Purchasing Strategies Companies Use to Stay Competitive in Their Industries

532 Words3 Pages
For a business to stay competitive in today's world, it is very important to come up with strategic business advantages that would give them the necessary edge over their competitors. More often than not this strategic, competitive advantage is driven by effective purchasing decisions from a group of vendors who understand the importance of delivering quality goods on time and at mutually agreeable terms. Whether a business decides to go ahead with a single procurement strategy focusing on a single vendor, or centralize the purchasing to drive procurement savings, or make use of the procurement auctions to get best pricing, the main objective behind these purchasing strategies is to get a cost/benefit leverage & get quality supply on time to get that competitive advantage. Some of the purchasing strategies that allow businesses to stay competitive in their industries are Supplier Optimization It is very important for a business to identify the most effective vendors with best prices and mutually agreeable terms. Any supplier who is not able to meet the required parameters of quality, quantity and time is going to create problems for the entire supply chain. Hence creating a pool of suppliers that are reliable, cost effective, offer quality products in desired quantity and time is essential for the success of an organization's entire supply chain. Total Quality Methods Quality control tools like six sigma ensure that vendors provide the desired quality of products and services with minimum errors. Such tools are essential for ensuring the quality of the supplied goods and in turn smooth movement of products across the supply chain. Risk Management With global sourcing, businesses are faced with hordes of options when it comes to procuring supplies from countries with best cost advantages. But such cost advantages are often accompanied by disasters that

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