Leading edgesupplymanagemented1 april2011

  • 212 views
Uploaded on

 

  • Full Name Full Name Comment goes here.
    Are you sure you want to
    Your message goes here
    Be the first to comment
    Be the first to like this
No Downloads

Views

Total Views
212
On Slideshare
0
From Embeds
0
Number of Embeds
0

Actions

Shares
Downloads
4
Comments
0
Likes
0

Embeds 0

No embeds

Report content

Flagged as inappropriate Flag as inappropriate
Flag as inappropriate

Select your reason for flagging this presentation as inappropriate.

Cancel
    No notes for slide

Transcript

  • 1. Volume 1, Issue 1
  • 2. Page 2Welcome!From Next Level Purchasing Association Founder Charles Dominick, SPSM, SPSM2 Welcome to Leading-Edge Supply Management! I’m excited to share with you the inaugural issue of the official online magazine of the Next Level Purchasing Association. In this issue of Leading-Edge Supply Management we’ll focus on the topic of negotiation, a very important skill for today’s purchasing professional. You can expect upcoming editions of the magazine to include educational articles and tips; purchasing and supply chain vacancies; commodity indices; news on upcoming member events; and more! Due to our green initiative, Leading-Edge Supply Management will only be available in an electronic format, but I encourage you to download a copy and reference the articles as needed. After all, this is a great educational resource that contains tips you can use to help make your job easier! So, let’s get started! To your career, Charles Dominick, SPSM, SPSM2 Using Collaboration In Negotiation: 3 Steps How Can You Collaborate When You Negotiate? Win-win negotiation uses collaboration as opposed to confrontation as the basis for persuasion. In some negotiations where you and your supplier have opposite positions on an issue, you may think that there is no opportunity for collaboration. But there usually is if you use these three simple steps: 1. Have both parties share what their interests are. In our online class "Powerful Negotiation For Successful Buying," we teach that an interest is a need that you desire to have satisfied and a position is one scenario that could satisfy an interest. For example, a supplier may have an interest in making a 20% profit margin on its sales to your organization and its position will be that it wants to charge $5.00 per unit. Your interest may be that you achieve a 10% cost savings and your position is that the supplier should reduce the price to $4.50. If youve reached an impasse, it can be more effective to discuss interests rather than argue over positions. 2. Brainstorm to identify several possible solutions. After interests have been discussed, ask the supplier to work with you to come up with multiple scenarios that would enable both parties to achieve their interests. The goal is not to come up with the perfect solution just yet, but to gather several different ideas that can be later pared down. Dont feel the pressure to do all the talking. Sometimes, a supplier can come up with a good idea and they will be more likely to buy into it - or at least reluctantly honor it - if they come up with it as opposed to you imposing it on them. For example, the supplier may say "I could get the price down to $4.50 if you opted for a single material packaging instead of a two-material packaging. Id still make 20% because my costs would be lower and youd achieve your savings." 3. Jointly select the best solution. After brainstorming, you may have to whittle down some of the suggestions that just dont work. But, hopefully, youve come up with several potential solutions that accommodate both parties interests. Together, you and the supplier should select one that makes the deal feel like a "win" for both parties. “Using Collaboration in Negotiation: 3 Steps” by Charles Dominick, SPSM, SPSM2 was originally published in Edition 219 of PurchTips.Leading-Edge Supply Management™ is published monthly by Next Level Purchasing Association as a free benefit to association memb ers. If youve received acopy of this magazine from someone rather than downloading it directly from the Next Level Purchasing Association, you can si gn up for a free associationmembership to have access to this and other free benefits. Just visit http://www.NextLevelPurchasing.com/nlpamag and submit your name and emailaddress to join the Next Level Purchasing Association. Reproduction of this magazine in whole or in part without written perm ission by Next Level Purchasing isstrictly prohibited. All rights reserved. ©2011 Next Level Purchasing, Inc.April 2011  Volume 1, Issue 1
