The current economic scenario poses a number of challenges for organizations’ supply chains. In previous posts we discussed some trends related to the need to bring more agility to projects and processes, the insertion of advanced technologies in operations, among other topics.
In this post, we talk about how to make Supply Chain more ethical. Actors such as governments, activists, the media and the employees themselves are increasingly checking the social impacts of companies’ actions. Therefore, it is necessary to create strategies to manage the growing external and internal pressures.
Concepts and trends
Making business operations more ethical is a topic widely discussed by experts and professionals from different fields. Responsible business conduct must be assimilated by different areas of organizations, such as marketing, finance, logistics, among others.
Companies, even if focused on profit, also need to be concerned with the social impacts generated by their actions, that is, issues such as sustainability and interaction with their different audiences have become a priority agenda for everyone. There is also attention to the environmental issue, presented in our texts on sustainable purchases and circular economy.
Companies’ supply chains also become a sensitive issue. Because they are currently global and complex, it is common to see unethical actions taking place without the company’s knowledge, damaging the corporate image and generating, in many cases, legal problems.
Therefore, it is important to know what all the parties involved are doing, ensuring that everyone fulfills their responsibilities.
There are many recent cases that serve as an example of “unethical actions”: in recent years, we have seen on the news organizations that had industrial plants in developing countries being exposed for hiring labor in regimes similar to those of slavery, violating human rights, or for doing unfair and predatory business with small suppliers.
And this type of conduct is being questioned more and more. Today, buyers of indirect materials, for example, are better informed and ask the following questions of suppliers during the purchasing process:
- Do you trust your suppliers and supply chain partners? Do you keep your word about ethics and morals, regardless of possible additional costs?
- Does each link in the supply chain care for its workers with fair pay and workloads and ethical conduct at work?
- If unethical behavior is discovered, how will it be remedied? Will each partner in the supply chain work actively to ensure that it is corrected?
This way, strategies related to corporate social responsibility become a guide to address the following concerns:
- Elimination of child and slave labor;
- Safe and hygienic working conditions;
- Fair wages and working hours;
- Rules to combat bribery and corruption;
- Ethical purchasing.
There are a number of approaches that help mitigate the topics mentioned above. One is Fair Trade, an economic system based on fair trade relations for those involved, especially small producers and workers from peripheral countries.
The idea is to allow economic development and an increase in the well-being of all, unlike the traditional model focused on maximizing profit. Fair trade allows for more balanced exchanges between those involved, helping to reduce poverty and promoting awareness of socially responsible consumption.
Through a certification issued by the International Fair Trade Association, products that meet the criteria receive an identification seal. These products do not need to be necessarily related to the food sector. Know more about the subject.
How to develop ethical Supply Chains
Recent studies confirm the importance of adopting an ethical conduct in supply chains:
- According to Nielsen’s Global Corporate Sustainability Report, up to 66% of people are willing to pay more for products that have positive social and environmental impacts. Another report found out that customers were willing to pay an additional amount of up to 25% for “ethical” products which were made fairly;
- A study by the Association for Supply Chain Management (APICS) indicates that 83% of professionals in the field consider ethics to be an important element in their work;
- In addition, according to the APICS survey, 71% of companies have a code of conduct for their supply chains, but only half of them apply it;
- It was also observed that 70% of the interviewees have policies to understand the conditions of production of the materials, but only 43% understood the operations of their suppliers;
- Estimates by the Organization for Economic Cooperation and Development (OECD) indicate that companies gain value by adopting ethical measures. In response to these challenges, the institution has prepared a document with guidelines for organizations to promote ethical supply chains. For more information click here.
These surveys show how crucial it is for organizations to bring more transparency to policies and practices related to supply chains, making them more ethical and socially responsible.
To this end, professionals in the field must be attentive to the forms of hiring, working conditions, among other points, in addition to being able to identify misalignments in their ethics policies and take action towards them. To go deeper into the topic, also read our article on compliance.
Tips for ethical Supply Chain and Purchasing departments
The Purchasing department plays a strategic role in companies’ supply chains. By being attentive to the issues discussed in this post, it also has the opportunity to attract more value, by negotiating fairer agreements with small entrepreneurs or poor communities, for example.
Our suggestion is to offer more and more operations with this concern, focusing on:
- Implement contract codes and fair contracts with their different partners;
- Access information about your suppliers and their activities in order to check their behavior history. Click here for tips on how to manage your suppliers with excellence;
- Check national and international laws of the places where your company operates, avoiding legal problems related to unethical actions;
- Make your information available to the public by turning it more transparent;
- Use technology to your advantage, with the use of softwares to assist in the management of your acquisitions, with data on suppliers;
- Have a team trained with ethical thinking, able to conduct fair negotiations with all suppliers.
