The season of goodwill and peace to all may be here, but as purchasers immerse themselves in the procurement of Christmas (buying Christmas items), they should ensure that an inner Scrooge doesn’t sabotage vital supplier relationships, a procurement expert warns. Writing in Procurious, the business network for procurement and supply chain professionals, procurement executive, Robert Freeman, identifies three errors commonly made by busy professionals in procurement and supply chain jobs that could be construed as mean-spirited ‘Ebenezer-type’ acts that can destroy trust with valued suppliers.
The first, ’empty threats,’ often takes the form of not-so-subtle hints that a rival supplier is offering a better price. For Freeman, if you can’t prove it, don’t say it. It reflects either a lack of evidence-backed arguments or a lack of preparation, both of which are easier to commit at high-pressure times, such as Christmas. But seasoned professional suppliers will see through a bluff, leaving respect and trust damaged.
Freeman’s second common procurement mistake is seeking to continue negotiations after contracts have been inked. Again, high-pressure times, such as Christmas, may contribute to this. Important considerations may be left unsaid or unexplored as the deadline for supplier selection approaches, but the next step is the trust killer. If procurement pros seek to wheedle further cost reductions out of the supplier, it will seem like seeking to re-negotiate the contract after it’s been signed. Freeman urges purchasers to act professionally in such situations by being open and transparent with the vendor if an opportunity for reduced prices emerges after signing. Explaining the new data and setting the arena for further discussions is more up-front and honest than seeming to change the rules after the game.
Finally, stop focusing on cost reduction like a latter-day Scrooge. Exploring the business relationship, the supply stream, and the infrastructure of the business can lower costs by identifying ways of doing things faster, smarter, and better, often resulting in bringing bigger volumes into the business.
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