  • 3. Page 3 In this Issue: 2 Using Collaboration In Negotiation: 3 Steps 3 Negotiation, Ethics, & You 4 Negotiating After "No" 5 SPONSOR ADVERTORIAL: Critical Alert! Is Your Fleet Supply Chain Management on Track? 6 A View From the Field: Implementing a Supplier Quality Manual to Execute Supply Strategies 7 A 21-Point Negotiation Checklist 8 Use Negotiation Skills To Elevate Purchasing SPSM® Certification Question of the Month 9 Price and Commodity Indices 10 Procurement Vacancies 11 Certification and Training Spotlight 12 Beyond the tips…. Is your negotiation recipe missing an ingredient? The Future of Negotiation: Texting?Negotiation, Ethics, & YouHow Do You Persuade Your Suppliers?If you are like most purchasers, you are under pressure  The Cheap Date - Despite the fact that he isto generate lots of cost savings. Unfortunately, the engaged in a negotiation situation with thepressure to boost the bottom line compels some less supplier, The Cheap Date will accept meals,skilled purchasers to cross the ethical line. They use entertainment, and/orquestionable techniques. gifts at the suppliers expense. Even if suchThere are five common ethics-related profiles of acceptance does notpurchasing negotiators. Which describes you? actually influence The The Liar - The Liar will tell any number of lies to a Cheap Dates decision- supplier to persuade that supplier to improve its making, it creates the terms. An example of a lie would be telling a perception within The supplier that another supplier has a price that is Cheap D a t e s Are you employing an ethical negotiation strategy? 10% lower when such a statement isnt true. organization that he is UNETHICAL! being "bought." UNETHICAL! The Exaggerator - The Exaggerator might not tell an  The Professional - The Professional considers outright lie, but her words and behavior may be ethics when negotiating. She knows the designed to trick a supplier into thinking that a characteristics of the other four profiles and larger quantity or longer term contract is to be consciously avoids that type of behavior. And she expected. The Exaggerators intent is to get a better does a great job of negotiating, too! price and not follow through with implied quantity There are so many effective ethical negotiation or term commitments. UNETHICAL! techniques available. You should never have to resort The Open Book - The Open Book will give a supplier to the practices of The Liar, The Exaggerator, The Open information about competitors proposals in order Book, or The Cheap Date to get the results you want. to persuade a supplier to offer a better deal. Of course, the competing suppliers expect their “Negotiation, Ethics, & You” by Charles Dominick, SPSM, SPSM2 was proposals to be kept confidential. UNETHICAL! originally published in Edition 72 of PurchTips. April 2011  Volume 1, Issue 1
  • 4. Page 4 Negotiating After "No" How Do You Respond When Your Supplier Says No? One of the strongest negotiation techniques your supplier suppliers upstream costs. can use is to simply say "no." Your ability to distinguish a real "no" from a "no" used as a negotiation technique is Paint A Picture - Sometimes suppliers need help vitally important. These tips will help you move past the understanding the implications of not reaching first few nos and negotiate a better deal. agreement. Explain the importance of your business to their bottom line. Describe what their business might Shift Focus - Try to shift focus onto another item of value if look like 2 or 3 years out if they lose this deal or if the youre at an impasse on a particular negotiation point. relationship is damaged. Ask how this future state Negotiate a longer warranty period. Ask for some free would affect their personal performance review, products or accessories. Gain agreement on firm pricing career or compensation. for a longer period of time, a downward price Change Players - Insisting on the involvement of a protection clause, better higher-level supplier representative in the negotiation lead-times, or seek might seem elementary, but many negotiators mess greater discounts on this one up. The trick is to find the highest level related (or unrelated) executive who would experience the greatest pain at goods or services. the loss of your business. Aim too high and your pleas Don’t let a supplier’s “no” spell the end a deal. may not be treated as high priorities. Done correctly, Do The Math - Set emotions aside and walk your supplier your contact will help you fight within the suppliers through the business problem you both face. Develop a organization. "should cost" model to determine if there is room for additional cost compression. Benchmark the offer youve received against published industry data from consultants, “Negotiating After „No‟” by Charles Dominick, SPSM, SPSM2 was trade organizations, etc. Offer to analyze and help reduce originally published in Edition 175 of PurchTips.As you probably already know, negotiation is a necessary skill for success in purchasing. As a matter of fact your peershave rated it as the most important skill during an annual purchasing survey in each of the last five years. Unfortunately,many procurement professionals feel that their past negotiation experience will serve them well today. Guess what?Much has changed and supplier-friendly win-win negotiation is the new standard. You have less preparation time thanever. You may even get lured into using the convenient, but often ineffective, method of negotiating by email. If it seemslike you’re at a disadvantage, you