Five decisions,
try them yourself
A week in procurement is mostly decisions about who to buy from, what price to accept, what to keep in stock and what to do when a shipment runs late. Here are five of those calls as small exercises, a minute or two each.
The numbers here are made up. The way of thinking is real, and the details of the employer's business stay private.
The supplier showdown
The lowest quote often costs more by the time the part reaches the shelf.
Three suppliers have quoted for the same 1,000 brake pads. Pick one, then see what each would really cost once freight, duty and payment terms are counted.
A supplier with a low price can still be the expensive choice once freight and payment terms are added up. The full cost gets compared before any supplier is recommended.
The negotiation
Suppliers move on price when they get something useful in return.
You have four moves. Each one changes the price and how the supplier feels about you. Push too hard and they stop giving ground.
Offering a supplier something that helps them, such as steady volume or easier planning, earns a better price. They remember it the next time a favour is needed.
4 moves left
Build the range
Every item should earn the cash it ties up.
You have 100 to spend on stock. Choose the items you would carry and watch the numbers above change as you go. Lock it in when you are happy.
Cash stuck in slow stock cannot pay suppliers or fund the items that sell. The range gets reviewed regularly, and anything not paying its way is cut.
Forecast the year
Start from last year, then adjust for what is different this time.
The dashed line is last year's demand for one part. Drag across the chart to draw next year, using the notes under it. Then reveal what actually happened.
A better forecast means less money in the wrong stock and fewer customers sent away empty-handed. Forecasts here are built from real demand and reviewed every cycle.
Run the quarter
When plans go wrong, fix what affects customers first and keep the response in proportion.
Three months and three surprises. Every choice moves cash, customers, margin and supplier goodwill, and none of the options is free.
When a shipment is late or costs change, the first step is to look at the effect on the whole business. Spending heavily to fix a small problem is the mistake to avoid.
What you get if you hire me
- Lower real costSuppliers compared on the full cost to the shelf, not just the quoted price.
- Better supplier dealsBetter prices in return for things suppliers value, with the relationship kept in good shape.
- Cash kept movingLess money sitting in slow stock and more available for the items that sell.
- Forecasts you can explainBuilt from real demand and checked every cycle, so each order has a reason behind it.
- Steady decisionsWhen something goes wrong, customers come first and the cost of fixing it stays sensible.