Purchasing, Negotiating, and Cost Reduction Best Practice

Introduction

This course will assess an organisation’s revenue that is spent on goods and services – everything from fundamental materials to spares and stocks. Hence, when the target is to increase earnings by reducing costs, world-class organizations look very carefully at their purchasing strategies.

Success in purchasing is relying not only on knowing the potential opportunities, but more importantly, and the focus of this course, is the knowledgeable implementation of the methods, processes, and methods that should be utilized in order to become a leader in obtaining real supply management savings through negotiations and comprehending cost reduction

This course will feature:

 How to efficiency master cost reductions.
 Processes for developing purchase price index.
 How to assess supplier prices.
 The vital role of planning in successful negotiations.
 Approaches in negotiations.

Objectives

 Assess the key features in spend profiles.
 Evaluating costing reduction opportunities.
 Comprehending supplier pricing structures.
 Apply purchasing strategic plans.
 Build up common approaches in planning for negotiations.

Course Outline

Day 1

Continuous Improvement in Cost and Productivity

 How do other functions view purchasing?
 A Purchasing Savings Model.
 Total Cost of Ownership Models.
 Cost Reduction Initiatives.
 Establishing a Strategic Focus with Pareto Analysis on Cost.
 Modern Methods of Analysing the Spend.

Day 2

Defining Cost Reduction Opportunities

 Enhancing Company Purchase Price Index and Comparing to External Indexes.
 Comprehending the Supply Marketplace and how Suppliers Price.
 Benchmarking best practices in Cost Reduction.
 Resisting Price Increases.
 Supplier Performance Measurement.
 Cost Saving Methods.

Day 3

Methods of Price Evaluation

 Price Justification.
 Methods of Price Analysis.
 The Competition that leads to price reduction and evaluation.
 Methods of Cost Analysis.
 Breaking down the Elements of Cost.
 Developing “Should Cost”.

Day 4

Successful Negotiations

 Negotiation Skill Sets.
 Steps in Negotiation Preparation.
 Methods of Persuasion.
 What Does Win/Win Really Mean?
 Determining the Issues.
 Rating & Valuing Issues.

Day 5

Determining Strengths and Weaknesses

 Know Your Better Alternatives to Negotiated Agreements (BATNA).
 Analysing the Other Side.
 Negotiation Objectives Diagram.
 Prepare the Negotiation Team.
 Tips for the Actual Negotiation.
 Participants will negotiate model cases & discuss the results to provide an opportunity for hands on experience.