Let’s assume you are procurement professional for a company that is ready to find a better product or service solution for your company’s needs. This is when the legwork begins. So how much legwork is necessary to get the results you need? There are many factors that should be researched and investigated in order to make a value based decision for your company. Below are some guidelines you should consider as a necessary legwork.
UNDERSTANDING THE MARKET:
1. Market Trends– Trends are what allow traders and investors to capture profits. Whether on a short- or long-term time frame, in an overall trending market or a ranging environment, the flow from one price to another is what creates profits and losses. This is something that procurement professionals should keep an eye on so when the time comes they are armed with as much information as possible in order to make the best decision for their company.
2. Pricing Trends– Understanding where the market is headed and why will allow you to make better decisions regarding long / short term contract purchases vs. potential spot buys as well as the need for possible price review intermittently. The current price may be desirable but understanding the trend will allow for better decisions. Awareness and connection to the industry can only help when you are ready to act but more importantly develop a solid long term strategy.
3. Hurdles– Think about people running in a foot race. They are running, and then they see something that blocks their way. They can stop running OR they can jump or go around the obstacle in the road and keep running. Think about work the same way. You worked hard to find the right supplier, cost and service. Now there are unforeseen problems that could result in additional costs or expenditures. Building in contingencies will avoid such issues.
4. Product Content – This is referring to the materials that are required to produce a product or support a service in order to meet necessary standards or specifications. This will affect the price of the product or service you want to purchase. Companies may also have specific guidelines regarding environmental impact or safety standards. Awarding business to a vendor that also has “green” initiatives in place that support your companies CSR initiatives can foster good will internally as well as in the community you serve while also improving your company’s image as a pay it forward workplace.
If you’d like to learn more about how SafeSourcing thinks through it’s category to market strategy, please contact a SafeSourcing customer services representative
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