What can you do as a consumer?
It’s our role, as consumers, to be aware of the important issues raised in this text. Businesses are increasingly oriented towards the satisfaction of their customers, and they are increasingly informed and engaged in social and environmental issues.
Therefore, keep an eye on the news on the subject and purchase products from companies that conduct ethical business and respectfully treat their suppliers and employees. External and internal pressures are also an important way for companies to change companies, and today there are different mechanisms for dialoguing with them (such as social media).
To learn more about new-age trends in supply chains and indirect material purchases, follow Soluparts’ blog.
The current economic scenario requires faster responses from both companies and their employees. Aspects such as late deliveries of indirect material, for example, can generate a series of problems within the operations chain, impacting productivity and, consequently, financial return.
In order to try to respond to these demands, the Agile methodology becomes fundamental. In this text, we talk about the main concepts of agile mindset and give some tips on how to implement it in the purchasing sector.
What is the Agile mindset?
There are many cases that can exemplify the moment we live in: considering the field of technology, for example, extensive communication networks have been developed that allow instantaneous interaction between individuals in different parts of the world. Regarding the economy, we have seen supply chains become global, influencing and changing processes that involve a number of actors (suppliers, buyers, logistics companies, among others).
There are many experts and academics who seek to conceptualize what we live in the modern world. An example is the term VUCA, created by the US military to define scenarios and contexts of war, which has come to be used as a business strategy as well – long story short, VUCA is an acronym composed by the first letter of the words: Volatility, Uncertainty, Complexity and Ambiguity.
More recently, in order to expand this concept, the term MUVUCA was also introduced, with the addition of two new elements: Meaningful (all actions are guided by a purpose as a result of the search for a meaning for life and the world) and Universal (concern about the global impact of what we do).
In order to find a way to follow up a reality in constant change, the agile methodology emerges: coming from the Information Technology sector, it seeks to reduce the rigidity of traditional organizations’ processes and procedures, encouraging smaller and faster deliveries, constant reviews and collaborative work. Read our Agile Supply Chain article to understand more about it.
What are the agile principles?
Even though it emerged in the IT area, the set of principles and processes that make up the agile methodology started to be used by different types of departments and organizations. In the purchasing area it is also incorporated as an alternative to the traditional model of acquisitions.
It is important to emphasize that the adoption of agile thinking is not an easy task, it requires organizational changes and the willingness of employees to change. The use of this methodology also depends a lot on the context, but there are some topics that can be applied in all situations:
1- Consumer / customer satisfaction is the main element: highest priority, with a focus on deliveries happening correctly and in a short time. This customer or consumer can be thought of in many contexts: in the case of purchasing indirect materials, for example, it refers to the company that needs a spare part to continue its production.
2- Change as an opportunity: this new way of dealing with challenges is extremely important, regardless of the context in which the change occurs, helping to increase the competitive advantages and the satisfaction of the clients served. The focus now is on solving a problem and not on the problem itself.
3- Speed and value go together: in short periods of time, high value-added deliveries must be made, whether the value is tangible or intangible. These deliverables can be products or services resulting from a process or project, which must be regularly revisited with updates. Here, “value” can be understood as the customer’s view (or expectation) of benefits and sacrifices in relation to what is offered.
4- Collaboration overcoming conflict: members of a project must develop the team mentality, in order to guarantee the transparency of communication and the shared commitment to guarantee success.
5- Power to people: projects are built and led by people and teams engaged. That is, they must be given the tools and working conditions necessary to succeed and complete the assigned tasks. Soluparts already understands and applies this concept since its creation, reflecting it in our purpose: Empowering Buyers, a maxim that reinforces the company’s focus on customer satisfaction.
7- Demonstrable values and results must guide each project: deliveries that meet or exceed expectations in terms of precision and value (tangible and intangible) become useful references for future initiatives and projects.
8- Keeping activities stable and sustainable: while delivering value is a priority, processes must be developed and optimized from a sustainable perspective to ensure that everyone is involved in a stable manner, without surprises that hinder decision-making.
9- Continuous improvement ensures agility: processes must be increasingly efficient through regular changes.
10- Simplicity is an essential element: maximizing returns using the least possible resources.
11- Self-managed teams are more successful: better results come from agile teams that are able to organize themselves.
12- There is always room for improvement: reassessing processes and making necessary changes to bring more efficiency and effectiveness are always welcome.
