My experience is that most purchasing departments exist to cause vendors to fail

My experience is that most purchasing departments exist to cause vendors to fail, engage in political positioning, and/or rent seeking. A good purchasing department functions like a lawyer who is too busy: they make sure you don’t hurt yourself. But a young lawyer trying to prove himself, or a purchasing agent trying to prove himself is something very different. They create problems by trying to create value. I was too naive about big business in my early life. The optimum behavior is to find out what makes the agent successful and give him what he wants even if it is bad for his business. I find this immoral. I want to give organizations what they need regardless of whether they understand it or not. This is most visible in the construction industry where the architects and primary contractors do not possess the knowledge to construct the building, only the suppliers do. But purchasing engages in all sorts of schemes to get reduced prices then trap vendors into bankruptcy by enforcing bids made without sufficient information. And while construction may be the most corrupt field in this regard outside of state dependent contractors, and then state employees – and their corruption the reason for the existence of most code and regulation – the same thing happens at CocaCola, Nabisco, Comcast, Dell, ATT, Intel, Microsoft (less so – they have management problems instead) and dozens more I could name (and not TMobile in my experience). Running a moral business takes more effort but it almost always ends up in your favor in the long term.


Source date (UTC): 2016-01-09 03:43:00 UTC

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