While your costs are on the rise, there are steps you can take get back control.
Today’s post is by Dave Wenig, Sr. Vice President of Sales and Services at SafeSourcing
Today’s post is by Dave Wenig, Senior Vice President of Sales and Services at SafeSourcing.
In yesterday’s post, we covered some of the reasons why costs continue to rise across all categories. You’ve probably noticed this in your own personal purchasing experiences as well.
No matter why a certain cost has been rising, some of our customers have continued to work with SafeSourcing to push back against these forces. What we’ve learned has been interesting. At times, what we’ve learned has actually been genuinely surprising.
In the previous post, we focused in on a couple main reasons why purchasers feel they cannot control the rising cost. These were that they don’t want to disrupt their existing supply chain and that they don’t feel they have the leverage to have an impact.
So, what’s a buyer to do? Let’s get into some answers.
If you worried about potential disruption in your supply chain, we could say that this is unlikely if you manage the process well. We’re aware of the pitfalls such as delays caused by switching and we’re going to help you avoid that. What we’ve seen from experience is that patience wins out. If you’re likely to have continually rising costs over the next year and you choose to do nothing, then you have accepted the cost increases for the full year. No matter what. If you choose to work strategically and source a category even if it will take some amount of time to work through the change from your current source to an alternative source, you will eventually benefit from that new pricing model. Rather than accept 12 months of increases on top of your pricing, you may only have to tolerate 3 months as you work and be patient through the initial the delays. There are other examples, but this more short-sighted example seems to be common.
You do have leverage. Those that think they don’t have leverage as a buyer in this market lack the perspective that we have at SafeSourcing. We see customers of all sizes find success if they’re willing to put in the work with us and try. The reality is, there are always competitors looking to win your business. Many customers come to us with this concern without realizing that there are much smaller competitors out there finding success in sourcing already and they are likely to find even more based on their size. Regardless of your perspective on leverage, it’s important to trust the process that brings the vendors together to compete in real time for your business. Even in an up market, the process still causes margins to be minimized based on the actual market conditions. This can often be surprising when a vendor brings you a large price increase and you find out through an RFQ that the actual increase should have only about half of what they told you if not less.
Hopefully this helps you see that you do still have options and that SafeSourcing will be your partner to manage the project from end-to-end to help keep you on track. We’d love to hear from you if you have any other specific concerns outside of what we focused on here. If you would like more information on how SafeSourcing can help your procurement efforts, or on our Risk Free trial program, please contact a SafeSourcing Customer Service Representative. We have an entire team ready to assist you today.