are!But you can quickly get the modern procurement negotiation strategies and skills you need to get the best deals intoday’s environment. Next Level Purchasings highly personal and interactive online course “Powerful Negotiation ForSuccessful Buying” will teach you the latest and greatest procurement negotiation strategies so that even the most savvysellers will give you the best deals possible.And better yet, Next Level Purchasing Association members can receive an additional 10% discount if they enroll by April30, 2011. Use the code NLPA411 during checkout. Don’t miss out, sharpen your negotiation skills today!Learn more about Powerful Negotiation for Successful Buying at: http://www.nextlevelpurchasing.com/powernegotiationApril 2011  Volume 1, Issue 1
  • 5. Page 5 SPONSOR ADVERTORIAL Critical Alert! Is Your Fleet Supply Chain Management on Track? Supply chain management ‐‐ it’s a complex topic of the highest criticality. The overarching goals are to minimize order‐to‐delivery time and drive out costs. Achieving these benefits is possible through value-added, innovative solutions that measurably improve both fleet asset utilization and total cost of fleet ownership. So what are these solutions? Today, they rely upon leading‐edge technology and partnerships to order, track and deploy fleet vehicles along the supply chain. A partner with technology and industry expertise can work with and for you to effectively keep the entire process on track. Efficient and Effective Specifications Supply chain management provides control of the entire vehicle acquisition process. The first step is standardizing and streamlining the fleet using efficient fleet specification techniques and resources. Skillful interface with manufacturers and upfitters results in control, centralization and leveraged spend. Competitive Bidding To extract the maximum cost savings from the supply chain process, you should meticulously bid out each step in the process. While this may seem a daunting task, it is the most effective way to achieve supply chain efficiencies and make the most advantageous sourcing decisions. Through leveraging different suppliers and processes, it is possible maintain tighter control of the supply chain while determining more accurate timeframes for delivery. Strategic Tracking After specifications and bidding, the asset begins to move through the supply chain. At this point you need to ensure all tracking mechanisms for that asset are in place. The best methods for tracking along the supply chain are those that proactively monitor the status of all vehicle orders and clearly interpret the flow of information as it relates to your business needs. Organizations may want to employ a complete data integration methodology and weekly status calls with manufacturers and upfitters to proactively anticipate disruptions – and reduce their impact to a minimum. While the resources and time required to effectively manage a dynamic and far‐reaching supply chain may seem daunting, the right partner can help transform it into a strategic business asset. Through partnership you are better equipped to leverage successful innovations, best practice solutions and system advancements to ensure your supply chain is tailored to your specific business needs. Author – Paul Azores, ARI director, strategic consulting, helps customize innovative solutions that streamline complex fleet operations, lower the cost of fleet ownership and create long-term value for clients. ARI, the fastest growing vehicle fleet management company in North America, operates offices throughout the US, Canada, Mexico, Puerto Rico and Europe. www.arifleet.comSidebar Case Study: 2010 PepsiCo Piston CupARI was recognized as a 2010 PepsiCo Piston Cup recipient by the Frito Lay Fleet Team. Frito Laycited three areas of exceptional performance that led to the ARI achievement of this award. First, theARI team assisted Frito Lay with the successful deployment of over 1,200 Sprinter Route Trucks to the 16 Frito Lay Regions withinthe first quarter of 2009. Second, ARI helped Frito Lay meet year‐end financial objectives by providing timely invoicing and financialreporting. Finally, PepsiCo termed ARI’s signature customer service “unparalleled” and praised ARI as a “truly valuable businesspartner.” April 2011  Volume 1, Issue 1
  • 6. Page 6 A View From the Field Implementing a Supplier Quality Manual to Execute Supply Strategies Tim Reis, SPSM Purchasing professionals expend a great deal of time of quality, discuss in detail what the formulating strategies to meet corporate cost reduction and purchaser will require of the supplier new product development goals. And why not? Cost savings when executing the contract. These and new product development are what brings value to our sections must be very detailed and organization and purchasings’ visibility to executive unambiguous to eliminate surprises management. Making use of a well written Supplier Quality which can place your cost reduction Manual (SQM) is the next step to executing your supply strategies in jeopardy. It is a good