Digital Dealer - November 2017 - 23

suppliers that Accounts
Payable must set up,
manage and pay
4. Managers
spending an inordinate
amount of time taking
supplier calls and having supplier meetings
5. Organizational
uncertainty about who
the preferred suppliers
are for a given expense
category
6. Prices that seem
to be increasing
7. Costs that seem to
be rising
8. Employees that
are constantly in "shopping mode" looking for
the best price on post-it
notes or some other
supply item
9. Management
uncertainty about the
efficiency or effectiveness of the purchasing
function
10. Profitability not
meeting expectations
Decentralized purchasing functions can
work...they are working
in your organization
right now. Products and
services are being purchased, suppliers are
being paid...everything
is working, right? The
answer is most likely,
yes, everything is working, but at what cost to
the organization? The
purchasing function can
be organized in a decentralized environment
that achieves three
key objectives...save
money (new profits),
save time (increased

efficiencies) and reduce
risks (fewer surprises).
SAVE TIME

Most organizations are
running lean...they don't
have the luxury of wasting time, duplicating efforts and repeating tasks.
People are expensive so
improving efficiency and
effectiveness can reduce

RESPONSIBILITIES - Put

a name or title next to
each of those expense
categories in your plan
with a due date for an
expected recommendation with all of the support
to make a decision.
Benefit: Sourcing a category full of multiple items
(shop supplies = 450

...UTILIZING ONE
SUPPLIER AND DOING
THE WORK RIGHT IS
MUCH MORE EFFICIENT
AND A BETTER USE
OF YOUR LABOR THAN
SHOPPING ITEMS
EVERY DAY..."
labor costs across an
organization.

1. IMPLEMENT A
SOURCING PLAN - You

have roughly 100 expense categories to manage across your organization out of 130 options.
Develop a sourcing plan
that plans to work one
or two categories each
month until all categories
are complete. Benefit:
Working on an expense
category once every two
years, utilizing one supplier and doing the work
right is much more efficient and a better use of
your labor than shopping
items every day, adding
new suppliers and adding
complexity and cost to
the organization.
2. ASSIGN CATEGORY

high frequency items) is
much more efficient that
shopping, quoting, talking
to suppliers and adding
new suppliers for single
items. Add a supplier that
handles all shop supplies
rather than five suppliers
that support only parts of
the category is the most
efficient approach.

3. IMPLEMENT PREFERRED SUPPLIER
PROGRAM - Utilizing one

trusted, competitive supplier will be much more
efficient and cost effective than using multiple
suppliers. Benefit: Fewer
suppliers in an expense
category will give you
greater pricing leverage,
lower prices and costs.
Fewer suppliers will result
in fewer supplier meet-

ings and fewer invoices
that need to be routed
for signature, and fewer
suppliers that need to
be managed and paid.
REDUCE RISKS

The commitment of
limited company funds
occurs through three
methods...a purchase
order, a contract or an
invoice approval. To reduce financial and legal
risks associated with
purchasing activities, I
suggest you consider
the following:

1. IMPLEMENT
PURCHASING POLICIES - A simple set

of purchasing policies
implemented across
an organization will
reduce risks associated
with the commitment
of funds, selection of
suppliers and payment
processes. Benefit:
Purchasing policies
provide a much-needed
guide to acceptable
employee actions and
supplier interactions.
Well-drafted purchasing
policies can be used to
get out of bad supplier
agreements signed by
"unauthorized employees."

2. CENTRALIZE CONTRACTS - All supplier

contracts should be
minimized first and foremost. But when they
are necessary, all original contracts should
reside with the CFO or
controller so there is
a "go to place" to find

