The concept of outsourcing your purchasing or supply chain efforts within the homebuilding industry may seem foreign. But upon closer inspection, you may discover that the opportunity makes a lot of sense. Let's take a few minutes and look at for key skills that NEMAsource can add to your organization beyond the obvious.
Pursuing Entrepreneurial Creativity
Considering all the business types as a whole, perhaps few can claim to be more creative than the custom home builder. Carefully crafting a homebuyer's dreams into a million dollar reality is their mainstay. This requires a creative entrepreneur. On the other hand, the vendors who hone this idea into a completed product are also of a creative mindset. Homeowners seldom stop to consider the gyrations that the builder, framer and air conditioning contractor had to go through to get vents to that remote corner. But they did it.
Purchasing within this environment requires no less entrepreneurship. Oftentimes, the solution is not as much a mathematical tactic as it is a face to face conversation on the supplier's plant floor improving safety, lowering his insurance modifier, reducing cost.
More than Looking at the Lowest Price
NEMAsource is constantly looking at ways to help their suppliers improve. True negotiating involves asking the important questions to suppliers, questions like: What can we do differently that is costing you money? Can you explain the steps that you currently take to get your product to us? How many trips to the job are you currently making?, then acting on the answers to pursue long-term cost reductions. These negotiations strengthen both companies.
Lowering Cost of Ownership
Purchasing is so much more than getting three bids and choosing the lowest one or simply demanding lower prices. A good purchasing process continually prunes cost from the supply chain from your business as well as the vendor's business. They consistently reconfigure and redesign processes to remove cost eliminating the processes and even specifications that are no longer bringing either party benefit. A good supply chain professional takes the time to listen to both sides to discover areas where quality can be improved, innovation can be used and costs can truly be reduced rather than just taking a cut and run approach.
Adding Depth to the Purchasing Process
When speaking with a local vendor, he quietly mentioned that he would take any work at any price just to move product. Some days later when speaking to his competitor, he seemed almost aloof at the thought of supplying to a custom home builder. Instead, he boasted about all the commercial work he had gotten into. All the while, the price for the raw materials to make the product has been trending downward for months.
Relationships like this and ongoing research allows NEMAsource to see weakness in the supply chain and where the best long term supplier fit applies. By partnering with a supply chain professional, builders can reach beyond their sphere of influence and tap into otherwise unseen market conditions.
Consider the Possibilities
Five years ago, even two years ago, most builders were so inundated with new contracts that using the vendor from the last project was the safe bet. Any inefficiency could be covered up with higher prices and passed off to the consumer as market appreciation. Today, the landscape has completely changed and with it, the purchasing function has become a key player in driving down costs without losing focus on timeliness quality and relationship.
Now is the time to expect the maximum value from your supply chain. If you are looking to add depth to your purchasing function, NEMAsource is your best place to begin creatively lowering your cost of ownership without losing touch with your business. For more information, visit nemasource.com
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