strategy. practice to reiterate your policy regarding pricing guarantees, delivery requirements, Now that you have proven your strategy by obtaining the minimum order quantities (MOQ) and any other details product or service that meets your cost reduction goals, it’s needed to execute your strategy. Additionally, the cost of time to implement a supplier quality manual to sustain your quality is an essential element to your SQM. The supplier accomplishment. The supplier quality manual, or SQM, is a needs to know the consequences of poor performance. proactive document designed to eliminate post-contract Include in the cost of quality section your corporate debit surprises and events that have the effect of reducing, policy for shipping nonconforming material. delaying, or in some cases, eliminating hard won cost savings. Lastly, the supplier needs to take ownership in the SQM and how it is executed. To accomplish supplier There are no “one size fits all” SQM formats, however all ownership, include a supplier sign off page that makes SQMs share the same basic elements that make them the SQM a part of the purchase order. effective. SQMs typically begin with an introductory statement communicating the corporate mission, informing the supplier “A View From the Field” is a feature written entirely by SPSM-Certified of the corporation’s values and ethics. The next few purchasing professionals. If you are SPSM-Certified and would like to contribute statements convey to the supplier the general requirements to this column, please send an original 300-400 word educational article on that describe the quality management systems, management procurement to responsibility, resource management and product realization. avff@nextlevelpurchasing.com with a business headshot. The last two sections, transaction requirements and the cost Upcoming Next Level Purchasing Association Member Events: Members-only Webinar Purchasing & Supply Management Salaries in 2011 April 26, 2011, at 11:30AM Eastern US Time How is your purchasing salary impacted by:  Years of experience  Education/Certification  Your organization’s size and industry  Where you live In this 45-minute webinar, Charles Dominick, SPSM, SPSM2 will cover all this and more. To register for this free event, login to the association and navigate to the “Webinars” tab. There you’ll find a registration link, be sure to enter a valid email address as attendance details will be sent to you by email. Registrations may be limited.April 2011  Volume 1, Issue 1
  • 7. Page 7 A 21-Point Negotiation Checklist Can A Negotiation Checklist Improve Your Results?As we teach in our online course "Powerful Negotiation For Successful Buying," preparing for a negotiation iscritical for success. Though not intended as a substitute for learning how to prepare or actually preparing,this checklist can guide your preparation for great results.  Identify the primary supplier to negotiate with.  Identify your second-best option in case you cannot reach agreement with your primary supplier.  Determine the format (i.e., face-to-face, phone) and location of your negotiation sessions.  Invite the primary supplier to negotiate and learn who the suppliers principal negotiator is.  Ensure/insist that the supplier assigns a negotiator with decision-making authority.  Assess your leverage over the supplier.  Determine your overall negotiation strategy (e.g., hardball, collaborative).  Identify all the terms that you will negotiate.  Set targets and least acceptable alternatives for each term.  Determine your negotiation tactics (e.g., threatening to use another supplier, emphasizing the benefits to the supplier of doing business with you).  Decide what to concede if necessary to reach agreement.  Develop a timeline for the negotiation process.  Identify the risks to achieving your terms, timeline, and other goals and plan to mitigate those risks.  Develop and share internally a communications plan stating who must be updated on negotiation progress and what information they must keep confidential.  Review notes from previous negotiations, courses, etc. for tips for success.  Anticipate your suppliers reaction to each tactic.  Create an agenda for the negotiation and practice.  Start the negotiation confidently.  Document agreements made and share with the supplier throughout the negotiation process to ensure that no misunderstandings later derail a negotiation in which you have invested much time.  Self-assess after each negotiation session and adjust strategy and tactics if necessary.  At the end of the negotiation, help the supplier feel positive about the new relationship rather than feeling like it lost the negotiation. “A 21-Point Negotiation Checklist” by Charles Dominick, SPSM, SPSM2 was originally published in Edition 204 of PurchTips. April 2011  Volume 1, Issue 1
