How many firms have gone from huffing and puffing about the competitive rates at which they secured lines of credit, to quietly admitting that they no long have lines of credit. As the old saying goes “bad loans are approved in good times”. The abrupt end to the good times means that, along with standard lending covenant enforcement, banks have taken every measure to securitize debt.

The short verse; many companies that took previously on debt service in order to fund growth, capital investment or even to cover expenses in business downturns, no longer enjoy that option.

It’s no secret that firms are taking swift action to reduce expenses in the manner that most quickly frees up expenses, personnel cuts. Additionally, every news day features another press release touting targeted cost reduction initiatives. In many cases, urgency will drive these initiatives into the realm of unsophisticated, unit price negotiations. While short term cost savings projections will flow like honey. The long term viability of the supply base will be compromised.

Yet, for those who maintain perspective, the universe is in balance. Strategic Sourcing firms that maintain the emphasis on the strategic now have a window of opportunity to present compassionate alternatives to RIF (reductions in force) that also present long term value to the supplier and ultimately strengthen the supply base.

It’s a message that we should deliver as though lives depend on it; because they do. Strategic Sourcing firms have never seen such a window of opportunity to introduce initiatives that can serve as powerful, effective alternatives to RIF and price haggling. It’s incumbent upon those who wish to advance or even remain at the forefront of the strategic sourcing sector to deliver the message and the results.

As an old friend once told me, ‘those who do good, will always do well”. What a great time to distinguish strategic sourcing as something more than cost reduction. What a great time to do great things.

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  1. Assuming we can get by the "Dumb Company" Mantra that seems to be taking the market by storm these days:

    http://blog.sourcinginnovation.com/2008/11/07/how-dumb-is-your-company.aspx
    http://blog.sourcinginnovation.com/2008/11/14/dumb-company.aspx
    http://blog.sourcinginnovation.com/2008/12/12/dumb-company-the-lyrics.aspx
    http://blog.sourcinginnovation.com/2008/12/05/dead-company.aspx

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