The twelve principles shown above, are based on the Agile Manifesto, which is the basis of mentality and all agile methodologies around the world. These principles were designed and coined by the Agile Alliance, a global non-profit organization committed to supporting people who explore and apply agile values, principles and practices to make the development of solutions and projects more effective, humane and sustainable.
This alliance was created by a group of 17 developers who, at a meeting in Utah, USA, from February 11 to 13, 2001, developed the Manifesto for Agile Software Development. Read more about the Manifesto and its principles on the alliance’s official website.
Agile thinking in the purchasing department
Unlike traditional models, most commonly focused on cost reduction, Agile thinking in purchasing seeks to generate value by supporting the organization’s objectives and business needs. Considering some crucial aspects of the procurement sector, it is possible to raise the main differences between the traditional and Agile forms of purchasing:
Instead of fixed and extensive planning and documentation, with the Agile methodology, a more responsive, objective and iterative position is valued, attentive to the real needs of the moment. Thus, identifying priorities becomes very important for purchasing employees.
The focus should be on elaborate more collaborative terms and built stronger relationships with suppliers, having as a result the gaining of shared success (questioning the competitiveness and rigidity present in traditional format contracts). Learn more about the topic.
They have to be iterative and responsive, in other words, suppliers can be changed after a round of work, as required by changing circumstances. On this topic, see the article we have specifically prepared on the application of agile methodology in the context of supply chains.
4 steps to make your purchasing department more agile, today
Below are some ways to make your purchasing process more agile:
1- Daily meetings at the beginning of the work day: lasting between 15 and 30 minutes, these meetings help to establish the day’s tasks, encouraging collaboration between team members to solve possible problems. In many companies, to encourage agility, it is proposed that participants remain standing;
2- Apply the notion of sprints, which would be small projects or project fragments, sequences of iterative work (with repetition of actions) in order to have a more compartmentalized notion of the whole, speeding up possible reevaluations and changes in the acquisition path;
3- Definition of priorities: in the face of frequent changes within the company, establishing priorities and regularly reviewing them helps to streamline the purchasing process;
4- of software that helps in Agile management: technology can help centralize data related to a purchase, in addition to facilitating communication and alignment between dispersed teams. There are a series of programs aimed at the application of Agile methodology in companies.
In this article, we show how Agile methodology can help a lot to optimize the projects and processes of purchasing departments. Even though the method was originated to meet the demands of software development, many business areas have adopted these guidelines, resulting in more effectiveness and efficiency. Responding quickly to market changes has become a competitive advantage.
The purchasing department has a lot to learn from Agile, but for that it is necessary to be sure that its organizational culture and professionals in the area are flexible and resilient. To help you optimize your purchasing department, we suggest the following readings:
Another way to streamline the activities of your purchasing department is to count on a company specialized in the search for spare parts (MRO) from more than 15000 brands anywhere in the world, such as Soluparts.
In a world characterized by the presence of numerous global supply chains, with products being marketed by partners in different countries, the import process gains strength, agility and practicality, becoming an advantageous decision for buyers interested in getting the best deals.
In the automotive sector, for example, a survey carried out by the Brazilian magazine Quatro Rodas reveals that importing parts can be 80% cheaper than buying from local suppliers.
As much as this practice is commonly adopted around the world, there is still a certain fear in the business sector regarding the procedures that involve importation. In many cases, buyers end up preferring to keep local partners, even if that means paying more for parts, rather than establishing agreements with international suppliers.
In this article, we will discuss the benefits of purchasing indirect materials abroad, in addition to give you some relevant tips to increase the degree of success in this type of negotiation.
Why make international purchases?
There are a number of reasons why importing a replacement part or indirect material is interesting compared to buying locally, other than optimizing the procurement process and increasing the companies’ profit margin:
● Conditions are advantageous: factors related to the country where the purchase will be made (taxes, average wages and other expenses with the production of parts) must be considered in the import process.
● Smaller costs: in many cases, the cost of each part is lower compared to the local market. When the buyer purchases a nationalized part (produced abroad and imported by a national supplier), the value includes the cost of production, its nationalization and the profit of those who sell.
● Product quality: if you choose an international purchase, you can acquire indirect materials produced from more advanced technologies and processes.
● Access to exclusive resources: some materials can only be found in some parts of the world, guaranteeing direct access to them.
9 ways to increase the benefits of importing
Here are some tips for conducting purchases in an international context:
1. Analyze your supply chain frequently
It is important to review your supply chain from time to time as a result of possible changes in the foreign market (such as the formation of alliances, the end of trade embargoes or the adoption of new practices by countries). In other words, it is important to discuss periodically new and favorable trade agreements that can reduce or eliminate taxes, interesting global trends in the production of a certain product and new bilateral agreements between nations.
