The Nature of Purchasing by Unknown

Author:Unknown
Language: eng
Format: epub
ISBN: 9783030435028
Publisher: Springer International Publishing

Example 4: Sourcing of Chemical Product

Within the digital printing industry, the purchasing manager was given the task to source a chemical product, while saving costs. This chemical product was seen to have high financial impact and high supply risks, and as switching suppliers was not easy. The main cost savings were seen to be generated if Supplier A could take over the product volume of Supplier B. However, the R&D function needed to approve Supplier A to be capable of supplying the product of Supplier B with the same quality. The problem was that the R&D function did not have enough financing resources to approve Supplier A. First, the purchasing manager started to change the question asked to the R&D function from “why is it not possible?” to “when is it possible.” R&D perceived this question as less offensive and thus people started to think in a “creative way.” The solution resulted from this approach was in the end having the Supplier A paying for the R&D and once the product of Supplier A was approved, the company would pay back the supplier. This “new financing model” was seen as a creative solution to tackle the problem of financing.

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