  • 8. Page 8 Use Negotiation Skills To Elevate Purchasing Are Your Purchasing Negotiation Skills Underutilized?Many purchasing professionals find themselves in "seals the deal" with an internal customer and thesituations where their internal customers (e.g., purchasing department is involved only at the end, theEngineering) cut deals with suppliers and dont involve the supplier is certain of getting the deal and will not bow topurchasing department until the moment a purchase any pricing pressure that the purchasing department triesorder needs to be created. This is a bad practice. to apply.Many companies recognize the consequences of not Salespeople are trained - and many are great - athaving early purchasing involvement and have policies manipulating even the smartest professionals who haverequiring the purchasing department to be given an their guard down because they dont negotiate every day.opportunity to participate in all supplier conversations for These salespeople know what questions to ask that seempurchases expected to exceed a certain value. If you want harmless but actually get the information that they needto convince your management to implement such a policy, to entrench themselves in buying plans and maximizestart by touting your negotiation skills as follows: their margins at the expense of the buying organization.As a purchasing professional, you are an experienced By having a skilled purchasing professional present at allnegotiator. You negotiate frequently, maybe daily. supplier meetings about major purchases, it can help the organization counter these tactics and prevent theNegotiation may not be part of your internal customers supplier from getting that sense of certainty that results injob description. By deliberately keeping you out of a high prices. But negotiation isnt the only skill thatnegotiation, your internal customer is failing to utilize a purchasing professionals bring to the table.resource that can financially benefit the organization.Suppliers flexibility with their pricing is dependent on their “Use Negotiation Skills To Elevate Purchasing” by Charles Dominick, SPSM,perceived certainty of getting the deal. When a supplier SPSM2 was originally published in Edition 224 of PurchTips. SPSM® Certification Question of the Month Question: What are the benefits of earning the SPSM ® Certification? Answer: Next Level Purchasing realizes that employers and purchasing professionals alike want more than just a purchasing management certification to show for their investment. Thats why the SPSM ® Certification is designed to produce measurable benefits to both employers and purchasing professionals alike. Purchasing professionals who have earned the SPSM® Certification report that they have reaped these benefits: Getting better jobs ● Getting more respect Getting excellent performance evaluations ● Getting large pay increases Employers who enroll their purchasing employees in the Senior Professional in Supply Management ® Program can be assured that their purchasing staff will be able to:  Save more money  Do a better and more efficient job of supporting operations  Minimize and manage risk  Function more independently, freeing up management to focus on more strategic work
  • 9. Page 9Price and Commodity Indices Producers Price Index The Producers Price Index (PPI) measures the change in the wholesale selling prices that producers charge for goods and services. It is typical for producers to offset rising prices by passing on the higher costs to consumers in the form of higher retail prices, therefore the PPI is often an early indicator of inflation. Inflation is a decline in the purchasing power of a currency, for example the USD, where each dollar buys fewer goods and services than it could previously. Interpreting the PPI: When the PPI rises, this signals an increase in inflationary pressures. When the PPI falls, this signals a decline of prices and may suggest an economic slowdown. Consumer Price Index The Consumer Price Index (CPI) is used as a measure of inflation. To calculate the CPI, first a fixed “basket of goods” is determined and a baseline of prices is calculated. Then changes in price are calculated for each item, averaged and weighted according to the importance of the item Interpreting the CPI:A higher CPI indicates that the total price of the basket has increased and it now costs more to buy that same basket of goods (inflation). A lower CPI indicates that the total price has declined and now it costs less to buy that same basket of goods (deflation). Each month we’ll include an updated graph of the PPI and CPI as well as the PPI graph of an individual commodity. Send your request for which commodities you would like to see featured in this section to: commodityppi@nextlevelpurchasing.com. To learn more about these and other indices, we recommend reviewing the “Inflation & Prices” section of the Bureau of Labor Statistics (US) website at: www.bls.gov, or by researching indices calculated in your specific country.
