Ten Tips to Save Time & Money Revisited

In 1999, I facilitated an online study group of purchasing professionals studying for the Purchasing Management Association of Canada's C.P.P. exam. During our online discussions, I created a thread asking about 'your most important lesson learned' from starting in purchasing/procurement/inventory/quality through the certification process. To get through the educational and experience requirements took some people 4 years, some the maximum 15 years, but many of the lessons learned were very similar. Based on the discussion, my experiences and further research, I presented a top 10 tips for small businesses at chamber and business meetings. This subsequently became an article in Canada's HomeBusiness Report magazine (published in 2000) called "Power Purchasing: Top Ten Tips to Save Time & Money". (The magazine now appears to be history itself).

I ran across my extra copies of the issue and letter from the publisher the other day. I thought, perhaps I should revisit this topic, see if things have "changed" in 9 years. Maybe revisit it from the angle of asking the new set of C.P.P. candidates about their most important lessons learned. Right now I sit looking at this list and wonder if it might be written differently in light of the economy.

1) Set an objective - more efficient than random cost-cutting.
2) Don't Allow Personal Feelings to Interfere - consumer buying differs from professional - in light of the economy, letting emotions guide the spending of taxpayers/shareholders money could mean losing your paycheque!
3) Clarify What You Need and Don't Assume Anything - it costs more to replace/change something that was misunderstood than to clarify needs (specifications, terms, price, delivery, quality).
4) Rank Your Purchases by Volume - Pareto's Law and ABC analysis - make the most of your time.
5) Competitive Bids - solicit competition, but not each and every little thing - consolidate volume or basket of goods to make it 'worthwhile' to compete and solicit proposals then....
6) Partner with your Vendor
7) Buy What You Need - a bargain isn't a bargain if you are buying qty that requires holding longer-term inventory (consider the associated holding costs).
8) Standardize
9) Reduce Small Orders
10) Be Creative

I still like these tips, albeit experiences over the last 9 years have added new dimensions to each. In future blogs we'll compare the "old" with some "new" interpretations for each tip.