It's been a long time since I dipped into Shakespeare - the last time was when studying Romeo and Juliet 35 years ago. So I surprised myself last week by reading one his most famous works - Twelfth Night. I stumbled upon a quote which resonated, and from which triggered the theme for this article. It was a quote from Orsino, when he says "I myself am best when least in company."
Like Orsino, many companies remain "least in company" when it comes to how they approach their purchasing. Why is this? After all, it's not as if their entire business strategy is to be isolationist; companies are increasingly collaborating with third parties when it comes to the front end of business - R&D and business development. Third party collaboration often happens when tendering, or to innovate without the need to develop new skills in-house, or to beef up resources to ensure timely service delivery.
But yet on the supply-facing, purchasing side of business, too many companies stick to a strategy of 'splendid isolation.' They don't reach out to third parties to benchmark the value they're receiving from their suppliers and so can only assume that they've secured optimal value for money. They don't join forces with other organisations to boost their buying power and make themselves more attractive collectively to the supply base (i.e. to create economies of scale). So buyers are locked into a cycle of trying hard with their limited spend to negotiate lower prices, or at least to mitigate price increases. Unsurprisingly this approach makes it difficult to move the dial in terms of total cost savings.
It doesn't need to be this way. The most insightful purchasing managers understand that being open to third party collaboration will ultimately make their company more attractive as a client. This includes encouraging external, independent supply value benchmarking to optimise value for money. How best to do this? We built BSA Buying Group for this very purpose, to provide purchasing managers with the ability to independently benchmark prices and service levels. They take advantage of our buying power to deliver on average 10-35% cost savings. It also frees up their time to focus on more challenging core supply chains where the risks and value is greater.
So break out of splendid isolation in your purchasing approach and great things will happen! Open your mind to collaboration and reflect on the words of Hamlet: "We know what we are but know not what we may be!"
by M Roper | 29 October 2019