The Seven Deadly Sins of Purchasing
Sin #1 - Not being engaged in the purchasing profession.
This is the worst sin that a purchasing professional can commit. It's right up there with sloth. Being engaged means many things--it includes actively seeking out and attending purchasing training, obtaining your purchasing certification, networking with other purchasing professionals, reading periodicals covering the purchasing profession, buying and reading books on negotiations (hint, hint), seeking to understand the commodities you source, or pursuing a master's in a purchasing-related discipline. Who said that rightousness was going to be easy?
Sin #2 - Using the vendor's contract.
Using the vendor's contract is a most eggregious sin. In fact, those who commit this sin aren't worthy of calling themselves purchasing professionals. Why? Because it's your responsibility to protect your employer! You can't do that using the vendor's contract. Always, always, always try to use your contract template. You may not always be successful, but if you have an 80% success rate of using your contract template versus the vendors', you're bordering on world-class. Don't have your own contract templates? Buy or build them--NOW--before the world ends!
Sin #3 - Permitting maverick spend.
If, as a purchasing professional, you permit substantial maverick spend, you may be struck down for your sin--by your boss. Why does your boss need you if everyone's doing their own purchasing? Get your customers under control. There's nothing worse than customers who think they know better when it comes to purchasing. Those are the customers that will end-run you, and contract directly with a vendor. That creates tremendous risk for your employer, and, needless to say, additional cost because the customer doesn't really know better. Either by policy or friendly persuasion, get maverick spend under control or you'll turn into a pillar of salt.
Sin #4 - Not managing your vendors.
Vendors can be seductive in their ways. Don't stray from the enlightened path and keep an arm's length from vendors. Remember, temperance is a virtue, greed is not--so decline those fancy invitations that vendors tempt you with. Ensure that vendors know the processes that they should follow and the communication protocol they should adhere to. It is important for vendors, for example, to know that discussing price and term details of a purchase with a customer is verboten.
Sin #5 - Using an RFP for competitive bidding.
Using an RFP is a sin? Sacrilege, say you! But using the selection / negotiation RFP competitive bidding model is a sin. That's where you issue an RFP, select a finalist, "award the contract," and then begin negotiations. Hello, you're doing it wrong--that's called "begging," not competitive bidding. Use the negotiation / selection model, where you pre-negotiate with multiple finalists via best-and-final-offers before you award the contract.
Sin #6 - Providing budget, project schedule, or an org chart to the vendor.
This is also called the sin of "babble mouth." Do really think that giving budget, project schedule / criticality, and organizational information to a vendor is going to advantage you in a negotiation? If you're asked for this information by the vendor, don't bite that apple. Instead, turn the tables on the vendor. If the vendor asks what the budget is, say you'll be more than happy to provide that information as soon as the vendor tells you their cost (and proves it).
Sin #7 - Not promoting the value of purchasing.
Permitting a sin to be committed is a sin in itself. If you work for an organization that doesn't invest in you or your purchasing department, you must first show your organization the errors of their ways. Help your management to understand the value that the purchasing function brings, turning mere purchases (water) into direct contributions to the bottom line (wine). Training, headcount, and automation are just a few of the things an employer can toss into the offering plate. If that doesn't work, go to the light of monster.com!
This is the worst sin that a purchasing professional can commit. It's right up there with sloth. Being engaged means many things--it includes actively seeking out and attending purchasing training, obtaining your purchasing certification, networking with other purchasing professionals, reading periodicals covering the purchasing profession, buying and reading books on negotiations (hint, hint), seeking to understand the commodities you source, or pursuing a master's in a purchasing-related discipline. Who said that rightousness was going to be easy?
Sin #2 - Using the vendor's contract.
Using the vendor's contract is a most eggregious sin. In fact, those who commit this sin aren't worthy of calling themselves purchasing professionals. Why? Because it's your responsibility to protect your employer! You can't do that using the vendor's contract. Always, always, always try to use your contract template. You may not always be successful, but if you have an 80% success rate of using your contract template versus the vendors', you're bordering on world-class. Don't have your own contract templates? Buy or build them--NOW--before the world ends!
Sin #3 - Permitting maverick spend.
If, as a purchasing professional, you permit substantial maverick spend, you may be struck down for your sin--by your boss. Why does your boss need you if everyone's doing their own purchasing? Get your customers under control. There's nothing worse than customers who think they know better when it comes to purchasing. Those are the customers that will end-run you, and contract directly with a vendor. That creates tremendous risk for your employer, and, needless to say, additional cost because the customer doesn't really know better. Either by policy or friendly persuasion, get maverick spend under control or you'll turn into a pillar of salt.
Sin #4 - Not managing your vendors.
Vendors can be seductive in their ways. Don't stray from the enlightened path and keep an arm's length from vendors. Remember, temperance is a virtue, greed is not--so decline those fancy invitations that vendors tempt you with. Ensure that vendors know the processes that they should follow and the communication protocol they should adhere to. It is important for vendors, for example, to know that discussing price and term details of a purchase with a customer is verboten.
Sin #5 - Using an RFP for competitive bidding.
Using an RFP is a sin? Sacrilege, say you! But using the selection / negotiation RFP competitive bidding model is a sin. That's where you issue an RFP, select a finalist, "award the contract," and then begin negotiations. Hello, you're doing it wrong--that's called "begging," not competitive bidding. Use the negotiation / selection model, where you pre-negotiate with multiple finalists via best-and-final-offers before you award the contract.
Sin #6 - Providing budget, project schedule, or an org chart to the vendor.
This is also called the sin of "babble mouth." Do really think that giving budget, project schedule / criticality, and organizational information to a vendor is going to advantage you in a negotiation? If you're asked for this information by the vendor, don't bite that apple. Instead, turn the tables on the vendor. If the vendor asks what the budget is, say you'll be more than happy to provide that information as soon as the vendor tells you their cost (and proves it).
Sin #7 - Not promoting the value of purchasing.
Permitting a sin to be committed is a sin in itself. If you work for an organization that doesn't invest in you or your purchasing department, you must first show your organization the errors of their ways. Help your management to understand the value that the purchasing function brings, turning mere purchases (water) into direct contributions to the bottom line (wine). Training, headcount, and automation are just a few of the things an employer can toss into the offering plate. If that doesn't work, go to the light of monster.com!
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