ingly difficult to achieve as your suppliers face similar predicaments themselves and operate with very little room in their margins to wiggle.

Rule #2: To affect your bottom line, using 80/20 rule, work on reasonable incentives to approach your top 20 suppliers with an

This article is one of the many articles still to come in which I will discuss very basic yet proven techniques that you could use immediately in your encounters with your suppliers.

Oh but wait, to find any value in this article, you must be a firm believer that Purchasing strategies have evolved from just 1) focusing on price and 2) focusing on quality, reliability, responsiveness and total cost to a much broader focus of building supplier relationships.

Did you know that for each $1.00 you save in your “total cost of ownership” reduction efforts, you will improve your bottom line profitability by $1.00? And did you also know that most companies do not get this concept and continue focusing their resources in all the wrong places?

Now is the time when I want to share with you 4 basic rules that have proven to work and work very well to help you create the partnership relationship with your supplier and allow them to equally benefit from the experience as well.

Rule #1: Getting direct cost savings is really a thing in the past. Getting savings has become increasingly difficult to achieve as your suppliers face similar predicaments themselves and operate with very little room in their margins to wiggle.

Rule #2: To affect your bottom line, using 80/20 rule, work on reasonable incentives to approach your top 20 suppliers with and

sing strategies have evolved from just 1) focusing on price and 2) focusing on quality, reliability, responsiveness and total cost to a much broader focus of building supplier relationships.

Did you know that for each $1.00 you save in your “total cost of ownership” reduction efforts, you will improve your bottom line profitability by $1.00? And did you also know that most companies do not get this concept and continue focusing their resources in all the wrong places?

Now is the time when I want to share with you 4 basic rules that have proven to work and work very well to help you create the partnership relationship with your supplier and allow them to equally benefit from the experience as well.

Rule #1: Getting direct cost savings is really a thing in the past. Getting savings has become increasingly difficult to achieve as your suppliers face similar predicaments themselves and operate with very little room in their margins to wiggle.

Rule #2: To affect your bottom line, using 80/20 rule, work on reasonable incentives to approach your top 20 suppliers with an

uction efforts, you will improve your bottom line profitability by $1.00? And did you also know that most companies do not get this concept and continue focusing their resources in all the wrong places?

Now is the time when I want to share with you 4 basic rules that have proven to work and work very well to help you create the partnership relationship with your supplier and allow them to equally benefit from the experience as well.

Rule #1: Getting direct cost savings is really a thing in the past. Getting savings has become increasingly difficult to achieve as your suppliers face similar predicaments themselves and operate with very little room in their margins to wiggle.

Rule #2: To affect your bottom line, using 80/20 rule, work on reasonable incentives to approach your top 20 suppliers with an

ve proven to work and work very well to help you create the partnership relationship with your supplier and allow them to equally benefit from the experience as well.

Rule #1: Getting direct cost savings is really a thing in the past. Getting savings has become increasingly difficult to achieve as your suppliers face similar predicaments themselves and operate with very little room in their margins to wiggle.

Rule #2: To affect your bottom line, using 80/20 rule, work on reasonable incentives to approach your top 20 suppliers with an

ingly difficult to achieve as your suppliers face similar predicaments themselves and operate with very little room in their margins to wiggle.

Rule #2: To affect your bottom line, using 80/20 rule, work on reasonable incentives to approach your top 20 suppliers with and build a “preferred” supplier base.

Rule #3: Communicate to your suppliers on “how to” earn a “preferred” supplier status and what is required of them to remain a “preferred” supplier.

Rule #4: Tell your suppliers what’s in it for them (WIIFT) as they partner with you and build a “preferred” relationship.

To earn a “preferred” status means that your supplier will have the first shot to quote on new business, parts and project. In fact you can go so far as to create “earn a point” program every time you achieve your cost reduction goals using these techniques as they apply to your business.

Supplier earns a previously agreed upon point(s) when:

1) Shared tooling costs or shared engineering costs on a project

2) Extended terms: 60 or 90 day billing terms for a period of one year

3) Certified as “ship to stock” on all supplied parts or assemblies for a period of one year and remain compliant for every year thereafter

4) Ship zero defects for a period of one year and continue as such for every year thereafter

5) Work with purchasing, manu