The global economy is undergoing a Digital Transformation at record pace. Declining costs in bandwidth, storage and computing enable organizations to optimize, connect and model data to improve decision making and to drive results. Whatever the experts call it: Industry 4.0, Digital Economy, Internet of Things, Harnessing the Power of Artificial Intelligence and Machine Learning – its potential can help purchasing organizations ensure that they are buying at optimal cost levels, from … [Read more...]
Quotation Whack-a-mole
In whack-a-mole a person hits the mole forcing it down only to have it pop right back up in another location. In quotation whack-a-mole buyers push on an area of supplier costs to get pricing to go down only to have costs pop-up in another area bringing prices up as well. Buyer and suppliers continue this game through multiple rounds of quotes on each piece of business to be awarded. So, what is the alternative? We recommend that buyers stop playing the game altogether and instead … [Read more...]
Manufacturers Need Cost Savings Now More Than Ever
Expectations are that hard hit manufacturing sectors will see improving revenues in 2021, although how quickly improvements will come is greatly dependent on the world’s ability to rebound from the ongoing covid surge. With little control over revenue growth amid a global pandemic, company leaders are looking to their purchasing teams to aggressively drive cost savings. Manufacturers looking to aggressively drive cost savings should: Take a deep breath before cutting purchasing … [Read more...]
Is Your Commodity Strategy an Empty Suit?
Over the past 16 years we have looked at hundreds of commodity strategies. Most often the strategies are contained in long PowerPoint presentations designed to demonstrate how well the supply base is aligned with the company’s long-term strategies. Almost all provide good analysis of the size, shape and form of the supply base that is required to support their company’s future demand requirements. Most identify the expectations suppliers need to meet in support of quality, technology and … [Read more...]
Why Great Buyers Become Great Leaders
Attend our New Cost Management Certification Program - a 4 Month Development Program for new buyers seeking essential skills and experienced buyers seeking cutting edge techniques to success Click Here to Download our Brochure I have always thought that good buyers transition into good managers and finally good leaders. What characteristics do good buyers have that make them good leaders? Here are a few: They ask good questions. “Judge a man by his questions … [Read more...]
5 Steps to Cost Success
Purchasing success cannot be achieved by purchasing organizations or individual buyers without cost success. But what is cost success? One of the best purchasing leaders in the manufacturing industry explained it to us this way: “The best purchasing organizations and buyers can answer these questions: What does it cost? What should it cost? What is the plan to close the gap?” He was right…whether they are doing it consciously or not, almost all buyers and purchasing … [Read more...]
How Cost and Collaboration Can Energize your Career
We have 15 years of data that shows that buyers who move from price-focused, competitive purchasing to cost/value-focused, collaborative purchasing can achieve savings of 8-18% (see figure). I wish we had a similar level of data on the career progression experienced by buyers who develop cost knowledge and utilize it in a collaborative way. I think it would be revealing. It has been my experience that buyers who develop a deeper understanding of cost also increase their knowledge of … [Read more...]
5 Steps to Gain Supplier Agreement to Cost Transparency
Some buyers just have a knack for getting suppliers to do what they want them to do, especially when it comes to providing cost transparency. Suppliers agree to provide buyers cost breakdowns, back-up data and even access to financial information. … [Read more...]
Understanding Cost
Purchasing success cannot be achieved by purchasing organizations or individual buyers without cost success. But what is cost success? One of the best purchasing leaders in the manufacturing industry explained it to us this way: “The best purchasing organizations and buyers can answer these questions: What does it cost? What should it cost? What is the plan to close the gap?” He was right…whether they are doing it consciously or not, almost all buyers and purchasing … [Read more...]
A Cost Management and Digital Transformation Strategy for Buying Organizations
The global economy is undergoing a Digital Transformation at a record pace. Connected data, departments, companies and industries are driving transformation to use the latest technologies to do things better. Digital transformation enables purchasing organizations to transform from disconnected data and single point decisions to connected data and better decisions. APD’s Cost Management and Digital Transformation Strategy for Buying Organizations is a step-by-step approach to position a … [Read more...]
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