The Importance of Relationships

I started to write a blog on procurement systems and beliefs, it started out with discussing educational practices with real world scenarios. The truth is that you can not capture these types of systems with a catch all practice. The truth is that procurement teams at WalMart must have differing systems then we do at OSTP. The truth is we are impacted by industry, materials, size and scale and other factors.

One thing that I would argue though for all companies is the importance of relationships. Relationship is a four letter world in supply chain studies as the fear that someone will make poor choices and cost the company dollars for the sake of buying from a friend. In truth this does happen but that should be called what it is…lazy buying.

A good purchaser will do some specific things which is maintain metrics to measure the effectiveness of the vendors and against competitors. They will forecast to minimize any excess stock or shortages that can cause disruptions in the process. They will also maintain strong relations with their supplier.

These relationship will provide the supplier information to adjust their planning to support your companies growth, assist in times when needed and provide industry feedback that is valuable when gauging against against competitors. These relationship are work and if not maintained properly can be lost or used against the organization but if worked at by a strong purchaser they are as good or stronger than any system you put in place.

Cheer,

Lorne