Should You "Buy" or Source in a Recession?

Even though Purchasing has tried to move up market in recent years by focusing more on topics that strategic sourcing and supply chain professionals care about -- versus tactical buyers -- they occasionally lapse into the language of old. Still, despite the title of the recent above-linked article, "Recession Reaction: Best Practices for Buying in a Recession," (emphasis added) I did find a few worthwhile tips overall (and even some category-specific recommendations as well). One strategy that I found useful and have heard mentioned numerous times in recent months by different sources "takes advantage of the fact that the weak economy motivates business-unit owners to manage cost structures more than they ever did before."

This can allow procurement organizations to pursue more difficult categories -- although those with significant impact -- as well as those that require more change management within the business. It also makes the business more accountable to implement identified savings vs. punting when it comes time to make a switch to a new supplier or related relationship management issues with an incumbent. What's some other advice worth noting in the article: focus on supply risk, note supplier health (focus on financial flu vs. the swine variety) and help your suppliers to help you by building relationships and avoiding surprises. All in all, nothing terribly original, but not a bad primer on "buying" in the current environment.

Jason Busch

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