Competition is one of the keys that drive your ability to control and reduce your costs, therefore, you should have an open door policy for dealing with vendors. By this I do not mean that you should see every sales rep that comes knocking on your door. After all, using your time efficiently is an important factor in increasing your productivity which leads to reduced costs.

What I am saying is, use some common sense in choosing who you see and when you see them, but make sure that you or your people are seeing a revolving base of suppliers and vendors. You want competitive bids for the products and services that your company buys.

If you or your purchasing department are only reviewing prices from the same nucleus of vendors over and over, you are never going to approach anything even close to total cost control. If you are only dealing year in and year out with a base of regular suppliers, you are not going to know if you are getting the best value from your current sources and you will not know if you can get a better value from another source.

In order for those that are doing the purchasing to get the best value, they must constantly be considering new sources, new products, new services, and new procedures.

What if a new product has come on the market that lasts twice as long as the one you have been buying and costs half as much? If your regular supplier does not offer this product and you do not keep up with the product lines of other sources, you may not even find out it exists.

Never let your people only deal with the same group of suppliers and certainly not with a single source. They must keep an open mind and this requires keeping an open door.Remember, competition is a vital weapon in your battle to control and reduce your costs.

An additional benefit of dealing with a core of normal suppliers and a revolving base of secondary suppliers is that you will be exposed to many other ideas. These suppliers will be an excellent source of input regarding your competition, market demands, industry trends, new products, and new processes. They can provide your people with new ways to look at things and new ways to do things. They may give you ideas that can be used to increase sales, improve productivity, reduce costs, or reduce errors.

It is the business of these people to sell to your industry and related industries. Therefore, in many ways it is their business to know about your industry. Consider the best suppliers and sales reps to be much more than a vendor; view them as a resource and don’t hesitate to ask them questions.

Ways to Dramatically Improve Your Purchasing

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