Introduction to Negotiation in Procurement
- What is Negotiation? What are the different types of negotiation?
- How to classify a particular negotiation?
Preparation for Negotiation
- Why is preparation important? What constitutes good preparation?
- How do you prepare for an important negotiation?
- What is BATNA? Reservation Price? How do you develop your BATNA?
- Barriers and Power in negotiation; Unintended consequences from preparation
The People Factor
- The “Opposition”: Knowing your “opponent”; Difference between organization and individual objectives; Organization levels in negotiation; Building relationships and trust; Cultural differences and similarities
- Your Team: Subordinates & Bosses; Aligning Roles & Responsibilities
Due Diligence on Supplier Cost Structure
- Importance of knowing the supplier’s cost structure
- Finding out about your supplier’s cost structure
- Identifying key cost drivers in your supplier’s operations for this RFQ
- How to best use this information
Due Diligence on Supplier Cost Structure
- Importance of knowing the supplier’s cost structure
- Finding out about your supplier’s cost structure
- Identifying key cost drivers in your supplier’s operations for this RFQ
- How to best use this information
Understanding your Supplier’s position
- The real motivation behind your supplier’s need to negotiate
- Their financial situation and performance in the stock market
- Do they have specific objectives for this negotiation?
Data at Your Fingertips – Tools & Analysis
- Total Landed Cost / Total Cost of Ownership estimation analysis
- Overall market analysis for this commodity/component
- Impacts of FX variability, INCO terms, other specific negotiation parameters
The 10 Negotiation “Rules”
- Importance of knowing the supplier’s cost structure/li>
- Finding out about your supplier’s cost structure/li>
- Identifying key cost drivers in your supplier’s operations for this RFQ/li>
- How to best use this information/li>
Conducting the Negotiation
- The real motivation behind your supplier’s need to negotiate
- Their financial situation and performance in the stock market
- Do they have specific objectives for this negotiation?
Ethics in Negotiations
- Total Landed Cost / Total Cost of Ownership estimation analysis
- Overall market analysis for this commodity/component
- Impacts of FX variability, INCO terms, other specific negotiation parameters
The Post Negotiation Analysis
- How well do you think you did? How was conflict handled?/li>
- Type of solution achieved; Buyer’s and Seller’s Surplus Estimates/li>
- State of the future relationship; Storing the “lessons learned”/li>
Negotiation Exercises
- Case Studies & Negotiation Games