Economic dip: purchasers must be 'supplier-centric'

23 October 2008
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24 October 2008 | Jake Kanter

Organisations should become more "supplier-centric" to survive the financial crisis, management experts claim.

Speaking at a Management Consultancies Association (MCA) conference in London last week, Caroline Firstbrook, managing director - strategy, Europe, Africa and Latin America for Accenture, said businesses need to support each other to survive the downturn.

She added companies are very interdependent when managing cash-flow issues and must take an integrated, co-operative view in difficult circumstances. "It would be easy to take action to improve your business at the expense of your supply chain, but if your suppliers go out of business, then that's not helpful."

She urged organisations to pay their bills on time. She also recommended firms fund their vendors if they are in danger of going out of business.

During the conference, the MCA launched its report Dealing with the Downturn. It said the boom in outsourcing since the 1990s means businesses rely more heavily on complex supply chains. The report noted: "The efficiency of organisations within any given supply chain is dependent on each other. Forcing suppliers to cut costs can have a negative impact on quality and, ultimately, sales and customer retention."

The paper urged firms to move away from the antagonistic behaviour that "still characterises" many relationships with vendors.

Chris Wakerley, managing director of consultancy Boxwood added firms must be "mature" when looking for cost savings. He explained working carefully with vendors and adopting a "supplier-centric" attitude will be key to getting through the financial crisis.





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