• Mark Amphlett

A 'How To' Guide for times like this!

Concept: The country is in crisis right now, as is the whole world. Already we are seeing this crisis play out in terms of lack of supply and resources. Ventilators in hospitals are needed urgently in their thousands and the government has turned to the manufacturing sector to help with this. However, this is not as straightforward as just switching on the machines. Materials, parts and components need to be sourced and some of these themselves will need to be manufactured. Machines need to be set up properly and the right training afforded to the staff operating them. Quality testing needs to be in place, etc. This is just one example.

The country has run out of toilet roll in most supermarkets and stores, among other goods. This should right itself over the coming weeks we hope, but manufacturers and logistics companies are now working flat out to cope with demand due to panic buying.

How do we keep manufacturers in key sectors in particular operating when there is a global shut down on aviation and other forms of transport? How can we switch to sources of supply for materials, parts and components, and how do we manage that supply chain effectively.

This will be a "How To" guide for manufacturers who are trying to cope with keeping factories open and demand met in key industries - food and beverage, pharma, logistics, med tech, etc.

Below is Mark Wood's information for this guide.

An outline of an “How to guide” which we can socialise!! I have also put some potential sound bites at the bottom which can be used/tweaked as appropriate

1) Know what it is you want and make yourself and attractive long term customers. a) What, how many, how often, how much (yearly spend) and future forecast usage

b) How long would you like to establish a relationship for? i. What type of relationship would you like?

c) What service and support do you expect? d) Which business stakeholders need to be involved?

2) Who could supply? a) Research the market i. Use your networks/membership organisations ii. Internet iii. Trade associations iv. Talk to others

b) Current suppliers? c) Known others?

3) Ensure they have the capability a) Delivery performance b) Quality performance c) Accreditations d) Financial strength e) Technical capability f) Relationship management

4) Terms of business a) Work on your terms and not there’s b) What is important to you in those terms?

5) Assess each supplier and measure/score performance a) Identify the gaps to your requirements b) Make sure you have credible evidence to support the scoring!

6) Negotiate with suppliers around the gaps identified a) Give every supplier a chance to meet the success criteria you have set i. Negotiate capability ii. Negotiate terms of business

7) Set a time limit for their response to suit your requirements a) How much will it cost? b) Once a supplier’s capability has been established discuss costs c) Make sure you know the hidden costs d) What will your strategy be? e) What is your Most Desirable Outcome (MDO) f) What is the Least Acceptable Agreement (LAA)

8) What is the Best Alternative to a Negotiated Agreement (BATNA) Select the best overall supplier

Even when there is an urgent need, just sourcing a product or service with someone can lead to other problems if due diligence has not been done. You could jump out of the frying pan and into the fire! Don’t do something for doing somethings sake, even if urgent!

Sometimes cheap is not best as they have a poor delivery or quality performance, sometimes most the expensive can be over specified or does not deliver the same value for money as a cheaper alternative.

Always leverage your position, ensure there is a genuine competitive negotiation and consistently think of being able to manage a long-term collaborative relationship.

Effective procurement for your competitive advantage


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