People are generally lazy and get too comfortable in their jobs by not doing what they are paid to do. Today I had to step in and double check what was being purchased as the question I asked was when last did you check the market prices?
The answer may surprise you being 3 years ago, but I wasn't as I have seen this in most companies. When I left school one of the companies I worked for taught me the basics and that was to treat the business as if it is your own. This obviously has not happened with the latest generation and no wonder many companies are in trouble.
This item being purchased was a small component that they use thousands of every month, so very important to make sure the price being obtained is the best one possible. The price I found for them took me 30 minutes to find and saved them 40% on what they were about to pay. 40% or around $0.08c saved doesn't sound like much buy when you multiply that by 20 000 and then by 12 months it adds up and could mean the difference between someone getting a bonus or not or worse yet keeping their job.
I have started to jump in on things that I see are wrong as I have noticed this in my packaging business. The buyers I am having to deal with have no clue and once you are in supplying they never question the pricing. The same applies when you are trying to obtain new business as it is doubly difficult to get past the laziness you are confronted with.
source
In most companies the savings are right in front of you yet they don't see it.
Business is way down from 2 years ago with many companies hemorrhaging each moth struggling to make ends meet yet the answer is right in front of them. Take control by purchasing smarter and making sure the best price equates to the best service. No point in saving money if you are constantly waiting due to poor service so test suppliers out as it is not that difficult.
In the past when I was buying truckloads of items I had suppliers coming to me daily trying to sell their products. There was no such thing as appointments as being hands on you rarely behind a desk. If you know your job you know your pricing and it is all in your head.
Not one of those suppliers visiting me obtained any business as they confirmed what I knew that my pricing was correct. The one supplier actually asked where he needed to be and I gave him my purchase price which was below his companies yet he was still trying to sell that item to me. All I asked him was how he still had a business as that is piss poor and embarrassing.
The one company I have been trying to get their business has been a mammoth long haul being nearly 3 years next month. The biggest retailer in the country yet they are only now going to tender after what I have calculated is a loss of nearly $5 million in lost overpayments. At our exchange rates that is close to R75 million Rand and definitely not pocket change in any currency. I first thought it was back handers and corruption but to be honest I am still not 100% sure as it could be just a case of being stupid and lazy. Still doesn't make it right whichever one it is as they are both wrong.
The problem is this is everywhere in most businesses today which has you asking who is checking up on this. The accountants or managers should be double checking, but they are part of the problem as I blame them for what is going on. Ignorance is not an excuse as knowing what is happening is your job.