The purchasing plan
Here are some simple and practical tips to help you better select and negotiate with your suppliers.
1. Reflect: what does it take?
The first - and fundamental - is to carry out an inventory of needs. As explained in the book Optimizing purchases, by R. Perrotin and P. Heusschen, “not all purchases represent identical challenges”. Therefore, we must know what we need, in what quantity, at what time and at what price.
To do this, you have to take into account the different types of products and services that are required for the development of your business activity. The most important are those that the experts Perrotin and Heusschen call "strategic". They are so called because they are fundamental to the company, both for their benefits and for their price. This is the case of the computer equipment necessary for the operation of an insurance brokerage or the policies that this type of company offers.
On the other hand, there are more specific and everyday purchases that have less added value. For example, the paper and ink from the copier.
When doing this needs analysis we must assess three different aspects: benefit, quality and service. The balance between all of them will be the key to our success. It is essential to take these three questions into account when facing the next step.
2. Study the candidates
After knowing what we need to buy, we will have to decide from whom. There are two types of providers: those that offer cost leadership and those that offer the best quality. Or what is the same: those that are very cheap, but for which we cannot put our hand in the fire because they are good, or those that are undoubtedly good and we are sure that their price is just as high. Between both suppliers there is an unlimited series of nuances depending on the greater presence of one or the other quality.
Although it may be obvious, never forget that you must have a thorough knowledge of the product you want to purchase. In fact, you have to go further and find out about the market situation and the providers that provide it. Professional associations, chambers of commerce, databases and yearbooks or, simply, the references of these companies that our acquaintances, clients, etc. can give us, can provide us with the necessary information to make the best selection.
3. Make the first contacts
Then it is time to arrange meetings and interviews with different providers. “Don't ask candidates to come see you. Preferably, you go to their companies and observe them ”, advises Charles L. Gay in his book The contracting of goods and services. It will be a good opportunity to observe their work live and gather valuable information.
Try to check their work systems, their skills and weaknesses, if they consider you important among the rest of their clientele and what kind of commitments you can expect from that company.
4. Think: two better than one
The CEF study for ENTREPRENEURS advises “to always keep more than one supplier for each product purchased. If he incurs in a stock break, for example, your company will avoid not being able to meet the deadlines agreed to with customers ”.
The ideal, whenever possible, is to know the offers of different providers and stimulate competition between them. Get in the habit of running small tests with new providers to see how they work before launching into big deals. This will always be to your own benefit.
5. Size matters a lot to you
Another conclusion of the study emphasizes the relevance of the size of the provider. This is an important issue to avoid creating "excessive dependencies in the acquisition of certain vital products for the operation of a company."
If the supplier is a larger company than your business, they may not mind looking bad to you. But, on the other hand, if it is too small, it may not have enough capacity to serve you effectively.
6. Implement a control system
The first thing we must assess from a supplier is the quality of their product. Likewise, the service that accompanies the product must be taken into account.
To maintain adequate control over these objectives, the CEF study ensures that simple evaluation systems can be developed by means of "little automated tools, using spreadsheets in which orders placed and delivery notes received are tracked." .
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