- Founder and managing partner of YQ Purchasing, which specializes in creative procurement and in developing and applying new tools and techniques for supply chain professionals.
- CEO of YQ cvba, a procurement conglomerate of several plastic processing companies.
- CPO for deSter (part of the Gategroup) and held procurement or director positions for PepsiCo/Tropicana and The Cotton Group.
- Expertise spans pharmaceutical, mining, stainless steel, plastic processing, banking, glass, chemicals, beverages, FMCG and web development industries. Advises major multinationals like GlaxoSmithKline Vaccines in optimizing procurement operations.
- Selected by IPSERA 2010 conference in Finland for new and creative procurement approaches published in collaboration with the University of Hasselt. In 2013, IPSERA selected the YQ Matrix platform, developed in close collaboration with the Maastricht University, as being most innovative in the procurement world. Procurement Leaders 2014 selected the YQ Matrix as finalist for the Best Procurement Service Award in London.
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Purchasing and Procurement - How to Negotiate with Sole Suppliers
- Global economic and credit conditions are limiting revenue growth.
- In difficult economic conditions, a company cannot simply increase its sales to improve revenue or margins. The only avenue remaining to increase profits is to reduce expenses. This puts pressure on procurement as the only way to increase margins and profit positions. A procurement cost price reduction of -1 percent triggers the same net profit increase as a sales turnover increase of +14 percent (at a net margin profit rate of 4 percent).
- Waste reduction is growing in importance as part of the supply chain.
Eliminating waste gives companies another avenue for reducing product costs beyond negotiating lower prices. It also can work its way through the system to make a company's products more attractive to its clients or customers.
As an example, savings often can be found by reducing packaging costs. That doesn't represent a lowered price for the actual product, but it is a reduction in the total cost of acquiring it. Additionally, thinking through packaging often can lead to reduced handling and storage costs within the company. Sometimes, such savings, or reduced expenses for customers, can be considered as part of the negotiation so that your own product can be more competitive as well, which is a potential boost to sales and revenue beyond just cost reduction.
- Companies are improving sustainability and reducing their carbon footprints.
Companies are finding that concepts like just-in-time delivery are creating opportunities to rethink how products are procured, handled and stored. In addition to reducing costs, this includes finding ways to produce products in a manner that is more sustainable globally and environmentally friendly. This is increasingly important to companies' marketing and image programs.
For instance, a product that once was shipped and stored in steel drums may not be needed in such quantities with a just-in-time bulk delivery system. If a vendor can reduce its use of steel drums, which is very energy-intensive packaging, a company's carbon footprint can shrink measurably.
Additionally, handling systems can be reconfigured to reduce the amount of handling, breaking down boxes, repackaging, storage, distribution and other steps that all require energy and expense. Integrating such plans in partnership with suppliers can pay big dividends for company profits and for a company's marketplace image.
- The nature of procurement and the profile of procurement professionals is changing.
Traditionally, procurement has been the kind of career that people get into almost by accident. As little as 10 years ago, it seems as though people found their way into procurement jobs largely because they were suited to yelling at sales people and brow-beating them for lower prices. Certainly, opportunities to study procurement — as an academic or university-level field of study – have been very limited.
This is changing. Today, research into the impact of procurement on businesses is a growing field. And procurement needs people uniquely qualified to approach the job as an integrated company function, involving such processes as purchasing, marketing, storage, distribution, production and quality control. Modern procurement professionals are far more collaborative than in the past, and they must have a well-developed sense of business processes, logistics and production. No longer is procurement just about buying products. It also involves integrating both external vendor and internal company capabilities to drive costs out of the system and create efficiencies beyond lower cost products.
- Companies are changing how they measure procurement price performance.
A traditional way to measure procurement performance has been to see how well the procurement office has performed compared to budget. Has it beaten expectations for prices on purchased supplies? Did supplies cost less over the course of the year than had been projected in the budget?
Financial officers, however, are rightfully wary of budgets that may have exaggerated prices and created an illusion of effective buying. One step to correct that is to compare procurement prices with those of the previous year.
Beyond this, though, a company also can measure how well pricing has compared to the changes in market prices. Certainly, products are sold in varying qualities, with different packaging, with different volumes, and so on. But the basic price evolution is more or less the same. It can be useful, then, to measure the gap evolution between market prices and procurement prices. This also creates opportunities to understand when pricing has drifted in the wrong direction and to negotiate an improved price position even when the price may look good against budget or previous years.
- The incidence of slave labor, child labor and other abuses is declining.
For years, it was almost like a dirty little secret in the procurement and distribution industries that many products, in fact, were produced in sweatshops, with child labor or even slave labor. Companies often did not truly understand the status of vendors in their supply chain. But this is changing.
As companies increasingly source whole products instead of just parts – say a whole headlight for a car, rather than the parts to make a headlight – they are finding they have more direct access to manufacturers. They also are bringing in products, like a headlight, that are more likely to carry the company's brand name on it. Combined, these two facts create an imperative for procurement professionals to know suppliers' production systems and to protect the company's brand identity.
As a result, procurement processes increasingly speak to work conditions and related issues as part of the negotiation. It has had a positive impact on labor and production around the world.