Devoted to purchasing, purchasing agents, and all things related

I found an interesting post that I want to share.  Dave Hudgeon, a vendor management consultant in Australia, writes a blog called appropriately enough, Vendor Management.

He recently worked up a simulation to show the possible savings differences between putting a commodity out to bid and simply renewing existing contracts.  he commented that he's noticed, "under-resourced procurement departments are often so overwhelmed with day-to-day vendor management issues that they roll-over contracts rather than go to market."

I call that the "too busy putting out fires to have time to build a fire station" problem.  (That deserves its own post a later time!)

Visit his website, specifically this post, to see the model in action and discover the savings difference.  (You'll be impressed.)  Dave also offers to send the spreadsheet to anyone who asks him by e-mail.