Profitable Buying Strategies: How to Cut Procurement Costs and Buy Your Way to Higher Profits »

Mike Buchanan has 25 years of senior-level experience in procurement, almost all within major private sector organizations, in many market sectors. He is now a highly successful procurement consultant - and the Chief Executive of a UK-based procurement consultancy, LPS.

Improving an organization's profitability can only be achieved in three ways: increase prices, increase sales volumes or reduce costs.  Competitive pressures are making the first two options increasingly difficult, which leaves cost reduction as the key option available.  Profitable Buying Strategies shows a long-term, structured approach to cost reduction through smart procurement practices.  It straightforwardly explains the philosophy and psychology of buying; buying concepts, tools and techniques; changes that deliver cost reduction; market testing; outsourcing and insourcing; negotiation; e-procurement; and organizational issues.  Case studies and appendices outlining the successful cost reduction drives of a number of major organizations provide a real world explanation of cost reduction and procurement options.

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List of case studies

1 The philosophy and psychology of buying 7

2 Important buying-related concepts 21

3 Effective tools and techniques 34

4 The changes that deliver cost reduction 54

5 Market testing 72

6 Outsourcing and insourcing 87

7 Negotiation 97

8 Contracts and contract law 110

9 E-procurement 123

10 Organizational issues 147

App. 1 Service level agreement (SLA) 168

App. 2 Request for proposal (RFP) 179

App. 3 The Chartered Institute of Purchasing and Supply 191

App. 4 Soft issues impacting on cost reduction drives 205

App. 5 Buying at Sainsbury's supermarkets 209

App. 6 Buying at SmithKline Beecham 217

App. 7 Buyer remuneration in the UK 228

References 233

Index 234