With approximately 20 years of Purchasing experience, I’m in a position to share Purchasing expertise for direct material under the form of consulting service. The ultimate goal here is to implement tools which result in Cost Reductions and / or Cash Flow Improvements at my client.
To start, together with my client I go through an analysis of my client’s current purchasing “snapshot” : purchasing spend analysis, supplier performance, current price levels, current payment conditions & incoterms, contractual situation with supply base, etc.
After this analysis – and after having done a market study of the raw material(s) in question – as outcome I offer a suggested list of next steps. This typically includes recommendations on :
- Supplier rationalization
- Establishing a maximum number of suppliers to buy from
- Negotiation strategy short term & mid-term : how to increase Purchasing leverage
- Supplier classification / rating system
- Targeting partnership status with a small share of suppliers
- Contractual next steps towards the Supply Base : end contracts / renew contracts / alter contracts
- Cost Breakdown analysis & definition of “Best In Class” cost level
- Currency risk management : evaluation of possible currency clauses, and their pros & cons
- Supplier Financial Health analysis
- Purchasing strategy short term & mid-term : with which supplier to increase / reduce spend
- Practical methods to extend payment terms
- Practical methods to reduce inventory / working capital
Module 2.2 goes a step further than module 2.1. In module 2.2, I actively represent my client during purchasing negotiations with their suppliers.
Together with my client, the negotiation strategy & commercial objectives are carefully prepared. Also, in alignment with my client it’s agreed who takes the lead in the negotiation meetings: myself (my client supports), or my client (I support), or both at equal level.
After that, the negotiation meetings with the suppliers are scheduled and take place – in as many negotiation rounds as needed – during which I actively negotiate in my client’s interest with the suppliers. I typically feel as a fish in the sea, as this is what I’ve done during big part of my career.
In short : In this module I act as Purchasing agent, just at “the opposite side of the table” compared to my Sales services.