Businesses have become more aware of the importance of purchasing, especially type C purchases, on their profitability. Changing attitudes and technologies have had a major impact on the nature of the purchasing function. Today, it is no longer simply a question of finding the best prices, it is necessary to create a long-lasting and efficient relationship for an ever greater cost control. The Cost Killer is dead, welcome into the Business Partner era!
Cost Killer, Business Partner: what’s the difference?
The Cost Killer is a buyer whose mission is simply to optimize costs by finding the best prices. Until now, all you had to do to be a good purchaser was to know how to put a good level of pressure on it. But times have changed. Today, we no longer refer simply to hard skills. Soft skills are gradually becoming more and more important in the definition of a good buyer. This means that beyond his training, the buyer must develop major skills (flexibility, pedagogy, initiative, communication, etc.). Forget the Cost Killer who could do a one shot. Today, the buyer has become a real Business Partner who envisages a long-term relationship with his suppliers. He must be a real chameleon capable of adapting to markets and professions. He must be at the same time buyer, project manager and manager, to gain in efficiency and credibility.
Business-Partner: co-construction of a sustainable relationship between partner, customer and suppliers
As we were telling you, the role of the buyer has changed. The Cost Killer, no matter how efficient, forgets one essential aspect: the relationship. His objective is to lower the cost of a company’s purchases. But he lacks long-term vision. We are in an era of collaboration, of sharing information. The Business Partner creates a reliable and durable network on which he can rely to do the best business. A true manager, he knows how to adapt to all businesses and find the most relevant markets for his clients by having a broader vision.
Thus, beyond this desire to build real partnerships, the Business Partner opens up to the world. The outsourcing of purchasing allows to address experts whose core business is purchasing and who have the skills and time to create efficient networks. Many of them have chosen to set up in various countries to master the local culture and language in order to facilitate transactions. They make up for the lack of expertise in purchasing departments and bring real added value.
Whereas the Cost Killer simply dealt with the cost and delivery time, the Business Partner has to deal with quality and risk management in addition. When outsourcing its purchasing, to ensure that it is working with a reliable partner, the company will then be happy to turn to an ISO 9001:2015 Business Partner. This certification is a real sign of confidence and guarantees a continuous improvement process, as well as an international outlook and formalised processes.
If the buyer’s business is evolving, it is also thanks to new technologies. The purchasing function is becoming digitalized to offer the Business Partner infinite possibilities for finding the best prices. In this way, the Business Partner can nowadays automate processes and save precious time. This time can then be reused to negotiate and build relationships with partners.
If the Cost Killer finds low prices at a given moment T, the Business Partner is playing fortune-teller. The tools at his disposal allow him to have a past and future vision of the markets, to better anticipate, and therefore, to buy better. By having the best tools at his disposal, he can perform predictive analyses to know when it will be the best time to buy.
Outsourcing Class C purchases to the Business Partner: a winning option
Small industrial equipment, furniture, office supplies, tools… Class C products, i.e. non-recurring and non-strategic purchases, are an interesting category to outsource. Indeed, while these small purchases represent on average 5% of a company’s purchasing volume, they account for 60% of the volume of orders and 75% of the number of suppliers. Unlike class A and B purchases, which are generally well controlled, class C purchases are not subject to any optimization. Opting to outsource these particular purchases allows companies to reduce their costs and increase efficiency.
Choosing to outsource means greater flexibility. It is also a relevant way of concentrating teams on their core business, i.e. strategic purchasing. You optimise your internal processes while delegating a specific function to an expert. A time and cost saving!
Outsourcing its purchases is a solution that is now unavoidable for many companies who wish to focus on developing their market. However, the choice of service provider should not be made at random. You need to find an expert who is able to plan for the long term, to be really involved in your project and to be able to adapt to changes in the business. Forget about the Cost Killer and opt for a Business Partner capable of bringing real added value to his function. This player will enable you to control your purchasing policy in the long term.