Thank you for great response to my blog; a great spectrum of opinion and questions
My writing is based on personal experience where I have seen significant savings achieved. My comments are based on achieving these savings by staying with the same supplier and maintaining the same levels of service and quality. There are many techniques that can enable savings that work to the mutual benefit of the supplier and customer. You don’t need to be a giant to better your price competitiveness.
I am not talking about an insurance model of less for less. I believe in total cost of ownership concepts and do not advocate compromising important elements like quality in a price negotiations. Through FREEBENCHMARKING.COM, I see huge price variations across companies buying the same thing. I see both big and small companies paying too much.
It’s very true; the component pricings are going high. During the recession period, they had followed a fair pricing policy based on cost to cost, with marginal profit. Now the same components are selling with a higher price. I think now they had not following any fair pricing policy or instead of cost to cost pricing policy, they are using the demand policy. So when demand is high they are raising the price for making advantage for the better dealings. It’s like “sailing along the wind direction”. That is, since demand is more, they know anyhow the manufactures have to buy such components, so they are fixing a higher price. If demand is less then they lower the price for more sales. It’s all different business strategies.
There are alot of software vendors out there to help with component pricing. To name a a few, Demandtec and Servigistics have advanced pricing optimization techniques and market adaptive business logic to parts business.
Unless you happen to be an Apple, HP or Nokia, understanding one's positioning with Key Suppliers is the first step in optimizing the total acquisition cost.
Simply having a target price to base negotiations on without understanding you're position in a supplier's pricing strategy will not producr sustainable results.
§Achieving low acquisition costs long-term requires good planning, proven tools, an understanding of current market conditions and pricing, and highly-developed negotiation skills,
From my understanding, many companies are capable of calling the shots. Though it seems to be the over whelming number of these companies are the large ones with plenty of purchasing power. I don't know how well this would work for the smaller companies. Are these companies going to be the ones standing at the pumps paying full price? Or paying less for something that isn't exactly what they were hoping for?
Most of my familiarity with this kind of concept is "you can get this much for this price"--in other words, if you tell your insurance company what you're willing to pay, they'll have you cherry pick the various services and coverages to meet that price. My guess is you invariably have to give up something to get something. Is this a similar model, or does it work differently in the component world?
EBN Dialogue enables and encourages you to participate in live chats with notable leaders and luminaries. Not only editors and journalists, but the entire EBN community is able to comment and ask questions. Listed below are upcoming and archived chats.
Archived Dialogues
Thailand Stages a Comeback Join EBN contributor Jennifer Baljko on Thursday August 23, 2012, at 11:00 a.m. EST for a live chat on how electronic manufacturers in Thailand have shored up their supply chain to reduce the impact of future natural disasters.
Euro-Crisis: What It Means for High-Tech Firms Join EBN Editor in Chief Bolaji Ojo and Contributing Editor Jennifer Baljko on Thursday, July 12, at 10:00 a.m. EDT for a Live Chat on high-tech and Europe's economic difficulties.
Microsoft Surface: Potential Winners & Losers What are the implications for the electronics industry supply chain of Microsoft Corp.'s decision to launch its own tablet PC? Join industry veteran and EE Times' systems and OEM expert Rick Merritt on Tuesday, July 3, at 12:00 pm EDT for a Live Chat on this subject.
Join EBN contributor Jennifer Baljko on Thursday August 23, 2012, at 11:00 a.m. EST for a live chat on how electronic manufacturers in Thailand have shored up their supply chain to reduce the impact of future natural disasters.
Peter Drucker famously said "Trying to predict the future is like trying to drive down a country road at night with no lights while looking out the back window." Yet in the razor's-edge world of electronics—with a lean supply chain and just-in-time demands—the need to know the future is vital.
While no one really can accurately predict the future, we can take guidance from another Drucker saying which is the best way to predict the future is to create it.
You've heard the saying "the No. 1 supply chain risk is your people." That hasn't always been the case. But today's complex global supply chain requires a new type of multitalented employee. It's one who understands, finance, marketing, economics, is savvy with technology, graceful with relationships and can think analytically.
Where are these people? Are universities properly preparing the next generation supply chain professionals? How do train your existing workforce for these new, demanding positions?
Brian Fuller, editor-in-chief of EBN, will lead a 60-minute Avnet Velocity panel discussion that will ask and answer these and other questions swirling around today's supply-chain talent challenges.
To save this item to your list of favorite EBN content so you can find it later in your Profile page, click the "Save It" button next to the item.
If you found this interesting or useful, please use the links to the services below to share it with other readers. You will need a free account with each service to share an item via that service.
Tweet This
