Survey

In spite of high inflation some cost savings were obtained. How much net cost changes in the last 6-12 months did you obtain over or under the budget?

More than 10% under.
1 to 10% under.
No change.
1% to 5% over,
6% or more over.

Facility Visits Generate Ideas

Date: 04/04/2018

Visits to your office, warehouse, or plant by your suppliers often help them give suggestions to improve your operation. Suppliers’ suggestions may or may not involve purchasing the product or service they provide. Their ideas may reduce the amount of labor your organization uses to conduct its business or may offer savings in other ways. For example, the amount of consumable product you usually use may be reduced by implementing it in a different way. Salespeople may also receive a benefit even though they may not actually sell you more right away. But, they create good will that you, as a buyer, will not likely forget.

The same idea works when you, the buyer, visit your suppliers’ facilities. If you keep your eyes open and watch what the supplier’s employees are doing, you may be able to suggest ways for the supplier to reduce cost, speed up delivery, or improve quality. For example, you may notice a better way to package goods for shipment which will reduce breakage or save on transportation costs.

You can’t invite all of your suppliers on the same day or the same week, but you can schedule them over months, and it should not take long before most of the major ones will have had a chance to visit. And one visit from the same supplier may not be enough to get any good ideas, Periodically, you should invite them back. Perhaps it will be a different salesperson who is more imaginative.

Nor can you visit all your suppliers within a short period of time. You probably will need to spread your visits out over several months or more. Once you have seen them all, you may wish to go around again because procedures and employees change, and the equipment used may be new or different.

Don’t neglect looking at office procedures either. Suggesting changes may help suppliers accelerate delivery and cut cost. Look at the way they schedule, how billing is done, and who handles each order received. The suppliers should appreciate it if you can improve their operations.