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Industrial Purchasing Processes

Muddling Through

Henrik Blomgren

on 21 April 2016

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Transcript of Industrial Purchasing Processes

The art of "Muddling through": And a million Dollar Advice
Industrial Purchasing processes
When industry purchase:
Knowing is everything
- Interdependence internally
- Different units involved
- Product Complexity
- Rarely fixed
- Buyer-Seller Interdependence
- We need them, they need us
- Complexity
- Who do actually decide?
The context:
- The corporate context around it (Do they earn money?)
- Their overall strategy (Apple vs Microsoft)
- The kind of industry (Process, Volume, Single Parts)
- The overall culture of that industry (health care vs white goods)
- The overall business cycle (recession vs heydays)
Roles in The buying center:
- Initiators who suggest purchasing a product or service
- Influencers who try to affect the outcome decision with their opinions
- Deciders who have the final decision
- Buyers who are responsible for the contract
- End users of the item being purchased
- Gatekeepers who control the flow of information
Provision in sales of cars?
- How many units involved?
- R&D/Marketing/Operations/Finance
- What matters to whom?
- Content/Price/Quality/lead time?
- In what order should I talk to them?
- Getting everyone on board.
- The Buying Center (Where is it? Is there one?)
Why don´t company's want to tell us how their purchasing process do function?
Knowledge is power
Kickback at Beijer or if you suggest SAP?
How important is this one for your powerstation?
- "Model of Industrial Buyer Behaviour"
- 79 700 hits on Google Scholar
- Lagen om Offentlig Upphandling: LOU
Spending time trying to understand how it "works", works
How come 3 did not make it in hospitals?
Assume selling to KTH
Some Cases:
It is not that common to negotiate when buying a cup of coffee.

But in industry nearly everything is negotiable: Product, Service, Solution, Price, Delivery time, Quality etc etc etc
- To some people negotiating is like a huge political game...
- To others it is like Muddling Through with the help of technology...
- Who controls the size of the rooms in my apartment?
- Who controls what kind of doors that are chosen in my apartment?
- Who did control your choice of Education that you study when in that apartment?

How to "interfer" and influence that?
- To whom?
- How?
- What?
Don´t assume how it works...
- From the outside it is often a mystery
- On the inside they know...
- Try to get insights from the inside
Simple testing:
- Why is there lot of high tech equipment at hospitals, but they often lack simple systems for logistics?
- Why are "Skatteverket" better in utilizing ICT than many private companies?
- Why are seldom a payback-time of less than 3 years an argument when trying to sell to Banverket?
The Million Dollar Advice:
Get to know your customer!
Gaskets within Radio-base-station
Is it Likely Apple would pay heavily for the box?
Rule of Thumbs:
- Different industries different "importance" of units (Sales at ICA vs R&D at Ericsson)
- Different companys and History different units (Volvo vs Saab Automobile)
- Different levels within the corp (Start down-under)
- The education/position of the individual within the unit
Why did Bo A always change purchasing org?
(The model Relation-ship in the midle
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