This week’s business week has an article about V.P Purchasing of GM and how it is trying to cut the purchase cost, streamline the purchased products, thus reducing the cost. This triggered me some thoughts.
When I was working in mechanical industry in India, I closely observed the purchasing manager. If you have purchasing power, then you can control your vendors. This is true with any business off course. The bigger companies can get better deals, better quality and better service.
Typically, purchasing managers are helped by vendor development managers; who develop different vendors, who can give better deals. If you have a stronger purchasing power, actually vendors come to you!
Off course, I couldn’t understand how the whole system works then. But, that is just like any other business.
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