  • 10. Page 10 Procurement Vacancies To learn more about these and other vacant positions, visit: http://www.nextlevelpurchasing.com/jobs1Job Title: Vice President, Procurement Company: Flying Food GroupSalary: Withheld Location: Chicago, Illinois, USA Job Responsibilities:  Support unit purchasing managers with food cost, vendor contracts and product supply chain.  Ensure unit audits are conducted in coordination with Regional General Managers and/or Finance.  Update Corporate Procurement policies and procedures as needed.  When contracts are due to end, conduct RFP process to a minimum of three (3) vendors.  Continually source for additional national contracts.  Expand food buy programs and increase discount income for both the airline and FFS segments.  Establish controls to address favorable and unfavorable purchasing variances.  Lead teams of unit purchasing managers and the assignment of commodity categories.  Support all ingredient sourcing and related special projects. Qualifications:  Minimum of a B.A./B.S. degree or an equivalent combination of education and experience  SPSM® Certification a plus  8 or more years in food purchasing related position  Demonstrated experience with key purchasing strategies and implementationsTo apply: Send resume via email to: cjekiel@flyingfood.comJob Title: Senior Supply Chain Manager Company: CDC– CameroonSalary: $120,000 Location: Limbe, Cameroon  Implement procurement strategy and policies.  Forecast procurement needs. Create and implement KPIs. Maintain procurement files.  Continually develop expertise to support growth for new projects.  Monitor macro trends in supplier and contract base and implement plans to react.  Build and develop relationships with key suppliers and customers.  Lead the procurement group in all phases.  Identify and develop training opportunities.  Order materials and services as per negotiated and appropriately approved.  Prepare purchase requisitions, approve and issues purchase orders in accordance with company policy and negotiated terms and conditions.  Track Purchasing activity and measurements.  Training purchasing Clerks and Salesmen in the department.  Discuss defective or unacceptable new goods or services with users, vendors and others to determine cause of problem and take corrective and preventative action.  Ensure supplier compliance with site and company requirements for safety.  Manage vendor relationships and assist in building effective partnerships.  Qualified candidates should be holders of a bachelor in management, business administration or any related field, SPSM® Certification a plus.To apply: Send resume via email to: pbisong@rocketmail.comApril 2011  Volume 1, Issue 1
  • 11. Page 11Job Title: Senior Contracting Agent Company: AmtrakSalary: $63,000 - $80,000 Location: Philadelphia, Pennsylvania, USA This position is accountable for the life cycle of business needs of the organization & requires experience with various complex service & material commodities, as well as procurement policy and procedures. Manages all activities related to a commodity or service, from intent to purchase through delivery. Negotiates complex contracts involving variable costs and non-standard Terms & Conditions. Maintains the highest code of ethics and conduct. 20% travel required. SPSM® Certification a plus!To apply: Send resume via email to: necjobs@amtrak.com Certification and Training Spotlight Dedicated Member of the Month– March 2011 Congratulations to Inna Nirenburg, SPSM! Inna, a purchasing professionals from Pittsburgh, Pennsylvania, USA, completed all six Senior Professional in Supply Management® Program classes and passed the SPSM Certification Exam during the month of February and was selected as March’s Dedicated Member of the Month! 2011 Recipients of the SPSM Certification January February (March continued) Esan A.—Nigeria Albernachie A.— West Indies Angie C.- California, USA Sheila A.—Washington, USA Jyothi B.—India Charlene C.– North Carolina, USA Catherine C.— North Carolina, USA Renee D.– California, USA McCabe C.—Utah, USA Christine C.—Illinois, USA Terri D.—Ohio, USA Milos D.—Slovakia Jason C.—Illinois, USA Christopher J.—Illinois, USA Nikolay D.—Austria Angela D.—Ohio, USA Jana K.– Ohio, USA Kamil F.—Slovakia Sandra D.—Illinois, USA Kimberly M.—Wyoming, USA Lubomir F.—Slovakia Anil G.—India Bryan M.—Missouri, USA Kenya G.—North Carolina, USA Jaikumar G.—India Sheila O.—Indiana, USA Michael G.– Germany Peggy G.—Virginia, USA Terri P.—West Virginia, USA Supratik G.— India Preeti J.—India Julio R.—Alaska, USA Kenneth H.—Florida, USA Kurt K.—Colorado, USA Stephen R.— Ontario, Canada Teresa L.—Arkansas, USA G.S. L.—India Adewale S.—Nigeria Ingrid L.– Slovakia Divya M.—United Arab Emirates Kausar S.—India Jamie L.– Illinois, USA David N.—Arkansas, USA Melanie S.—Ohio, USA Kimberly M.– Ohio, USA Heather N.—Missouri, USA VBTSM S.—India Rajesh M.—India Richard N.—Minnesota, USA Matthew T.—Arizona, USA Inna N.—Pennsylvania, USA Jonathan O.—Illinois, USA Niculae V.—Romania Ana O.—Belgium Cristi P. - Romania James W.—Michigan, USA Kathleen O.—Illinois, USA Jayashree R.—United Arab Emirates Debra R.—California, USA Rajeev S.—United Arab Emirates March Henrik S.—Denmark Timothy S.—California, USA Chris A.– Florida, USA Carrie W.—Indiana, USA Margaret T.—Illinois, USA Darlene B.—Arizona, USA Josh W.—New York, USA Qiong W.—Washington, USA Lubos B.—Slovakia Layne W.—Tennessee, USA Sarah Z.—California, USA April 2011  Volume 1, Issue 1
