Turn Your Suppliers into Cost-Cutting Allies

Procurement groups have played a key role in meeting their companies’ ambitious cost-cutting targets over the past several years.  Through recurring negotiations with suppliers, buyers have achieved repeated discounts.  But as deals with suppliers have matured, negotiators are finding it increasingly difficult to replicate earlier wins.  As buyers face continued pressure from their companies to continue to drive down costs, they are increasingly resorting to high-pressure tactics to squeeze more concessions out of suppliers.

For some companies, this zero-sum approach continues to deliver the goods (at least for now), but for many, such tactics are failing.   A less adversarial approach is needed, one that views suppliers strategically, as valuable assets of the extended enterprise rather than merely cost centers.

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Sourcing & Supply Management, Featured