Smart-Purchasing.com: Best Practices: Checklist

Best Practices: Supplier Development
Dispatch buyer improvement teams

Traditional	Best Practice
Ask for price concessions. Work with supplier in arms-length teams. Meet intermittently.	Selectively send buyer-sponsored teams to long-term, high-expenditure suppliers as process engineers/consultants.

Rationale
Facilitates cost reduction without supplier margin reduction. Leverages buyer’s operational expertise. Gets results. Note: These investments should be evaluated like any other: Cost/benefit results should be weighed against those of alternative projects across the company.
Details
A major automotive manufacturer has 40-50 purchasing professionals (about 14% of Purchasing Department) working full time on-site with suppliers as part of the supplier development program. They send associates from the purchasing support/development group to spend thirteen weeks with long-term suppliers to reduce costs and streamline their production process

Best Practice | Case Study | Commentary