For those of you who need one, a bad economy is a great excuse to beginning procurement negotiations with your suppliers. But a bad economy also means that some financially weaker suppliers may be on the brink of going out of business.
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So do you negotiate with these suppliers to support your cost savings goal? Or do you let them keep a little juice in their pricing so they are around for you in the immediate and long-term future?
The answer is: “it depends.”
Debbie Wilson of Gartner posted on her blog an excellent entry entitled “Is Chasing Deflation A Good Idea?” about this very topic. She makes some thought-provoking points and I added my two cents into the comments.
I recommend that you give it a read and, if you’re brave, enter into the discussion as well.