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Procurement professionals 'retain power over purchasing deals'

3 September 2012

Procurement managers currently retain the upper hand over suppliers when it comes to arranging purchasing deals, according to a new survey.

A poll carried out by Supply Management revealed that 67 per cent of purchasing professionals believe suppliers wield no more power today than was the case five years ago.

This may be due to the constrained business conditions many suppliers are currently experiencing, which are giving procurement staff an opportunity to reduce costs and improve quality.

Nic Porter, managing director at Procuring Limited, explained that this balance of power is usually contingent on the elasticity of the supply market, with high elasticity conditions generally benefiting purchasers.

He added: "The key is to understand the dynamics of the supply market you are in and then to understand whether you are in a dominant position to influence the demand market."

Last week, Supply Management reported that a recent survey of chief procurement officers carried out by the CPO Exchange conference revealed that most companies are making major strategic changes due to the current volatile trading conditions.

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Categories: Functional Practices, Procurement & Supply Chain

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