Is the money really earned in purchasing? 

Prof. Dr. Andreas Kemmner

Buyers like to talk about money being earned in purchasing. But is that really true? I claim: All partners in a supply chain bear their costs together!

Is there a better example of the fact that a favorable purchase price does not necessarily save money than the EU Commission’s purchasing strategy for Corona vaccines in 2020?

Last year, through intensive negotiations, the EU Commission succeeded in purchasing Corona vaccines from the various manufacturers at a significantly lower price than, for example, Great Britain; however, the contracts were signed later for this purpose. Apparently, the EU pays only 50% of the price paid by the UK per dose of the AstraZeneca vaccine and about 30% less for the Biontech vaccine. That sounds good and like a significant savings, calculated on all EU citizens who want a jab. When the vaccines were delivered, we quickly discovered that at least AstraZeneca supplied the UK faster and more reliably than the EU. The British had ordered faster and paid more. AstraZenica supplied the superior customer better, which should not surprise anyone who is at home in supply chain management. We may be glad that the bad customer EU is better served by the supplier Biontech/Pfizer than it actually deserves.

If the prices are correct, which the newspaper WELT published some time ago, the EU saves about 6€ per dose of Biontech jab and just under 1.80€ per dose of AstraZeneca. If the EU had paid 20€ more per vaccine dose, the additional costs would have been 18 billion €; little money compared to the approx. 11 billion € that each month of the corona crisis costs for the Federal Republic of Germany.

It is not the lowest purchase price that counts, but the total cost of ownership. What you squeeze out of the supplier in one moment, he takes back in another: the costs of a supply chain are paid for jointly by all those involved!

Prof. Dr. Andreas Kemmner

Autor | Author

Prof. Dr Kemmner has carried out well over 150 national and international projects in over 25 years of consultancy work in supply chain management and reorganisation.

In 2012, he was appointed honorary professor for logistics and supply chain management by the WHZ.

The results of his projects have already received several awards.

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