Free Analysis Reimagining The Supply Chain Visible experts think bigger, and obsess smaller, across the supply chain—to help companies store, package, fulfill and ship better.
Most senior procurement professionals would agree that this is the preferred way to handle alliances and strategic supplier relationships, which collectively account for a large proportion of supply chain spending.
The team on the other side of the table? Nobody should ever underestimate the importance of securing the support of top management and the heads of the business groups impacted by the negotiation.
Download the Special Report: Nor should there be a question about the need to solicit and evaluate proposals from suppliers. When competitive solicitations are part of an optimal multi-stage sourcing strategy, the supply chain management team has the advantage of beginning the negotiation from a known point.
At the same time, it is essential to craft a clear strategy for the negotiation. This strategy should formalize the primary and secondary objectives to be addressed with the supplier. In fact, preparation should go much further. The remainder of this article will describe seven preparation techniques that can empower the procurement team to produce a winning negotiation performance time after time.
We have come to understand that the average sales team usually enters a high-value negotiation knowing far more about the buying organization than the other way around.
This procurement executive conceded that the sales group was far more prepared for the negotiation than was his own team. This document not only provides important financial information that can be advantageous to the buying organization—everything from profitability to debt load to revenue growth—but it can also reveal business plans about capacity, expansion, and so forth.
Stock analysts are paid experts who review company operations and identify strengths and weaknesses—exactly the type of information we need to have before entering a key negotiation. This lets you know when there is news about the company or when the stock increases or decreases by a predefined amount.
With this advance notice, you can arrange to have one of your company lawyers attend the meeting. The buying organization can close the door on any issues raised due to an unannounced participant.
And the buying team can sequence all the negotiation issues in a way that will build momentum in the negotiation, lead more logically to resolution of key issues, and more readily drive the negotiation toward an outcome that favors the buyer.
Trust takes time to earn; the more you can do ahead of time to establish the foundations of a relationship, the more you are likely to win trust.
Federal Bureau of Investigation employs talented analysts who profile the criminals they want to capture and arrest. Just as importantly, skilled procurement negotiators should profile the behaviors, personality types, temperaments, and learning styles of their negotiating opponents.
There are plenty of ways to learn about the personalities of those your team will shake hands with on the first day of negotiations.
A good starting point is to go to social networks such as LinkedIn or Facebook. The meeting can take place as part of a typical supplier relationship review or it can be set up as a casual business lunch.
As long as the negotiation is not in the immediate future, they will usually be glad to provide this information. And once their opponents are profiled, the negotiation team will be empowered to deal with their leaders in a more innovative manner.
While that may not be strictly true, it certainly underscores the importance of checking on any past relationships between buyer and supplier. Several years ago, our firm helped a large company to renegotiate an important outsourced technology service relationship.
This was a single-source circumstance, and thus our negotiating team had little leverage. Sure enough, the supplier notified the company of a cost increase before we even entered the negotiation session. One key metric put the supplier at a historical 95 percent performance level—a level that was acceptable to the company that we were helping.
So when we entered the negotiations, we took a different approach: We indicated that we would agree to a modest fee increase but nothing near what the supplier had proposed.Reimagining The Supply Chain Visible experts think bigger, and obsess smaller, across the supply chain—to help companies store, package, fulfill and ship better.
Visible is the industry leader in parcel shipping, and enables e-commerce businesses to ship cost effectively so they can compete with the biggest brand names out there today. Ecco has to improve upon its value chain by implementing following: 1) Inventory management.
The capability to pay off the current liabilities i. Equal weight age should be given by the management to design as well as quality.
Stepping into the outsourcing arena, FMCGs witness increasing operational efficiency and increasing productivity thus assisting in streamlining every aspect of the business, from supply chain management and transport logistics to back office administration. Supply chain management is as much a philosophical approach as it is a body of tools and techniques, and typically requires a great deal of interaction and trust between companies to work.
The flexibility of the supply chain management refers to the capability of the company to alter and react to the vagueness of the environmental factors.
It has been observed that the flexibility of the supply chain is considered to be a very important factor in creating a sustainable competitive edge within the potential markets.
ECCO A/S – Global Value Chain Management: Case write-up Joycelyn Woo Executive Summary ECCO is a Denmark-based, global footwear company that produces shoes for work and leisure.
It prides usability as its highest design priority, stating that “ECCO is not a fashion brand and it never will be”.
ECCO’s main markets are the United States, Germany and Japan.