Today, we are in the midst of a slow growth economy with tremendous risks and opportunities. In this context, Purchasing Executives need to have in mind the three rules for success recently identified by Michael E. Raynor and Mumtaz Ahmed:
Rule # 1: Better before cheaper. Your company cannot simply defend or expand its market position by competing on price only, it needs to offer non-price benefits such as brand, style, functionality or convenience. Purchasing can contribute to this by making the most of its value ecosystem, leveraging supplier capabilities and innovation.
Rule #2: Revenue before Cost. Creating value is not enough, companies also need to capture it by generating above average revenues through higher price or larger volume. Purchasing can leverage its network of suppliers to support revenue generating strategies and enhance market access.
Both rules call for differentiating relationship with suppliers.
Rule #3: There are no other rules… Well, maybe from an economic perspective, but companies also exist because they have a license to operate granted by society. Today this means sustainability needs to be at the forefront of the purchasing strategy to minimize risk but also to craft new competitive advantages.
This year the EIPM Annual Conference looks into Ecosystem Excellence and will explore the 5 following aspects:
• What is the role of Purchasing in a slow growth context?
• How can Purchasing support revenue generating activities?
• Where are opportunities related to supply chain sustainability?
• Supplier Relationship Management 10 years after… what have we learned?
• How can we make the most from the supplier ecosystem?