The fourth quarter has arrived, and that means it’s time to start thinking about winding the year down and looking ahead to 2024. And while there’s still a full quarter of activity to tackle before the new year arrives, now is the perfect time to start reviewing spending, forecasting new needs, updating procurement policies and evaluating technology solutions that you may want to start using over the next 12-24 months.
Here are five things all electronics buyers can be doing for the next three months to be best prepared for 2024 when it arrives:
1. Consider the terms when making buying decisions.
Price will always play a key role in buying decisions, but procurement professionals should also be looking at some different factors when deciding which suppliers to work with. Flexible payment terms, for example, can help procurement free up cash while also creating a stronger bond with their preferred suppliers. Some examples of flexible terms include partial payments, extended payment terms and more lenient return policies.
2. Determine which suppliers are (and aren’t) providing top-notch customer service to your firm.
Pay particular attention to the customer service representatives the you deal with on a regular basis and the level of customer service that those reps provide. “You want to work with people that make it easy for you to do your job or that will take work off of your plate,” says Kevin Larkin, director of sales – Americas, for Fusion Worldwide, an independent distributor of electronic components. Procurement groups that have a global presence should look for suppliers that “work around the clock” so to speak, and whose customer service responses aren’t delayed due to time zone differences. If you’re sending an email to somebody and need an update within 10 minutes, for example, you want a representative that can respond within five minutes.
3. Seek out suppliers that provide inventory management services and support.
In the current business environment, companies of all sizes are dealing with cash flow issues. Credit the tight labor market, high interest rates and inflation with creating this crunch. In this environment, you need suppliers that are willing to manage inventory (i.e., reserve inventory for you but only charge you once it’s been shipped), provide logistics services and/or help you market any excess inventory that you may be holding onto. “Look for companies that offer other services that fall outside of the ‘transactional buy-sell’ arrangement,” says Larkin.
4. Make on-time delivery a top priority.
You may not be able to get a gauge on a supplier’s on-time delivery performance until you place an order or two, but this is another criteria to be thinking about as 2023 winds down. Which of your suppliers met your on-time delivery expectations this year and which ones didn’t? Were there valid reasons for the latter, or was it just due to a failure on the supplier’s part? These are all important questions to ask yourself now as you prepare for next year. “The last two years have shown that one part can cause an entire build to go sideways or be delayed, which can cost companies millions of dollars,” Larkin explains.
5. Don’t ever be willing to skimp on quality.
Especially when you're dealing with shortages in the market, you want to know that parts you’re buying are 100% authentic. The good news is that there are procedures in place within that organization to protect your supply chain. Larkin tells procurement professionals to audit suppliers to ensure that they “are who they say they are,” and that they have the necessary equipment and ISO certifications in place. Ask questions like: What is your process for logging receipts? How does your quality inspection process work? And what devices are being used? “Understand your supplier’s quality process, especially if you’re not buying through an authorized dealer direct from the manufacturer,” Larkin stresses.