Beyond placing orders.
WHAT IT COVERS
Deciding what to buy Choosing who supplies it Agreeing terms Managing performance Deciding whether to continue
WHY IT MATTERS FINANCIALLY
In most businesses, bought goods and services are the largest cost after people.
WHAT THAT IMPLIES
A modest improvement in buying affects profit more than a large increase in sales.
WHY
Every unit saved goes straight to profit; a sale only contributes its margin.
WHAT POOR BUYING COSTS
Paying more than necessary Quality that produces rework Delays affecting delivery Dependence on suppliers who know it Contract terms that expose you
WHAT GOOD BUYING IS NOT
Always choosing the cheapest.
WHY
The cheapest frequently costs more once failure, delay and rework are counted.
WHAT TO COMPARE INSTEAD
Total cost of ownership.
WHAT THAT INCLUDES
Purchase price Delivery Installation and setup Training Running costs Maintenance Expected life Disposal or exit
WHAT TO ESTABLISH BEFORE ANY SIGNIFICANT PURCHASE
What you actually need, as opposed to what was requested.
WHY THAT DISTINCTION
Requests are frequently for a specific product when the need is broader.
WHAT THAT OPENS
Alternatives that may serve better or cost less.
