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Thu, Jun 20, 2024 02:51
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Week of 10 June 2024: Procurement--Honest and Ethical

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These days it often takes a deep dive to understand honest and ethical, the first two attributes I mentioned last week.

When it comes to honesty, you can't be selective. You are either honest or you are not--throughout all aspects of your life. Hence, purchasing managers, especially, need to be honest throughout all aspects of their life.

Sending the shoes back to Amazon that you wore for a week, just because you decided you don't like them, and Amazon is a big company? You decide if you think that is being honest, you already know what I think.

I have found the best test of honesty is to call someone out on an action they took. If they get defensive, they likely know deep in their heart that it was a dishonest move. The louder they protest, the more their own conscious is gnawing at them.

The problem is, being dishonest in little things leads to dishonesty in big things. There is no firewall in honest and dishonest actions based on size.

Many suppliers are complicit in supporting dishonesty. They start by taking the new purchasing agent to lunch and it grows from there. There is a community here in the deep south that lives on the dishonesty of the suppliers and purchasing department of a major mill. True story--a supplier friend of mine was in this town for a brief visit and went into the local pawn shop/gun store at lunch time. The owner engaged him in conversation, found out his business, promptly walked him over to a display of shotguns and said, "These are the ones the boys at the mill want now." Enough said.

The other side of this coin is ethics. Purchasing needs to drive a hard, but ethical, bargain for their mill. Don't push suppliers to the point that the deal will put them out of business. Not only is it unethical, but it can also end up costing the mill to complete work when the supplier fails mid project.

I know of at least four paper machine suppliers that were pushed out of business this way. When we US based folks lament that there are no longer domestically built paper machines, guess what? Sharp deals pushed the North American manufacturers out of business.

Silly terms, like 120 days that I mentioned last week, are fantasy. You expect to withhold payment to your suppliers for a third of a year and not pay for that in one way or another? Get real.

You will also notice that I seldom use the word "vendor." I use "supplier." A "vendor" is someone who sells me cotton candy on the midway at the county fair. It is a matter of respect. If you don't respect your suppliers, you'll likely not treat them ethically, ultimately to your detriment.

Be safe and we will talk next week.


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