond to your RFP's. Motivating suppliers may mean making some changes to your sourcing approach. Specifically, Daly recommends having suppliers give online or in-person presentations before they are asked to prepare written proposals.

Though such an approach may seem like it will extend the sourcing process, Daly has found that a more collaborative, less secretive approach helps to motivate the best suppliers to bid on business and deliver more value to the buying organization. This underscores the importance of always having a sourcing strategy that is appropriate for current economic conditions. Economic conditions change over time and problems will arise if your sourcing approach doesn't change accordingly.

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Spotlight On Professional Development Opportunities

SPSM Certification

Are you tired of not getting enough opportunities, respect, and money out of your purchasing career? Well, guess what? Nothing will change unless you take action towards becoming a world-class purchasing professional.

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Is lacking a purchasing certification keeping you from getting the results, opportunities, respect, and money that you want out of your career? Today's employers refuse to reward employees for yesterday's skills. They want you to save more money, achieve better operational performance, and reduce risk. They demand that purchasing professionals like you achieve unprecedented results and without the most modern skills that can be a challenging feat!

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Earning your SPSM® Certification by completing the Senior Professional in Supply Management® Program is the action to take if you want to bring the most modern purchasing practices into your organization and achieve your career potential. Learn how to earn your SPSM® Certification (and perhaps get an iPad) (with the option of getting a Study Guide on an iPad) at:

Distinguishing yourself as an achiever in purchasing is key to sustaining a rewarding career, even in these difficult economic times. Earning your SPSM® Certification by completing the Senior Professional in Supply Management® Program is to take if you want to bring the most modern purchasing practices into your organization and achieve your career potential. Learn how to earn your SPSM® Certification (and perhaps get an iPad) at:

Earning your SPSM® Certification by completing the Senior Professional in Supply Management® Program is the action to take if you want to bring the most modern purchasing practices  into your organization and achieve your career potential. And if you sign up for the Senior Professional in Supply Management® Program on or before May 31, 2008, SPSMSM Certification Program on or before 4/30/2007, you also get these and other bonuses valued at over $700:

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Earning your Senior Professional in Supply Management® (SPSM) Certification is the action to takeif you want to bring the most modern purchasing practices into your organization and achieve your career potential. Learn how to earn your SPSMSM Certification at:

Learn how to earn your SPSM® Certification at:

www.NextLevelPurchasing.com/spsm.html

The Latest Purchasing News!

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