Higher prices but lower profits

Summit, Oct 2007 by Hansen, Jon

With the advent of agent-based modeling and the emergence of the meta-enterprise application, we are entering a period of discontinuous innovation. Never before has the buyer had at their disposal the tools that equip them with critical intelligence on a real-time basis. This in turn creates both visibility and efficiency throughout the entire supply network. The end result is better prices for the buyer while still maintaining a fair and equitable level of profitability for the seller.

This eliminates a variety of problems including supply base erosion, myopic or narrowly defined costing practices, and diminishing end-customer service levels. It could also give senior executives a reason to possibly rethink a planned utilization of an outsourcing service for their purchasing requirements.

Note: To obtain a copy of the Caltech paper contact Jon Hansen by email at jhansen@procureinsights.com with "Caltech Paper" in the subject line. For the Berkley Paper, use the same e-mail address only reference "Berkley Paper" in the subject line.

Jan Hansen is president and CEO of Ottawa-based e-Procure Solutions Corporation. He has been involved in procurement initiatives for the last 14 years. He can be reached at jhansen@eprocuresolutions.com.