A friend just sent me a link regarding the west coast dockworkers contract that expires in June.   The expiration brings with it the risk of a strike or lockout which would close west coasts ports and add to an almost unbelievable string of chaotic events that have been impacting global supply chains.   For the past few years, we have been living in a world of chaos.  Inflation, shortages, and geopolitical risks have all risen to levels not seen since the … [Read more...]

Industry Discussions on Nearshoring to Mexico Over the past few weeks, APD hosted 15 manufacturing executives and purchasing leaders in a series of small group Executive Roundtables to discuss best practices related to nearshoring to Mexico. Some of the more interesting discussion points are summarized below. Vice President of North American Purchasing for a sunroof manufacturer shared that they have found Mexico has a very competitive business case for “best cost country” when considering … [Read more...]

Purchasing Departments are accelerating Digital Transformation efforts in 2022 to escape the pitfalls of conducting business with excel, eliminate the clutter, organize their data, and ultimately become more efficient.  Given the last 2 years with COVID, Digital Transformation in purchasing has become an essential hot topic, however in 2022 there’s a new twist:  Purchasing Departments are not seeking quantum transformational leaps, rather they are opting for small incremental steps that deliver … [Read more...]

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 … [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...]