Your choice heads or tails
The trouble in cost cutting for most firms is caused by Maverick buying. This concept can be seen often in every organization and yet is ignored. Before digging deep into the concept, here are the basics.
Every organization in the corporate world has framed contracts for the materials used on regular basis, yet at times when a situation demands same materials have to be bought urgently which leads to maverick buying. Where the organization sometimes ends up paying more than what has to be paid, but could also get the same goods for the price lesser than what it regularly pays.
Maverick buying is nothing but purchasing of goods off-contract and off-standard. The traditional process of procurement is generally time-consuming which sometimes makes it a demand of situation to opt for Maverick buying. The positive side of this method is that you get to know how the market is for the required product, if the supplier contacted is fair or not. The biggest defect in this method comes when it has to be recorded in an SAP (System, Applications, Products) or other ERP systems where a whole new data set has to be created for just a single purchase.
If the firm has to get a small volume of goods then the cost increases with the traditional process but maverick buying helps in cost-cutting in such situations. But at the same time, it negatively influences the performance measures. Suppose the employee responsible for maverick buying turns to be less responsible, not good with negotiations or greedy the method can be troublesome but if the right person handles this concept, the company has chances of raised profits.
On you to decide if Maverick buying is on the winning side of the tossed coin or the losing one. Learn more with Metacog Solutions.