By Rich Weissman
When do you negotiate? Why, always!
That was the message I gave today to a very nice group of procurement professionals attending the NAEB-NE Buyer’s Forum at Holy Cross in Worcester, Massachusetts. This was a group of educational buyers who are challenged on a daily basis to balance budget constraints, sourcing, and internal and external relationships. While I do not purchase for my college, I do understand the intense pressures they are under. Heck…I create some of that pressure for our procurement organization and I know better!
Be it manufacturing, education, not for profits or the service sector, the fundamentals of negotiation are the same. It is not about lowering prices but increasing supplier performance. That message does not resonate in many organizations that are slaves to a bottom-line budget number. But improving overall supplier performance will result in long term cost reductions, service level increases, reduced risk and happier customers. Often, happier customers are willing to pay a bit more for the service that they receive, and that service is a byproduct of excellent supplier performance. A high performing supply base directly contributes to increased customer satisfaction. And that may result in higher margins.
Everyone has their personalized negotiating style and I’ve certainly honed one over the years. I call it being a ‘sophisticated customer’. For the most part, but quite honestly not always, it has worked for me. It includes:
Too many people look at negotiation as a hard bargaining process popular with car dealers and labor unions. If you look at negotiation in the big picture, with ongoing give and take with trustworthy and high performing suppliers, it can be an enjoyable experience where both sides do well.
Endicott College Assistant Professor Rich Weissman teaches management courses for the School of Business and the Van Loan Graduate School. He is also the director of corporate education, which includes the Center for Leadership, Endicott’s management development institute. He is vice chair of the planning committee and also serves on the technology committee and the Institution Review Board. A practitioner turned educator, Weissman has more than 25 years of experience in all facets of procurement and supply chain management. He has held positions with large business units of Fortune 500 companies, medium-sized contract manufacturing companies, small venture-backed Internet startup firms, and third-party procurement, consulting and strategic sourcing firms.
Rich holds an M.S. in Management from Lesley University and a B.A. in Economics from Rutgers University. He is past president of the Purchasing Management Association of Boston and a recipient of the Harry J. Graham Memorial Award, the highest honor bestowed by the association.
The cost and revenue synergies from any M&A activities are always derived from multiple pockets. Companies do plan meticulously to achieve the savings from all departments such as operations, procurement, sales and marketing, general and administrati… Read More
George E. Krauter
In my first installment in this series, I pointed out how those within organizations opposed to outsourcing of the MRO function erect obstacles to success. Read More
Procurement has made strides in moving from a back office spend center to becoming a strategic business partner by driving process improvements, cost savings, and enhanced customer and supplier relationships. Read More
Staples Advantage is the one supplier that offers all the business solutions you need, all with the expertise of a specialty vendor. Read More
It started in 1972 with an idea, a new concept in distribution. Today, Digi-Key Corporation is one of the fastest-growing electronic component distributors in the World. The stimulus for this growth is Digi-Key's customer-centered business philosophy… Read More
Procurement and supply management leaders have a seat at the table, and management’s expectations are high. But what do CEOs really want, and is purchasing delivering on these expectations? This webcast looks at how procurement and supply management … Read More
At world-class companies, purchasing’s influence touches just about every area of spending. But, how exactly do procurement teams get to the point where other departments approach them for help with sourcing such indirect categories as human resource… Read More