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.

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Try a New Approach

Date: 06/01/2010

It is human nature to get into a habit of doing something the same way day after day, year after year. Most people drive to work by the same route every day. Most eat the same foods. Most read the same material. Few change their habits about entertainment. They watch the same sports, watch the same TV shows, and listen to the same type of music. It is difficult to change. It is more comfortable to keep doing what you have been doing.

But creative people try new things. Men grow a beard. Women try a new hairdo. Musicians try a new kind of music. Doing things a different way stimulates the brain and provides new ideas and a new appreciation of things not known or realized before.

The same principle is true for business activities and the purchasing function in particular. For example, if your organization has always used split sourcing, giving business to three or more suppliers for the same item, try giving all your business to the best one of the bunch for a year in return for some better pricing. If you always give your business for one item to just one supplier, consider spliting the business to get all of them to compete with each other.

Look at all your policies and procedures with a critical eye. Imagine doing things in a different way. Your habits have probably made you out of date and your operation is probably inefficient if you are still using all paper documents when everyone else is dependent on the computer.

If you are completely tied down to your office and never visit your suppliers’ facilities, try changing your habit. Get out and visit them and if you ask the right questions and observe what you see you will likely be surprised about what you will learn.

If you always stay in your office and wait for requisitions from other departments, walk to other offices and ask what you can do to help with their supplier needs. Ask for their suggestions about purchasing activities. Good ideas often come from those who are not too closely involved in an operation.

However, be careful about installing major changes. You are likely to get resistance unless the advantages are obvious and you carefully solicit cooperation.