BUY CHEAP OR BUY FLEXIBLE. THE IMPORTANCE OF FLEXIBLE SUPPLIERS IN TIMES OF CRISIS. PARTICULARLY SIGNIFICANT FOR SMES. THE OPERATIONS DIVISION ARRIAGA SHOPPING EXPERT ASSOCIATES IN CONNECTION WITH THE FINANCING. NOW ALSO IN ZARAGOZA. Reviewed by Momizat on .   BUY BUY CHEAP OR FLEXIBLE As a consultant I have watched many companies that are experiencing liquidity problems continue to select suppliers only by the crit   BUY BUY CHEAP OR FLEXIBLE As a consultant I have watched many companies that are experiencing liquidity problems continue to select suppliers only by the crit Rating: 0
Inicio » Blog Arriaga Asociados » BUY CHEAP OR BUY FLEXIBLE. THE IMPORTANCE OF FLEXIBLE SUPPLIERS IN TIMES OF CRISIS. PARTICULARLY SIGNIFICANT FOR SMES. THE OPERATIONS DIVISION ARRIAGA SHOPPING EXPERT ASSOCIATES IN CONNECTION WITH THE FINANCING. NOW ALSO IN ZARAGOZA.

BUY CHEAP OR BUY FLEXIBLE. THE IMPORTANCE OF FLEXIBLE SUPPLIERS IN TIMES OF CRISIS. PARTICULARLY SIGNIFICANT FOR SMES. THE OPERATIONS DIVISION ARRIAGA SHOPPING EXPERT ASSOCIATES IN CONNECTION WITH THE FINANCING. NOW ALSO IN ZARAGOZA.

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BUY BUY CHEAP OR FLEXIBLE

As a consultant I have watched many companies that are experiencing liquidity problems continue to select suppliers only by the criterion of cost. I guess the purchasing department wants to contribute to the crisis trying to reduce costs so as to achieve maximum recovery of sales and margins.

However, we must take into account the flexibility of some suppliers who are able to supply the raw materials in a more timely, on demand without a reasonable risk of lack of supply.

If the management of purchases are made only from the standpoint of cost, besides the traditional quality problems may involve the need to increase the size of orders and, among other things, having to tie up large amounts of money in a time is scarce alarmingly. The other consequence of buying from a vendor is not flexible there is no raw material to produce what customers demand, which is lost and customer service. Another drawback is inflexible to work with suppliers have to have more product thrust, which means more money invested in stocks, not just raw materials but finished goods, all in case.

Today more than ever we must seek suppliers for a given quality level, cheaper. But today more than ever we need very flexible to adapt providers supply the needs of production and hence the level of service you want to give to customers.

Why is this so important today?. Businesses, especially SMEs, every day have more financial problems. As consultants we have seen almost as a company goes into bankruptcy because he was so focused on reducing the costs of raw materials to be more competitive and have many stocks for better service and better compete, he ran out of liquidity. Also this company was trying to achieve maximum production efficiency to reduce costs, but with the consequence of increasing the stocks of finished goods and raw materials. These rigid systems that optimize cost and services now have a cost that an SME can not afford: the financial immobilization of large amounts of money.

Hence the need for flexible suppliers. Of course you need flexible production systems and flexible service systems. Since then seeking the lowest cost, provided that she does not grow with working capital financing needs.

In these times of crisis one must consider many things. You have to be competitive in cost and service, but must be related to the financing needs require.

The working capital financing needs can lead to seriously compromise the viability of a company but is controlled to a level that can support it, because surely the banks will be unwilling to finance

For another post left a very related to it to deal with the internal flexibility of the company to reduce the financing needs of the inner workings

Jesús María Ruiz de Arriaga

Lawyer, economist and consultant. Associate Director.

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