  • 12. Page 12Beyond the tips…. Is your negotiation recipe missing an ingredient? After reading this month’s edition of Leading-Edge Supply When you demonstrate how important to your company that an Management, youre probably wondering what this "important issue actually is, youll often be surprised at the creativity that the ingredient" is. And I wont keep you in suspense. supplier generates at some point in coming up with a solution that satisfies you. The important ingredient often missing from purchasing professionals negotiation recipes is persistence. Just because a Suppliers get tired of saying "no." Your persistence can gently supplier refuses a negotiation request of yours doesnt mean that nudge them to figure out something positive to respond with you should give up. instead of that dreaded two-letter word... Keep trying. Be the proverbial "broken record." Good luck! ~ Charles Dominick, SPSM, SPSM2The Future of Negotiation: Texting?From Charles’ Purchasing Certification Blog As communication methods have changed throughout history, But when you need a simple response quickly (or want to create negotiation has followed. Prior to the industrial revolution, people that illusion in order to gain pressured concessions from your would negotiate face-to-face when bartering, exchanging suppliers), texting might fit the bill in some limited situations. negotiated quantities of corn for negotiated quantities of musket Now, texting among teens has its own vocabulary and acronyms, balls. like "ur" (for "your," "youre," or "you are"), "l8r" (for "later"), and, of course, the old standby from the email days "lol" (for "laughing out Then, of course, the telephone allowed negotiators in different loud"). So, do we need a similar vocabulary for procurement locations to bargain. Finally, in the past 10-15 years, email became negotiations? I dont know, but just to be safe Ill start one here (& a popular - but sometimes ineffective - medium in which to u can feel free 2 add ur own): exchange offers (our online class "Powerful Negotiation For  2HI - "Too High," an expression that the suppliers price is too Successful Buying" teaches when negotiating by email is smart and high, sent in reply to a suppliers text inquiring about the when it is the most foolish thing a procurement professional can competitiveness of their offer do). Of course, eSourcing technologies allow for all sorts of online negotiation activities.  BAFO - "Best and Final Offer," as in "send ur BAFO"  DL - "Deal," an expression that youve accepted the suppliers So whats next? Stroll through any mall and youre likely to bump offer into (literally) a few teens walking while staring intently at their cell phones as their thumbs flail away on the keypad in the process of  LTAS - "Leaning Towards Another Supplier," sent in reply to a texting (also called "txting" or "sending text messages"). These are suppliers text asking about the status of your decision on future representatives of our suppliers. proposals, meant to compel the supplier to submit a revised, more attractive proposal Is texting the future method of negotiating? Some of you are  SYP - "Sharpen Your Pencil," synonymous with "submit an offer probably saying "I hope not." But the reality is that texting is likely more appealing to me" to creep into the mainstream negotiation process to some degree soon. Naturally, ethics that apply to traditional negotiation will need to apply to negotiation-by-txt as well. With the aforementioned high If you are feeling yourself getting mad, it might be time to read probability of misunderstanding, you want to be careful to not "Who Moved My Cheese?" again. insult the supplier or behave inappropriately. For example, I would never use "LOL" with a supplier as doing so may insult the supplier Now, dont get me wrong. I am not advocating that you go out and and make the supplier terminate the negotiation. Also, be very conduct all of your negotiations by text message from this point careful when using the "F" character, as doing so may indicate the forward. After all, texting has many disadvantages from a use of a profanity, as in "Send ur bid ASAFP." My thumbs always negotiation standpoint, such as: inadvertently add unintended letters to messages, so proofread to  You give the other party time to think through their response ensure that you didnt add that vulgar "F."  You cannot communicate tone-of-voice through texting While some parts of this post are slightly written in jest, I do feel  Texting (at least when I do it) is often rife with errors that texting will rear its head into more and more procurement negotiations in the near future. Therefore, it is imperative to be  The amount of space you have in a text isnt enough for prepared. discussing any substantial issues  You cannot watch for body language clues from the other Never fight change when the writing is on the wall. party  There is a higher probability of misunderstanding And so on...April 2011  Volume 1, Issue 1