Best Practices for Procurement Part 8 - It is not all about Price!

By Sandy Chockla, Franchise Owner, Expense Reduction Analysts.

The actual prices will likely be the biggest factor in your decision, but there are many other non-price factors that may also be important.  In fact, sometimes the ability for a supplier to meet your technical specifications may be critical to the decision.  Other examples are the level of customer service and support that is provided, the supplier’s ability to meet your required delivery dates, or if they have sound disaster recovery plans.  You may even decide that you want to support suppliers that are environmentally responsible or are a minority or women-owned business.   When defining these non-price factors, it is important to engage with all relevant stakeholders within your company.  These are the people that will use the product or service or can help define and weight the criteria involved in the decision.  You will need to decide if, for example, price is 50%, 75%, or 90% of your decision.   And how important are the various factors you identified, relative to price and each other.
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Sandy Chockla is a franchise owner and Principal Consultant for Expense Reduction Analysts (ERA).  ERA has a network of experts in more than 40 overhead expense categories which I leverage to benchmark prices, review supplier agreements, and optimize our client’s purchases or services.  This is done without compromising supplier quality or service.  If you would like to have a discussion, you can contact Sandy at schockla@expensereduction.com or call direct at 970-232-4860 .