After decades of rapidly increasing the amount of sourcing in Asia, U.S. manufacturers are accelerating efforts to reduce costs and shorten their supply chains by “nearshoring” to Mexico. There are three main drivers that are bringing urgency to this issue and one little known reason why the time is right for expanding your supply base in Mexico. Driver 1: Supply Chain Challenges Covid-19 related supply chain challenges have resulted in unprecedented impacts to cost and time related to … [Read more...]

2022 is starting off with a significant Covid surge, once again impacting the daily routines of many.  Time will tell how badly manufacturing and logistics will be affected, and how much delay this will add to supply chains recovery from the prolonged disruptions of 2020/2021.   Purchasing organizations have been consumed by the urgent demands of ensuring supply to keep factories running. For most, strategic cost savings has been deferred along with everything else that does not get … [Read more...]

As a buyer or a seller, one of the most difficult negotiations is a price increase request.  Despite the difficulty, there appears to be a lot of it going on in the marketplace.  Whichever side of the negotiation table you are on, we are seeing success from the side that outperforms the other in two key aspects of negotiation:  Preparation  Active Listening  Preparation – Successful negotiations are built upon Preparation, Power and Aspiration.  Preparation is the most important … [Read more...]

Cost models provide buyers with valuable benchmarks to validate supplier pricing. Used effectively, they help drive optimal design, reduce the time required to bring products to market and help companies succeed. When it comes to understanding supplier cost structures, I admit that I am biased. After all, understanding supplier cost structures was what started my career in procurement. Ford Motor Company sold me on the idea. In 1984, the country was emerging from a recession after a long … [Read more...]

“I want everybody to have the same experience that we had because it was really a good experience and a good savings for us working with APD.” The recent retirement of an APD client spurred an interesting conversation.  The Vice President of Purchasing and Supply Chain at a plastics packaging manufacturer turned to APD for help in achieving cost downs on resins in 2019.  Hearing of his impending retirement, we reached out to him to get his perspective on the Resins Optimal Sourcing project we … [Read more...]

The global economy is undergoing a Digital Transformation at record pace.  Declining costs in bandwidth, storage and computing enable organizations to optimize, connect and model data to improve decision making and to drive results. Whatever the experts call it:  Industry 4.0, Digital Economy, Internet of Things, Harnessing the Power of Artificial Intelligence and Machine Learning – its potential can help purchasing organizations ensure that they are buying at optimal cost levels, from … [Read more...]

In whack-a-mole a person hits the mole forcing it down only to have it pop right back up in another location.  In quotation whack-a-mole buyers push on an area of supplier costs to get pricing to go down only to have costs pop-up in another area bringing prices up as well.  Buyer and suppliers continue this game through multiple rounds of quotes on each piece of business to be awarded. So, what is the alternative?  We recommend that buyers stop playing the game altogether and instead … [Read more...]

Expectations are that hard hit manufacturing sectors will see improving revenues in 2021, although how quickly improvements will come is greatly dependent on the world’s ability to rebound from the ongoing covid surge.  With little control over revenue growth amid a global pandemic, company leaders are looking to their purchasing teams to aggressively drive cost savings. Manufacturers looking to aggressively drive cost savings should: Take a deep breath before cutting purchasing … [Read more...]

Over the past 16 years we have looked at hundreds of commodity strategies. Most often the strategies are contained in long PowerPoint presentations designed to demonstrate how well the supply base is aligned with the company’s long-term strategies. Almost all provide good analysis of the size, shape and form of the supply base that is required to support their company’s future demand requirements. Most identify the expectations suppliers need to meet in support of quality, technology and … [Read more...]

   Attend our New Cost Management Certification Program  - a 4 Month Development Program for new buyers seeking essential skills and experienced buyers seeking cutting edge techniques to success Click Here to Download our Brochure I have always thought that good buyers transition into good managers and finally good leaders.  What characteristics do good buyers have that make them good leaders?  Here are a few: They ask good questions. “Judge a man by his questions … [Read more...]