Executive Briefings

Build a Competitive Supply Base, Not a Competitive Buying Process

Though the "invisible hand" of competition remains the linchpin of capitalism at a macro level, supply management professionals need to employ a more visible competitive approach focused on building the right supply base. Competition within the wrong supply base does not produce the lowest cost or prices; in the worst case, it can yield supplier bankruptcies, which put the supply management organization at risk. The most effective companies build a competitive supply base, not simply a competitive buying process. The latter is fairly straightforward; the former requires real skill. 

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Though the "invisible hand" of competition remains the linchpin of capitalism at a macro level, supply management professionals need to employ a more visible competitive approach focused on building the right supply base. Competition within the wrong supply base does not produce the lowest cost or prices; in the worst case, it can yield supplier bankruptcies, which put the supply management organization at risk. The most effective companies build a competitive supply base, not simply a competitive buying process. The latter is fairly straightforward; the former requires real skill. 

Read Full Article