Developing an Effective Sourcing Plan for Volatile Priced Commodities

Author(s):

George E. Cantrell
George E. Cantrell, Senior Consultant, ADR North America, LLC, 734/930-5070; george.cantrell@adrna.com
William L. Michels, C.P.M.
William L. Michels, C.P.M., CEO, ADR North America, LLC, 734/930-5070; bill.michels@adrna.com

90th Annual International Conference Proceedings - 2005 - San Antonio, TX
Abstract

You may have years of purchasing experience but become frustrated at trying to create a purchase plan for commodities so dynamic that prices change dramatically from day to day or even from hour to hour. When markets are on the move, you must have a clear understanding of the myriad factors that make up the commodity price and how to systemically develop a source plan for your purchases. This session will provide a practical model to get you moving in the direction of evaluating fundamental and technical information that impacts your commodity. You want to know how to study price history and other relevant data to generate a window on the future as you reach towards a sourcing strategy. We will share concepts of managing commodity buy and sell decisions and using your inventory levels as a means to buy over a time period at price levels averaging below the market as well as how to negotiate concessions from suppliers of the cash commodity. This session will also deliver the tools and processes for the experienced buyer to understand the key steps leading towards a well-thought-out sourcing plan for a dynamic commodity, including how to negotiate favorable price concessions from your suppliers.

Developing an Effective Sourcing Plan for Volatile Priced Commodities — 90 KB (PDF)