Procurement is one of those topics that, no matter how many times it is discussed, there's always something new to learn.
Think about it, how many times have you wondered if your procurement approach is working as it should?
If there are strategies that would work better for your company's current situation?
Well, you don't have to worry.
We are sitting down with the people who know the ins and outs of what makes procurement succeed.
Introduction
Today's guest is Chad Shumway, Director of Operations and Quality at Sagetech. Chad comes from a manufacturing background, he has more than 20 years of experience, making a truly expert in operations and quality management.
P of…politics
One of the biggest challenges for hardware companies is going to be drafted by the current political shift in the United. It's no secret that recently re-elected President Trump can and most probably will reshape foreign trade as we know it, and not necessarily for the better. Things like extra tariffs for certain locations can make procurement a lot more difficult, forcing companies to adapt and search for alternatives.
Start-ups and large companies
Is there any critical difference between the route start ups follow for their procurement and the route large companies take?
For Chad, it's all about supplier relationships.
Start ups, due to their own nature, can't really afford to waste too much time or resources in order to allure suppliers to offer them the best value, something that large companies manage with loyalty programs, for example. So what start ups need to do, and this goes especially for the founders, is to focus on building stronger relationships with suppliers.
Procurement from the beginning
If your company has only just started and you're still on the early days of your product development process, you could believe that the only thing you need to do is to make a list of the parts you need and buy everything.
Well, that's part of the most common procurement fails.
Even if your company is still in the process of creating the first product, you must consider bringing into your team a procurement professional. They're the ones specializing in understanding the needs of your market and the points you have to pay attention to regarding compliance.
The biggest challenge
Yes, if you acquire large amounts of products from your suppliers, you can certainly obtain the benefit of a better pricing structure and have your inventory levels secured, but is it really what your customers need? And what happens if you're running on a tight budget? For Chad, finding the answer was one of the most challenging aspects of his role.
Communication
The best advice Chad can give to all the founders and procurement professionals out there is to really do their best to build a connection with their suppliers. It doesn't matter if they're located thousands of miles away. They are critical partners of your success, so it's important to cultivate those positive relationships.