Another point of attention is the lead time and the type of transport adopted. Depending on the piece, the most convenient is air freight, used 80% of the time by companies. In this case, the deadline for receiving the material can reach one week, which sometimes corresponds to the delivery of a piece purchased in the national market.
In cases when the part requires sea freight, which average delivery time is over a month, it’s important that you can count on a structured purchases plan. It is also worth remembering that when buying in large quantities the price of your freight decreases.
2. Understand in depth the origin and availability of parts in the domestic and foreign markets
Before defining which parts will be purchased abroad, it is important to make a careful assessment to identify and understand the availability of this material in the national and international markets.
An indirect material of smaller dimensions and high demand, for example, is probably constantly imported in large quantities by the national supplier, which makes its cost advantageous even in the domestic market. In such cases, the part may even have prompt delivery.
It’s also important to check the existence of similar parts, it’s possible some of them are available in the national market. For this, try to understand well the demand of the company’s maintenance area.
On the other hand, in the case of an obsolete part or a part used only in more specific situations, it may be worthwhile to import. Also note if the required part is produced only on demand or if it is always available on stock for purchase – if so, try to understand if your company has a warehouse near a particular manufacturer, this will lower the delivery costs.
3. Conduct risk assessments
In addition to having a team focused on risk management, it is suggested that your company’s logistics team assesses risks in a way that allows you to be informed about possible delays or other issues before their occurrence. This way, you can have alternative options to increase the security of your business operation.
When planning nationalization, ensure that your company is working with good agents (insurance companies, carriers, forwarders and freight agents recognized in the market) and keep in touch with everyone throughout the process.
4. Maintain relationships with local trade associations
Associations focused on this topic, whether in the country where the company is located or where you intend to make a purchase, provide important news and information on international trade and safety tips. They can even help you secure new business opportunities, broker new partnerships and increase your list of trusted suppliers and contacts.
5. Have good software for managing acquisitions
Working with different cultures, monetary systems, laws and languages can make payment control, compliance and deadlines very complex. Having a good information system to manage purchases, contracts and communication with partners and other audiences is crucial to prevent something from being overlooked. To know more about the subject, read our article on the best software for purchasing management.
6. Define work goals
Setting goals is crucial to achieving the expected success – a good way to start is to determine the cost savings that can be achieved by starting to buy more parts from the international market instead of the national one.
It is a highly complex activity, since it involves issues external to the company, escaping its control. However, even if the goal is not achieved, it is a good way to assess business practices and create strategies for future business negotiations with international partners.
Before setting your goals, it is important to try to understand the forecast of the demands for a certain period and consult the budget available to your department.
7. Consolidate shipping
Bulk orders help reduce costs related to payment, shipping and custom fees. When developing a good relationship with the supplier, it is possible, for example, to negotiate the import of more products at a reduced cost. In this sense, Soluparts offers the possibility of cargo consolidation.
It is also a good strategy to buy products at certain times of the year, eliminating the need to order them when demand is high, and preferring to place large orders over requesting smaller one-off shipments. On the subject, find out the Annual Contract, offered by Soluparts.
8. Research the local area to understand its concerns
Knowing the area well in order to map possible points of attention and mitigate them before closing deals with the international partner is essential to have a successful purchase – the task is time-consuming, however it’s extremely necessary. Therefore, the ideal is to have an international partner who already knows all the markets and operates in over 40 countries – like Soluparts.
9. Define clear expectations
Having signed commercial agreements in writing with suppliers and partners reduces the possibility of problems and offers ways to assess the conditions established in the event of a conflict, ensuring security for both parties. On this point, see our article on the benefits of contract management in companies.
In this article, we discuss the benefits of purchasing indirect materials in the international market, helping to optimize the supply chain and reduce the company’s operating costs.
The value of your purchases will be lower if you choose to do this type of transaction from a supplier abroad. Sometimes, importing an item requires planning, but when you have a partner specialized in purchasing indirect materials in other countries, you can achieve a lead time very close to that practiced by national sellers.
Tip: The important lesson in this article is not to avoid making a great international deal because you do not fully understand the import logistics. Buying parts abroad can offer several benefits and greatly reduce purchasing department expenses. Soluparts logistics team and your company’s logistics will take care of the entire process, so the part arrives, at the right time, in your industry.
At Soluparts, we have highly reliable logistics agents that work with modern technologies (such as GPS tracking) to ensure the monitoring and inspection of cargo in order to avoid delivery problems or delays.
Usually, we use Incoterms EXW, however, we can adapt our logistics according to your needs, leaving you free to choose the Incoterm that is most convenient for you.
