Purchasing Seminar Discussion from October 31 that looks at 21 dark or sharp practices that purchasing might use in extreme situations. While not all are bad per se and can offer short term gain they pose long term risk and should be used, if ever sparingly, and by a professional.

1. The 21 most common unseemly acts, not mentioned in
good company, that purchasing professionals may
encounter and practice.
Bill Kohnen October 31, 2013

2. Warning Warning
Warning
 This discussion is not to endorse or suggest that these practices
should be used.
 It is important to have some code as an anchor.
Professional such as ISM or Company policy
 When faced with questionable acts do not take it upon yourself to be
the “police” and investigate and judge a final outcome.
 Most of the 21 items are not illegal per se and care should be given to
reserve judgment before considering the total context in which you
and others are employing these actions
 Even if it seems there is some justification for these acts they are high
risk even for experienced professionals with the longer term damage
to company and individuals potentially being far greater than the
immediate benefit
Bill Kohnen October 31, 2013

3. 21 Dark Purchasing Acts
1. Payments to suppliers –unreasonable
delays
2. Material Acceptance – to avoid/delay or
cancel payment
3. Writing specification to favor a solution
4. Getting Suppliers to provide gifts for
company parties and favors for executives
5. Using confidential information from one
supplier to leverage another
6. Misleading suppliers about expected high
volumes
Bill Kohnen October 31, 2013

4. 21 Dark Purchasing Acts
7. Order cancelations without warning
8. Using unfair leverage with small suppliers
9. Sending one suppliers product to another
for reverse engineering
10. Creating overly complex acceptance
criteria after the fact
11. Disparaging Suppliers Sales people
12. Blaming supplier for your companies
incompetence or mistakes
Bill Kohnen October 31, 2013

5. 21 Dark Purchasing Acts
13. Taking advantage of obvious supplier
mistakes
14. Not compensating a supplier for design or
other assistance then justifying as a cost of
business
15. Not compensating a supplier for design or
other assistance then going to other
suppliers with the ideas provided
16. Exaggerating problems with a suppliers
products/services to extract larger penalties
or concessions
17. Modifying or hiding actual information during
audit. (Customer, ISO/TS, Financial)
Bill Kohnen October 31, 2013

6. 21 Dark Purchasing Acts
18. Taking advantage of a suppliers difficult
financial situation “ Busting Out” a supplier
19. Awarding business to companies that
someone your company has a large interest
in
20. Making personal purchases on behalf of
employees and management
21. Engaging with a service contractor (security,
cleaning, professional) as a screen to avoid
regulations or fair payment and treatment of
employees
Bill Kohnen October 31, 2013

7. Are These Always Bad
Practice?
 Business Conditions sometimes call for drastic
action
 If some of these actions are truly motivated by
a disruptive event and intentions are conveyed
openly to the supply then they may be
uncomfortable but not bad per se
 If these acts are common practice in an
organization and they are done without
sharing knowledge with suppliers they can be
harmful in the long run
Bill Kohnen October 31, 2013

8. Summary
 There is no organization public, private, big or small that is
immune from the pressure to employee these acts.
 In extreme short term situations these tactics used by
professionals can result in benefits which can contribute to the
organizations survival
 There are indeed some small organizations that make these
common practice and even big public organizations that cultivate a
borderline image with suppliers
 Organizations that employ dark tactics constantly do suffer from:
 Constrained Growth
 Actual total cost of service will be higher
 Very real cases of dangerous situations created for employees
 Limited flexibility to respond to market changes
Bill Kohnen October 31, 2013