Invistics

Order less and pay on time

Tuesday, November 29th, 2011 : 0 Comments

It was the title of the blog post that caught my attention: Don’t Be a Scrooge With Your Suppliers, written by Robert J. Bowman, on SupplyChainBrain.com

What follows is a well-thought out post on how we treat our suppliers. Some buyers pay slow as a way of managing cash flow. And I agree with his ideas, but I have a third option to suggest.

Mr. Bowman asks: So which way to go? Hoard cash like Scrooge in his counting house, or adopt a “we’re-all-in-this-together” approach to surviving a tough economy?

My recommendation is to order less and pay on time. With a healthy inventory – and by “healthy” I mean lean and optimized – paying on time becomes much more feasible. A bloated inventory is a waste of space and a financial burden. Do yourself – and your suppliers – a favor and right-size your inventory.

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