Contact a Soluparts specialist, today.
Emotional Intelligence (EI), also called Emotional Quotient (EQ), is a concept that emerged in the 1990s among psychologists, spreading rapidly to other sectors, including the organizational environment.
Read on and learn how this ability can generate benefits in many areas, including the purchasing sector!
Emotional Intelligence in the corporate environment
Emotional Quotient was first defined academically in an article published in 1990 by American psychologists Peter Salovey and John D. Mayer as “the ability to monitor one’s own emotions and those of others, using this information to guide thought and action.”
However, the psychologist and writer Daniel Goleman, Ph.D. at Harvard is considered the father of Emotional Intelligence for having popularized the subject by publishing a book on the subject (in 1995). And it was precisely this work, titled Emotional Intelligence: Why it can matter more than IQ, that moved the corporate world by stating that IE plays a particularly important role in the work environment.
In order to verify if this statement is correct, a survey conducted with 2,662 American managers revealed that 71% of those interviewed value the Emotional Quotient more, when compared to IQ, in their employees. Of those, 75% said they were more likely to promote an employee with high EQ and 59% said they would not hire a candidate with high IQ and low EQ!
The study, conducted after the 2008 financial crisis, showed that in periods of economic uncertainty – such as the one we are currently experiencing because of COVID-19 – companies need people who can handle high levels of stress.
In this sense, it is natural to prefer professionals who can make better decisions to solve difficulties, keep calm under pressure and have greater empathy – typical characteristics of those with high EQ.
But, it is necessary to highlight: the Intelligence Quotient (IQ) will always be very important for professional development because it involves, eloquence or learning capacity – among other essential requirements in any function.
Emotionally intelligent professionals and teams
We can say that Emotional Intelligence is able to help in the evolution of any career, because emotionally intelligent professionals can have self-control and maintain their motivation, enhancing their performance. But what about teamwork: does IE influence the community?
According to the researchers Druskat e B. Wolff, this is a reality. Teams with a high Emotional Quotient build a solid foundation of trust, effectiveness and cooperation, which is reflected in overall performance. Not to mention that organizations with a culture of emotional intelligence reduce absenteeism levels, while those with engagement increase.
However, attention is needed to excess Emotional Intelligence, say teachers Nikos Bozionelos of the French EMLyon Business School and Sumona Mukhuty of Manchester Metropolitan. Investigating the performance of 309 managers, the analysis concluded that managers with too much QE can have difficulty making difficult decisions – such as letting go of a team member who is not meeting expectations.
In other words, the balance between the two quotients will make the professional more complete. And the same goes for team building: by mixing individuals with higher IQs with others with good EQs, the team will tend to be more efficient.
Emotional Intelligence in the Purchasing Sector
Digital transformation has been influencing the purchasing sector, and it is essential to act in a way that is compatible with this technological advance.
In addition, the area is subject to changes in the economy, in the supply chain and in company policies, requiring procurement professionals to remain flexible – the attachment to old processes, for example, could be very bad for the company and for the professional’s career.
Given these factors, or even during a complex negotiation, a good EQ level can be very useful. But is it possible to develop Emotional Intelligence? According to experts, yes!
Accompanied by psychologists, 132 people had the opportunity to develop their emotional skills and, at the end of a year, not only demonstrated (lasting) improvement in this type of intelligence, but also experienced greater physical and mental well-being, lower levels of stress and improvement in their social relationships.
Based on this experience, to achieve a higher degree of Emotional Intelligence, here are some guidelines to follow:
- Recognize your own emotions and how they influence your performance;
- Accept the fact that you cannot control everything and avoid making hasty decisions based on intense emotions – learn more in an article that shows how to use emotion for better negotiation;
- Find ways to relieve stress at work – it can be a hobby, watching a good movie, or a physical activity;
- Listen actively to what others have to say;
- Empathize and pay attention to how you respond to people;
- Work on your motivation, emphasizing what you love about your work and maintaining a positive attitude.
Experts say that we are all emotionally intelligent, but each one needs a different time to work on their feelings and develop the Emotional Quotient which can undoubtedly be a great ally for the procurement professional.
Another way for the procurement area to obtain benefits in their routine is by hiring a company specialized in indirect materials to optimize the purchasing process and obtain the best results.
Get to know Soluparts and discover the advantages of having a specialist in the purchase of spare parts. Request a quotation without any commitment and try it out!
The process of purchasing indirect materials, which allows the continued existence of business, is essential to the functioning of an organization and requires proper management to avoid losses – this is because the lack of these materials may mean interruptions in production and delays in projects.
