Procurement professionals are always striving to not only make better decisions, but to make them more rapidly. The level of intelligence purchasing departments can attain on precisely where supply chain risks lie, as well as on the most cutting edge solutions to dealing with them, will dictate how successful they are in reaching these goals. According to Spend Matters, as supply chains become increasingly global, the possible threats become more and more of a moving target.
One of the biggest challenges purchasing professionals are met with every single day is locating enough resources to meet the demands of the job. It seems like procurement is being asked to do more and more each passing year, causing it to further stretch the resources it currently has at its disposal. Buyers are then forced to come up with creative and innovative methods to corral this predicament. Some of the savviest procurement professionals will tell you, the easiest way to get some much needed help is to join a group purchasing organization.
Strategic sourcing can make or break your business and finding the right suppliers will require research, meeting with the vendors, and even a certain amount of trial and error. In order to foster the best strategic sources more quickly, there are some general steps that will outline the path to follow:
Indirect goods are a great place to make cost saving transitions for your company. Suppliers vying for your business by offering you a better deal are pretty easy to find. They may even allow you to keep the same brands you are currently using. But don't forget about the organizational impacts when engaging in this type of transition.
Sometimes, it pays for competitors to set the rivalry aside and work together for mutual advantage. By joining forces as part of a buying group, competitors within an industry can produce greater results for their customers without any fear of ‘falling behind’ in the process. Every Member of the group can excel within the industry without giving the competitors they work alongside an unnecessary leg up. Skeptical? Let’s first discuss how a buying group works, and then hit four key short and long-term benefits buying groups can offer businesses that choose to operate together.
What is a Buying Group?
Before we talk about the way competitors can work with opposing businesses and still come out ahead, we need to discuss what a buying group like Prime Advantage is and how it works. Buyers within an industry team up via Prime Advantage to gather purchasing power, and in return for this market share, suppliers are able to put together a better deal for the Members. On the other side of the table, due to limited competition on the supplier side, as well as valuable feedback from the buying group, suppliers shape themselves into stronger, more effective, increasingly flexible partners. Buyers benefit from added negotiating power; suppliers gain from additional access and intelligence to potential customers. So how do the different advantages stack up?