A robust process and the supporting systems for identifying, qualifying, and engaging suppliers can create a competitive advantage for companies and allow them to out-innovate competitors.
Building and maintaining a house shares many similarities with establishing and sustaining strategic procurement in an organization. In order to build a house one must first select the site, materials, and then oversee construction. Strategic procurement requires disciplined organization commitment to ensure implementation and lasting success. With the constant pressure that companies face today to decrease costs, increase quality, and better relationships, leveraging strategic procurement as a tool to drive results is important.
We will get to what 4/10 net 30 means shortly but we will provide some background first. A purchase order and supporting terms and conditions make up a contract between a buyer and supplier. One of the job responsibilities of a supply chain management professional is to negotiate payment terms upon which you pay a supplier. When you pay for a product or service in your own personal life, you typically pay for it upon receipt or delivery of the good or service. However, in business-to-business transactions, the supplier usually does not get paid right away
Total cost of ownership (TCO) is the sum of all costs associated with every activity of the supply stream during the acquisition of a given service, component or product. During the sourcing process, a TCO analysis groups certain cost inputs into specific categories to display the full visibility of all costs when making a sourcing decision. These costs are commonly referred to as direct costs, indirect costs, acquisition costs, life cycle costs, purchase price, and end of life costs. Together, these cost categories represent not only the purchase price of the service, component or product but also the cost of acquiring it, maintaining it, and disposing of it.
More often than not, I get the following questions about my company, “So, how many employees do you currently have? or “How big is your team?” I really love this question, not because of the question itself, but the answer that I have been able to prepare, being that I have heard it so many times. Here it goes. It is not about the size of your team, but the “right” people and their supporting training, processes, and tools, the “right stuff.” Sure, these may not be the answers to all your problems, however, attaining the right people and right stuff, will lead you down the path to long term supply chain success.
Actionable insights from IndustryStar on ways to expedite, optimize, and de-risk your supply chain operations.