In this article, we will address the challenges one must overcome for a good management of indirect material procurement.
Purchasing indirect materials: challenges
The NelsonHall study, titled Improving and redefining the role of indirect procurement, revealed that only 47% of purchasing executives surveyed showed a high level of satisfaction with the purchase of indirect materials at their companies – and this percentage dropped to 45% when the management capacity of the indirect procurement team was analyzed.
According to the survey, the main challenges that contribute to these numbers are:
1- Strong demand for cost reduction
Often viewed as an area of expense, the purchasing sector is constantly charged to reduce organizational spending, which must be achieved without representing a loss of productivity for the company.
2- Difficulty managing suppliers
This stage of the purchasing process is considered one of the most complex, involving continuous research, often complex negotiations and, as a consequence, consuming a great deal of time in the procurement routine.
3- Lack of expertise
It is very complex to develop an indirect material procurement team that specializes in purchasing such varied and infrequently requested products. And this lack of knowledge can generate problems such as mistaken purchase of materials or inadequate negotiation.
Improving indirect purchasing management
Although there are obstacles to overcome, as already pointed out in Procurement Department 4.0: challenges and trends, it is necessary to see them as motivation to improve the work and management of indirect material purchasing.
Below are some suggestions for improving the way indirect procurement is managed.
1- Be a partner of the other sectors of the company
It’s necessary to get closer to other sectors, gaining their trust by understanding their main needs: what they are trying to achieve, what challenges they face in their routine, and how do acquisitions influence and collaborate in this regard?
Investing time and effort to really listen and deliver what they need will lead to the realization that indirect material procurement is an essential operation for all sectors of the organization to achieve good results.
It is also essential to collaborate to train the procurement team, with training and other resources that provide tools to improve the performance of all employees.
2- Use appropriate technology to identify and consolidate expenditures
The use of a holistic technology tool to track, identify and categorize the expenses of indirect material purchases will give the procurement manager the ability to add the needs of all sectors into fewer orders and, as a consequence, obtain benefits such as volume discounts and more favorable contracts.
To identify the level of digital maturity and the technologies most commonly used in the purchasing sector, check out our articles: The purchasing sector in Industry 4.0 and 4 technologies that will change global trade.
3- Control the stock effectively
The demand for indirect materials may occur due to unforeseen circumstances. But it is usually derived from predictive maintenance planning and the service life of equipment and parts.
Therefore, inventory control requires technical information on the condition of the equipment, as well as statistics that can project the need for indirect material purchases in the future. This must always be based on historical data, the criticality level of the operation and the difficulty of acquiring the items.
For this, stock management software can be used or RFID tags, intelligent sensors, among other options that we have already addressed in an article about the benefits of an intelligent supply chain – worth reading for more details!
4. Suppliers: essential for good indirect materials purchasing management
A healthy relationship with suppliers is essential to improve the management of indirect material purchases, which requires constant communication and analysis that transcends prices and deadlines, such as verification of risks that the supplier company may offer or legal requirements and social and environmental responsibility – among other factors.
This monitoring allows a clearer vision of the current conditions and the place that suppliers occupy in the market to always guarantee the best possible business and also to identify points for continuous improvement.
Counting on specialists in the search for the best suppliers in the international market offers many benefits, such as optimization of the purchasing process and cost reduction. In addition, a company specialized in indirect material purchases also allows the manager to optimize his time, focusing on more strategic functions.
Soluparts, with offices in Germany, Brazil, United States, Hong Kong and Portugal, maintains contact with the world’s main suppliers. All you need to do is send us the specifications of the material (manufacturer and part number) and we will find the best conditions in the market, sending you a consolidated quotation to optimize your time.
Discover all the advantages that only a specialized team can offer your company. Request a quotation now!
What could be better than watching a good movie? Watching the movie and, on top of that, improving our performance at work!
With that in mind we made a list of 5 unmissable movies for the shopping professional’s routine – and that can be seen in good company, making better use of your time at home.
Prepare your popcorn, have fun and expand your knowledge!
1. 12 Angry Men (1957)
A classic movie with Henry Fonda as the lead character. It tells the story of a young Puerto Rican who goes on trial accused of killing his own father. After the evidence is presented, twelve jurors meet to decide the sentence, which must be unanimous.
In the first round to reach the decision, eleven jurors – each based on their own convictions – decide on charging him as guilty. But the 12th, Mr. Davis (Fonda), is not convinced of the boy’s guilt and starts a process where he will try to get the other members of the jury to review their decision.
Reflections provoked by the film
Even though he is a minority, Mr. Davis persists in presenting his point of view to the other participants in the group.
