Cost savings – is that your prime objective?
This is a follow-up on this other article I posted: Objective – Cost Savings?
In every high value-adding business, mine included, there is a direct correlation between quality and price. This is a basic law of business.
I recall this situation about a year ago. I had sold a consulting package to help a client streamine his business process thereby achieving cost savings. This wise client of mine, at the first kick-off meeting, made it very clear that any cost saving cannot come at the expense of service degradation for his client. “If I really wanted to save costs ruthlessly,” he said, “I might as well just shut down this business!”
Wise, indeed. Procurement executives who go for the lowest price, or press the price of a current supplier down, without giving this action some thought and without fully understanding the sevice level degradation that his company is going to suffer because of this, is doing his company, his colleagues, and himself a grave injustice. This is true for procurement executives in almost any industry – the PR industry included. [Read: PR...paperclips or partnership?]
Beijing Trip
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