How would you describe smart
Smart purchasing involves the segmentation of
purchasing requirements and suppliers in order
to understand where your purchasing dollars are
going, as well as the opportunities and risks. A
four-quadrant criticality grid is often used to
evaluate purchasing requirements based on
expenditures and the number of supplier options
For some materials, companies may have
numerous options; for others, there may be only
a single source – that's where you need to be
especially careful. The strategic quadrant offers
high perceived value. This is where suppliers
develop long-term relationships by offering
product development, a range of services, and
innovation. In the standard quadrant, criticality is
low on both axes. This would be for items like
office supplies. It's considered the least risky
area because expenditures are low and many
suppliers are available.
A fourth area is the market-driven quadrant,
where expenditures are high and a variety of
suppliers are available. Here, customers are
looking to minimize cost. Xiameter, for example,
would be a good choice for buyers in the marketdriven
quadrant, because it doesn't come with
unnecessary technical service or solutions.
Customers purchasing in this quadrant don't
need product support, innovation, and additional
How is purchasing different online?
It's considerably more efficient and faster. If I
want to buy equipment for a plant, for example, I
can go to dozens of websites to look for the best
price and features we need quickly, without
having to submit bids and make phone calls. The
Internet also provides an easy way to locate
hard-to-find materials. If somebody needs
dimethyl fluid and doesn't realize it's a silicone, he
can search for it online and find all the
Being able to make purchases when it's most
convenient is another major benefit of online
ordering. We've noticed that some customers
place orders at night or early in the morning.
After a busy day, they may need the flexibility of
being able to order around the clock, from the
office or home.
The "do-it-yourself" nature of online purchasing
is also a convenience. With Xiameter, once a
purchaser places an order, in a matter of
seconds, confirmation of price and quantity is
provided, along with the ship date, freight terms,
and credit terms. There is no reason to call a
customer service representative or fax an order
and wait for a response. All those steps have
been eliminated, which saves time and effort.
When it comes to dealing with delivery, invoicing,
and certificates of analysis, it's all right there on
the Web. The purchaser doesn't have to call his
receiving guy or accounts payable group to ask,
"Did you get it?" His job is done the moment he
pushes the completion button.
In purchasing transactions, you've got a buyer, a
receiver, and the payer. They all have to be
synchronized, or their internal system crashes.
Xiameter allows the buyer to indicate, "When I
place this order, I want to see the order
acknowledgement. When you ship the order,
send the delivery note to my receiving
department. When you invoice the order, send it
to my accounting department." It's not really
different from a traditional paper transaction, but
it's automated and done in real time.
When Xiameter sends an invoice, the customer
automatically receives an e-mail with either a
link or a copy of that document. At the moment
we ship the materials, the customer receives the
documents that indicate the origin, quantity, and
quality of the product. Traditionally, a customer
might have to wait until somebody in receiving
pulls the documents off the shipment, puts them
in an envelope, and sends them to the lab or to
the shop floor. All the paperwork has been
eliminated and each customer's order history is
stored on Xiameter.com.
How does Xiameter enable customers to
be smart purchasers?
The smartness comes in the fact that you can
make purchases 24/7 in real time, and customers
get price protection on their orders, which can be
placed up to 90 days in advance. Xiameter's
prices are market-driven, so if customers watch
market dynamics, they have the potential to lock
in prices that may be lower today than tomorrow.
If customers can buy silicon-based products in
large volumes, don't need technical service, can
plan their material needs two to four weeks in
advance, and want to purchase materials at
market-driven prices, Xiameter may be the right
business model for them.
Smart purchasing also requires finding reliable
sources, especially for critical materials, and
having fallback positions when the unexpected
happens. For example, regional or global issues
can disrupt supply chains. Xiameter's global
reach and ability to source materials from
multiple plants have provided critical benefits.
Having basic plant and finishing plant production
in each region around the world allows us to be
flexible in our supply chain and maintain reliable
supply for customers.
What do you see for the future?
We're moving toward a time when the computers
of business-to-business customers will help
manage their inventory. Connectivity devices can
recognize when supply of a raw material is low
and automatically send a signal to the supplier's
system to reorder. Now that's a smart purchase.
Once parameters have been established and
more companies operate on global IT platforms,
they will have the functionality to interface in that
way. The signal could come from a radio
frequency identification tag, a bar code, or even a
supply tank that recognizes when its contents
have fallen below the reorder level, triggering the
signal to fire off a purchase order. There's even
software that can translate one company's
system to another, even if it's completely different.
We're moving in that direction.
To learn more, visit Xiameter.com
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is a registered trademark of Dow Corning Corporation.
is a registered trademark of Dow Corning Corporation.