Controlling his emotions even when harassed by other people participating in the “negotiation” and using arguments to guide his point of view, he does not try to impose his opinion. His tactic is to get other people to consider other options in addition to the idea originally conceived.
Another point that deserves to be highlighted is that the protagonist is open to consider other opinions, as long as they are accompanied by good arguments. In other words, he has no intention of making his own prevail, but defends it in a respectful and intelligent way.
To have more details of the negotiation techniques used by the character and, mainly, to know the verdict, check out the film – it is certainly an excellent tool for the purchasing professional to evaluate his way of negotiating and even improve it to get better results.
2. Up in the Air (2009)
It tells the story of an executive, lived by George Clooney, who travels around the United States with the task of firing employees of multinational companies.
Ryan Bingham, Clooney’s character name, loves his work. However, his professional routine is put on the spot when his company hires the young Natalie Keener (played by Anna Kendrick), who has developed a dismissal process through videoconference, without the need for expensive travel.
Reflections provoked by the film
The clash between traditional and new management is represented very well by the protagonist’s struggle to defend his way of working, in some aspects already outdated, from the changes provided by technological transformation.
As the procurement sector is often guided by more traditional work models, the procurement professional has the opportunity to reflect on the importance of remaining open to change, reaping the benefits that transformation provides.
The difficulty of teamwork and communication are also explored in the film, where both characters wish to impose their point of view. Only when one starts to try to see the situation from the other’s perspective, do they start to respect each other and learn from each other’s experience.
3. Bridge of Spies (2015)
Based on a true story, the film features Tom Hanks and English actor Mark Rylance (Oscar-winning supporting actor for this role).
In 1957, in the midst of the Cold War between the United States and the Soviet Union, lawyer James Donovan (Hanks) is in charge of defending Russian spy Rudolf Abel (Rylance) in an American court and convinces the judge to leave him alive to serve as a bargaining chip, should any American be arrested in Soviet territory.
A few years later, the lawyer is invited to negotiate the exchange between the Russian spy and an American and to top it off, try to free an American student, imprisoned in East Berlin.
Reflections provoked by the film
When the lawyer was invited to defend the spy from the enemy country, everyone believed he would make a symbolic defense. However, he prepared himself for the clash and was able to identify an argument strong enough to have a turn at the “negotiating table”.
Not only did he surprise the others involved, who were so confident in winning they didn’t prepare themselves to negotiate, but he also demonstrated his negotiating value to the point of being called to an even more important and complex negotiation (because of the conflicts involved) in the future.
The movie portairs the perfect negotiation planning class, including listening to other people in the team to outline the ideal strategy and to have a “plan B”, always aiming for the best possible result.
4. Invictus (2009)
Another film based on facts. It touches on the power of leadership to solve conflicts and unite a team.
After the end of Apartheid, newly elected President Nelson Mandela (Morgan Freeman) needs to find ways to lead a South Africa that remains racially and economically divided.
To do this, he chooses the universal language of sports and joins forces with Rugby Captain Francois Pienaar (Matt Damon) to unite all South Africans in favor of the national team at the 1995 Rugby World Cup.
Reflections provoked by the film
After successive governments in which the rights of the black population have been repressed, the great leader Mandela does not think about revenge. Even under pressure from some members of his team, he opts for the path of pacification.
Often it is necessary to coexist, within the team itself, with individuals who have different ideas and even different behaviors. A leader is not afraid to keep at his side people with opposing points of view, he takes the best from each one, always aiming at a greater and collective good.
The film reinforces the importance of loyalty and commitment, revealing that in order for you to create a good team, including professionals in the purchasing sector, good leadership is needed.
Another very interesting aspect is the presence of two types of leaders: the born leader (Mandela) and one who is being molded to face a complex situation – in this case, the rugby captain.
5. The Social Network (2010)
It reveals what happened behind-the-scenes of the creation of Facebook, in 2003, by computer genius Mark Zuckerberg (Jesse Eisenberg), with the help of Brazilian Eduardo Saverin – making the American the world’s youngest billionaire.
The film also shows the personal and legal complications that occurred during the process that transformed the social network into one of the largest on the planet.
Reflections provoked by the film
The new media, which emerged with the digital transformation, has changed the way people interact, communicate and even work – working from home has proven to be a good option for many companies.
It’s a good way to understand the impact of powerful social networks today and how they can be used to benefit business – such as researching a supplier’s reputation and improving internal communication, for example.
So, did you like the suggested stories? Did you miss any movies you’ve watched and that have contributed to your training as a procurement professional? Send us your suggestion and we’ll expand our list!
