E-Procurement-in-New-Dimensions

At what point would you be willing to change

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Unformatted text preview: ider multiple factors that are important to you. As the old saying goes, “be careful what you ask for, you might get it.” Before committing your volume to an auction, a third party, or some other variant, it is important to understand your company’s willingness to live with the results. At what point would you be willing to change suppliers –– for a 1% improvement, a 25% improvement, or under no circumstances at all? What if a supplier who you don’t know much about, or are not entirely comfortable with, wins the auction event? Sure, you can choose not to give them your volume, or you can use the auction purely as a way to reduce the prices and margins of your incumbent suppliers without making a change … at least for a while. But without your commitment to live with the results, suppliers will quickly recognize that it is just a paper exercise, and may not continue to participate fully and openly. Process improvement While outsourcing is a broad business trend today and can be used effectively for procurement, as discussed above, many companies continue to be interested in improving their own internal capabilities to strategically manage their supply base and execute programs that drive do...
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