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Suppliers and VendorsAs much as I personally dislike unsolicited sales calls, I also recognize that suppliers and vendors have been a vital element of every organization I have worked for and with. It's a competitive world and we need the support and innovation that existing and new suppliers bring. They can help keep us on the leading edge. I worked with a company that was suffering from severe cash flow problems. Their historical approach had been to hammer on their suppliers for lower prices and to pit one against the other in bidding wars. The suppliers were not happy and the company was not meeting its goals. I suggested a different approach that has worked very well for many companies around the world. Instead of an adversarial approach, I suggested one of disclosure and cooperation. The suppliers were told what the issues and opportunities were and asked for their advice. A few suppliers rose to the occasion. They offered new products with features that better matched what we needed and delivery plans that allowed us to reduce inventories significantly. The company freed up cash from inventory and saved money on what it did buy. Those suppliers that could provide training & technical advice were also sought out. The company concentrated more of its business with fewer suppliers who then had a more stable customer relationship. It was a classic example of a win-win solution. Look at current and future suppliers and vendors as partners. Select those that are willing and capable of being part of your supply team and work together for better solutions.
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Cost Reduction & Profit Improvement
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