Economic downturn: Threats or opportunities?

What are the current behaviors in times of economic downturn?

In times of crisis, companies tend to do everything To win markets. Currently, the behaviors are different. Why?

Indeed, one might think that current economic conditions would motivate suppliers to respond more to tenders, but that is not the case.

Why shouldn't suppliers be tempted to gain “easy” market shares when many competing businesses are in trouble? Is it because of more complex procurement processes? Longer decision circuits? A less clear long-term vision?

The answer may seem trivial: current economic conditions are a source of tension for suppliers and affect the time and resources available. Often, faced with a call for tenders that may require long and expensive investigations, the supplier will assess its probability of taking the market.

If it is considered too low in terms of the resources to be provided, the instruction will be given not to invest in the buyer's RFP/RFQ (Request for Price/Request for Quote) approach.

At the same time, you know this main principle of Purchasing: competition leads to lower costs. And to get this competition, you have to attract the best suppliers.

Therefore, in the current economic context, as a buyer, you must motivate your suppliers to respond to your tenders. Motivating suppliers can lead to some changes in your Sourcing.

For example, you can share a presentation about your business in a face-to-face or online meeting before they are invited to respond to a market.

Even if these actions may seem cumbersome and time-consuming for the buyer, this type of more collaborative and less impersonal approach will contribute to motivating suppliers. They will invest more, which will bring more added value to the Purchasing organization.

Thus, it is important to always have a Purchasing strategy that is in line with your environment. Economic conditions are changing and problems will arise if your Purchasing strategy does not evolve accordingly.

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