D I G I TA L D E A L E R . C O M

Continued on pg. 24

NOVEMBER 2017

23


http://www.DIGITALDEALER.COM

Table of Contents for the Digital Edition of Digital Dealer - November 2017

Digital Dealer - November 2017
Contents
A Letter from the Show Director
Don’t Be a “Management Jerk” and Steps for Handling Them!
Attempting a No-Huddle Offense? How’s That Working for You?
Is a Financial Partnership in Your Future?
Fallacy
You Can't Take a Train 500 Miles on 400 Miles of Track
4 Tech Tools That Decrease Employee Turnover
Organize for 2018 – Expect Greater Efficiencies and Profitability, Fewer Surprises
Retail Warranty Reimbursement: Leveling the Playing Field
Cracking the Car Code on Selling to the #1 Buyer: Women
Professional Voice-Over Secrets!
CAMERON JOHNSON Dealer Principal, Magic City Ford Lincoln
When It Comes to Social Media... Don't Step on a Rake
The Online Shopping Experience Has Radically Changed. Your Dealership Can Reap the Benefits.
The New Car Manager's Modern Guide to Merchandising
Top 3 Information Technology (IT) Recommendations for Stability and Increased Productivity at Your Dealership
That’ll Bee $128 Forda Tech Ta Lookatit - Ouchie
Only 5 ½ Cents- Per-Mile to Maintain a $50K Machine! Wow!
Digital Dealer - November 2017 - Digital Dealer - November 2017
Digital Dealer - November 2017 - Cover2
Digital Dealer - November 2017 - Contents
Digital Dealer - November 2017 - A Letter from the Show Director
Digital Dealer - November 2017 - 3
Digital Dealer - November 2017 - Don’t Be a “Management Jerk” and Steps for Handling Them!
Digital Dealer - November 2017 - 5
Digital Dealer - November 2017 - Attempting a No-Huddle Offense? How’s That Working for You?
Digital Dealer - November 2017 - 7
Digital Dealer - November 2017 - 8
Digital Dealer - November 2017 - Is a Financial Partnership in Your Future?
Digital Dealer - November 2017 - 10
Digital Dealer - November 2017 - 11
Digital Dealer - November 2017 - 12
Digital Dealer - November 2017 - Fallacy
Digital Dealer - November 2017 - 14
Digital Dealer - November 2017 - 15
Digital Dealer - November 2017 - You Can't Take a Train 500 Miles on 400 Miles of Track
Digital Dealer - November 2017 - 17
Digital Dealer - November 2017 - 18
Digital Dealer - November 2017 - 19
Digital Dealer - November 2017 - 4 Tech Tools That Decrease Employee Turnover
Digital Dealer - November 2017 - 21
Digital Dealer - November 2017 - Organize for 2018 – Expect Greater Efficiencies and Profitability, Fewer Surprises
Digital Dealer - November 2017 - 23
Digital Dealer - November 2017 - 24
Digital Dealer - November 2017 - Retail Warranty Reimbursement: Leveling the Playing Field
Digital Dealer - November 2017 - Cracking the Car Code on Selling to the #1 Buyer: Women
Digital Dealer - November 2017 - 27
Digital Dealer - November 2017 - Professional Voice-Over Secrets!
Digital Dealer - November 2017 - 29
Digital Dealer - November 2017 - CAMERON JOHNSON Dealer Principal, Magic City Ford Lincoln
Digital Dealer - November 2017 - 31
Digital Dealer - November 2017 - 32
Digital Dealer - November 2017 - 33
Digital Dealer - November 2017 - 34
Digital Dealer - November 2017 - 35
Digital Dealer - November 2017 - When It Comes to Social Media... Don't Step on a Rake
Digital Dealer - November 2017 - 37
Digital Dealer - November 2017 - The Online Shopping Experience Has Radically Changed. Your Dealership Can Reap the Benefits.
Digital Dealer - November 2017 - 39
Digital Dealer - November 2017 - The New Car Manager's Modern Guide to Merchandising
Digital Dealer - November 2017 - 41
Digital Dealer - November 2017 - Top 3 Information Technology (IT) Recommendations for Stability and Increased Productivity at Your Dealership
Digital Dealer - November 2017 - 43
Digital Dealer - November 2017 - That’ll Bee $128 Forda Tech Ta Lookatit - Ouchie
Digital Dealer - November 2017 - 45
Digital Dealer - November 2017 - Only 5 ½ Cents- Per-Mile to Maintain a $50K Machine! Wow!
Digital Dealer - November 2017 - 47
Digital Dealer - November 2017 - 48
Digital Dealer - November 2017 - Cover3
Digital Dealer - November 2017 - Cover4
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