Purchasing Dark Arts 21 Most Common Unseemly Practices of B2B Purchasing

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Purchasing Seminar Discussion from October 31 that looks at 21 dark or sharp practices that purchasing might use in extreme situations. While not all are bad per se and can offer short term gain they pose long term risk and should be used, if ever sparingly, and by a professional.

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Purchasing Dark Arts 21 Most Common Unseemly Practices of B2B Purchasing

  1. 1. The 21 most common unseemly acts, not mentioned in good company, that purchasing professionals may encounter and practice. Bill Kohnen October 31, 2013
  2. 2. Warning Warning Warning  This discussion is not to endorse or suggest that these practices should be used.  It is important to have some code as an anchor. Professional such as ISM or Company policy  When faced with questionable acts do not take it upon yourself to be the “police” and investigate and judge a final outcome.  Most of the 21 items are not illegal per se and care should be given to reserve judgment before considering the total context in which you and others are employing these actions  Even if it seems there is some justification for these acts they are high risk even for experienced professionals with the longer term damage to company and individuals potentially being far greater than the immediate benefit Bill Kohnen October 31, 2013
  3. 3. 21 Dark Purchasing Acts 1. Payments to suppliers –unreasonable delays 2. Material Acceptance – to avoid/delay or cancel payment 3. Writing specification to favor a solution 4. Getting Suppliers to provide gifts for company parties and favors for executives 5. Using confidential information from one supplier to leverage another 6. Misleading suppliers about expected high volumes Bill Kohnen October 31, 2013
  4. 4. 21 Dark Purchasing Acts 7. Order cancelations without warning 8. Using unfair leverage with small suppliers 9. Sending one suppliers product to another for reverse engineering 10. Creating overly complex acceptance criteria after the fact 11. Disparaging Suppliers Sales people 12. Blaming supplier for your companies incompetence or mistakes Bill Kohnen October 31, 2013
  5. 5. 21 Dark Purchasing Acts 13. Taking advantage of obvious supplier mistakes 14. Not compensating a supplier for design or other assistance then justifying as a cost of business 15. Not compensating a supplier for design or other assistance then going to other suppliers with the ideas provided 16. Exaggerating problems with a suppliers products/services to extract larger penalties or concessions 17. Modifying or hiding actual information during audit. (Customer, ISO/TS, Financial) Bill Kohnen October 31, 2013
  6. 6. 21 Dark Purchasing Acts 18. Taking advantage of a suppliers difficult financial situation “ Busting Out” a supplier 19. Awarding business to companies that someone your company has a large interest in 20. Making personal purchases on behalf of employees and management 21. Engaging with a service contractor (security, cleaning, professional) as a screen to avoid regulations or fair payment and treatment of employees Bill Kohnen October 31, 2013
  7. 7. Are These Always Bad Practice?  Business Conditions sometimes call for drastic action  If some of these actions are truly motivated by a disruptive event and intentions are conveyed openly to the supply then they may be uncomfortable but not bad per se  If these acts are common practice in an organization and they are done without sharing knowledge with suppliers they can be harmful in the long run Bill Kohnen October 31, 2013
  8. 8. Summary  There is no organization public, private, big or small that is immune from the pressure to employee these acts.  In extreme short term situations these tactics used by professionals can result in benefits which can contribute to the organizations survival  There are indeed some small organizations that make these common practice and even big public organizations that cultivate a borderline image with suppliers  Organizations that employ dark tactics constantly do suffer from:  Constrained Growth  Actual total cost of service will be higher  Very real cases of dangerous situations created for employees  Limited flexibility to respond to market changes Bill Kohnen October 31, 2013

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