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  • Writer's picturePeter Smith

FRIDAY 15th OCTOBER 1999: Will Suppliers Save Us? No, They Won't

I talk to J and our Human Resources adviser about the warehouse in Cheadle. We think we can do the closure, or at least most of it, by year end. The pressure is obviously on to deliver the savings as quickly as possible. But we will have to have contingency plans just in case.

Take a call from the Finance Head at the Retail Bank. They are looking at their plans and they are struggling to see how they can hit next year's profit targets. Can we approach our big suppliers and tell them they are going to have to reduce their prices to us? Yes, I'm sure I can handle that, I'll just explain that our £2,300 million annual profit is really not enough and I'm sure they'll be delighted to chip in!

I explain to Simon that there is a bit of a credibility problem here, as well as some dubious ethical issues. There have been occasions when this sort of drastic approach has worked (like Chrysler) where the purchasing company was on the edge of bankruptcy. Suppliers can then have a real interest in helping survival, but we are not quite in that position. And of course, my whole team's raison d'etre is to try and buy better - I would like to think that our suppliers are not making the sort of margins where they could just offer up a few more percentage points because we ask them to!

Go up to Corby in the afternoon for the Institute of Purchasing Council meeting. A few other financial services people are involved. There is general amazement that BoS can bid for NatWest, given the relative sizes of the companies, and some people seem to think it is all a bit of a joke. I don’t think they realise just how likely it is to succeed.

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