Nathan Joyes | Monday, October 22. 2012
Whether I am speaking with the executives from a buying group, cooperative, or franchise system, the greatest need for any group purchasing organization seems to be information. Without good information about what the members are purchasing from suppliers, it is very difficult for head office to manage performance targets, reconcile rebates and negotiate the best purchasing discounts for the group. As important as it is, timely and accurate purchasing data has been surprisingly elusive for many groups. Purchasing data supplied by members and suppliers is out of date or inaccurate at best, and intentionally manipulated in the worst cases. Top-notch purchasing data is truly difficult to achieve as an end unto itself, but it comes for free if you follow the golden rule of group purchasing.
So, what does it mean to ‘do unto others as you would have them do unto you’ for group purchasing organizations? Both suppliers and members are interested in reducing administrative costs and improving inefficiencies. When groups focus on meeting those needs of their partners using electronic transactions, it lubricates the entire supply chain, but there is another wonderful bi-product: head office is blessed with all the purchasing data they ever wanted.
So, for those head office executives seeking accurate data and detailed reports, I am going to challenge you to focus first on using electronic transactions to create value and develop new efficiencies for your suppliers, as well as members… stay tuned to my next couple of blog posts to learn how!