Conflicts can arise during a negotiation and means to resolve them must be found. But what is the best strategy to achieve positive results for the negotiating parties? Check out this post and find out!
Identifying the difficulties of negotiation
We can define conflict as the lack of understanding between two (or more) parties, causing tension on at least one side involved in the negotiation process.
There are two ways of looking at conflicts when it comes to negotiation. The first is to think that it is harmful and that the people who produce it are emotionally disturbed. The other way is to see it as an opportunity to work to minimize losses and maximize gains for all.
For those who want to do well in a negotiation that involves different opinions, only the second view on the subject is possible. But before resolving a disagreement, it is necessary to know whether it is an affective or a conflict of perspective, teaches the negotiation teacher, Paulo A. Alves de Almeida (PUC/MG), who has among his students many professionals from the purchasing department.
An Affective Conflict involves interpersonal incompatibility among negotiators, making it difficult to exchange information and causing the energy of understanding to be directed towards solving people’s problems rather than seeking solutions for business.
But in a Conflict of Perspective there is a disagreement of thought among the elements that are participating in the negotiation, which is natural, after all, each individual has his own ideas and perceives reality in a particular way.
William Ury, founder of Harvard University’s School of Negotiation, says that conflict is natural and will always exist, and it is up to the negotiator to find ways to overcome it.
But the expert also says it is a mistake to believe that good negotiators are born ready. For him, to be successful in a negotiation that involves conflict is something you learn, and for that he gives the first tip: before influencing someone, you must influence and dominate yourself!
Solving conflicts in a negotiation
This is an essential point in a negotiation: the participants must be able to persuade and modify each other’s ideas. How can this be done? Follow the tips that follow – they are very useful for those working in the purchasing department.
Overcome interpersonal conflict
By considering each other opponents, there is no chance for dialogue and the negotiation will not progress. The negotiator should focus on resolving the deal, preventing personal feelings from being a part of the negotiating table.
The Harvard professor says that a classic mistake in negotiation is to think that being soft on people means being soft on the problem. Or the opposite: to imagine that a firm approach to the problem requires being tough on people.
According to the expert, what successful negotiators do is separate people from the issue discussed so that they can be calm with people while remaining firm about the problem.
In addition, if you notice that other members of the group have this kind of disagreement, you cannot get involved in the situation or take sides. The best way out is to value opinions, creating space for all group members to express themselves.
When all participants have the perception that their opinions have been listened to in a respectful way, even without being adopted, there is a feeling of collective responsibility for the final decisions.
Find similar points
No matter how different the opinion of people who are taking part in the negotiations is, there will always be at least one point in common. And you have to identify it before they are camouflaged by differences.
The negotiator must therefore find the similar points of the two parties and start the conversation on this item and gradually introduce the disagreements.
Another important point is to take the initiative in the negotiation because, according to experts in this field, those who have this attitude can have greater control of the situation, increasing the chances of success – those who work in the purchasing department need to know this.
Know how to deal with problems
Preparing for uncomfortable situations can help the negotiator deal with them, when (and if) they happen – at such times, it is essential to control anxiety and maintain balance.
One way to overcome a conflict is to apply the active listening technique. Also known as empathetic listening or reflective listening, it consists of listening and responding to the other party in a truly understanding way, capturing not only the words (verbal language), but also their feelings, manifested by gestures, posture and even looks (non-verbal language).
Calling the person by name, using the same tone and volume to the other party and always being very polite are simple attitudes that help to establish greater interaction and closeness.
The active listening technique allows you to:
- Increase trust and mutual respect;
- Release emotions and reduce tension;
- Encourage participants to disclose information;
- Create a safe environment for problem solving.
Act as a mediator
In complex negotiations, the way out for conflict resolution can be to act as a mediator. This is one of the concepts taught in the Harvard Negotiation class by Professor William Ury.
What he calls the third side is a negotiator who, even though they have interests in the issue to be resolved, manages to advocate for the interests of all. In order for this to work, however, this negotiator must be trusted from both sides, otherwise they will not be able to establish themselves as a mediator.
A well-conducted negotiation leads to the difficulties being overcome, allowing everyone to be sure in the end that they have been heard and that the decision was the best possible one for all parties.
However, it is worth noting that it is not only the result of the transaction that should be considered, but the way the process was conducted. If in the course of the transaction there was an exchange of concessions between the parties, the necessary balance was established so that everyone felt comfortable and left the process satisfied – and ready for future negotiations based on mutual respect.
If you want to know more advanced negotiation techniques, it is worth knowing other relevant tips that we have prepared to help you get the best results. Click, read and perfect your way of negotiating:
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