Discounting for better payment terms

This article in Supply Management raises some interesting questions ( http://www.supplymanagement.com/news/2014/emphatic-support-among-buyers-for-early-payment-discounts ) and potentially flies in the face of good supplier relationship management.

Encouraging discounting in order to shorten payment times raises some serious questions:

Has an effective procurement process been undertaken thus far?
Are my current terms unreasonable?
What type of relationship am I trying to establish?
Am I subliminally saying I am a bad payer?
If suppliers are that desperate for business that they will negotiate away profit for cashflow are they the type of suppliers I want to be doing business with?

There is always a need to get value for money and we should never lose sight of why and what we are buying.  Some activities are prime for competition by cost, others not so.  Is cost always the key driver? and what are we willing to sacrifice by making cost king?

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