Volume 1, Issue 1
Welcome! 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 you've 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. Don't 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. I'd still make 20% because my costs would be lower and you'd achieve your savings."
3. Jointly select the best solution. After brainstorming, you may have to whittle down some of the suggestions that just
don't work. But, hopefully, you've 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.
Page 2
Leading-Edge Supply Management™ is published monthly by Next Level Purchasing Association as a free benefit to association members. If you've received a
copy of this magazine from someone rather than downloading it directly from the Next Level Purchasing Association, you can sign up for a free association
membership to have access to this and other free benefits. Just visit http://www.NextLevelPurchasing.com/nlpamag and submit your name and email
address to join the Next Level Purchasing Association. Reproduction of this magazine in whole or in part without written permission by Next Level Purchasing is
strictly prohibited. All rights reserved. ©2011 Next Level Purchasing, Inc.
April 2011 Volume 1, Issue 1
If you are like most purchasers, you are under pressure
to generate lots of cost savings. Unfortunately, the
pressure to boost the bottom line compels some less
skilled purchasers to cross the ethical line. They use
questionable techniques.
There are five common ethics-related profiles of
purchasing negotiators. Which describes you?
The Liar - The Liar will tell any number of lies to a
supplier to persuade that supplier to improve its
terms. An example of a lie would be telling a
supplier that another supplier has a price that is
10% lower when such a statement isn't true.
UNETHICAL!
The Exaggerator - The Exaggerator might not tell an
outright lie, but her words and behavior may be
designed to trick a supplier into thinking that a
larger quantity or longer term contract is to be
expected. The Exaggerator's intent is to get a better
price and not follow through with implied quantity
or term commitments. UNETHICAL!
The Open Book - The Open Book will give a supplier
information about competitors' proposals in order
to persuade a supplier to offer a better deal. Of
course, the competing suppliers expect their
proposals to be kept confidential. UNETHICAL!
The Cheap Date - Despite the fact that he is
engaged in a negotiation situation with the
supplier, The Cheap Date will accept meals,
entertainment, and/or
gifts at the supplier's
expense. Even if such
acceptance does not
actually influence The
Cheap Date's decision-
making, it creates the
perception within The
C h e a p D a t e ' s
organization that he is
being "bought." UNETHICAL!
The Professional - The Professional considers
ethics when negotiating. She knows the
characteristics of the other four profiles and
consciously avoids that type of behavior. And she
does a great job of negotiating, too!
There are so many effective ethical negotiation
techniques available. You should never have to resort
to the practices of The Liar, The Exaggerator, The Open
Book, or The Cheap Date to get the results you want.
Negotiation, Ethics, & You
“Negotiation, Ethics, & You” by Charles Dominick, SPSM, SPSM2 was
originally published in Edition 72 of PurchTips.
How Do You Persuade Your Suppliers?
Are you employing an ethical negotiation strategy?
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?
Page 3
April 2011 Volume 1, Issue 1
One of the strongest negotiation techniques your supplier
can use is to simply say "no." Your ability to distinguish a
real "no" from a "no" used as a negotiation technique is
vitally important. These tips will help you move past the
first few no's and negotiate a better deal.
Shift Focus - Try to shift focus onto another item of value if
you're at an impasse on a particular negotiation point.
Negotiate a longer warranty period. Ask for some free
products or accessories. Gain agreement on firm pricing
for a longer period of
time, a downward price
protection clause, better
lead-times, or seek
greater discounts on
related (or unrelated)
goods or services.
Do The Math - Set emotions aside and walk your supplier
through the business problem you both face. Develop a
"should cost" model to determine if there is room for
additional cost compression. Benchmark the offer you've
received against published industry data from consultants,
trade organizations, etc. Offer to analyze and help reduce
supplier's upstream costs.
Paint A Picture - Sometimes suppliers need help
understanding the implications of not reaching
agreement. Explain the importance of your business to
their bottom line. Describe what their business might
look like 2 or 3 years out if they lose this deal or if the
relationship is damaged. Ask how this future state
would affect their personal performance review,
career or compensation.
Change Players - Insisting on the involvement of a
higher-level supplier representative in the negotiation
might seem elementary, but many negotiators mess
this one up. The trick is to find the highest level
executive who would experience the greatest pain at
the loss of your business. Aim too high and your pleas
may not be treated as high priorities. Done correctly,
your contact will help you fight within the supplier's
organization.
Negotiating After "No"
“Negotiating After „No‟” by Charles Dominick, SPSM, SPSM2 was
originally published in Edition 175 of PurchTips.
How Do You Respond When Your Supplier Says No?
Don’t let a supplier’s “no” spell the end a deal.
As you probably already know, negotiation is a necessary skill for success in purchasing. As a matter of fact your peers
have 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 than
ever. You may even get lured into using the convenient, but often ineffective, method of negotiating by email. If it seems
like 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 in
today’s environment. Next Level Purchasing's highly personal and interactive online course “Powerful Negotiation For
Successful Buying” will teach you the latest and greatest procurement negotiation strategies so that even the most savvy
sellers 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 April
30, 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/powernegotiation
Page 4
April 2011 Volume 1, Issue 1
Sidebar Case Study: 2010 PepsiCo Piston Cup ARI was recognized as a 2010 PepsiCo Piston Cup recipient by the Frito Lay Fleet Team. Frito Lay
cited three areas of exceptional performance that led to the ARI achievement of this award. First, the
ARI team assisted Frito Lay with the successful deployment of over 1,200 Sprinter Route Trucks to the 16 Frito Lay Regions within
the first quarter of 2009. Second, ARI helped Frito Lay meet year‐end financial objectives by providing timely invoicing and financial
reporting. Finally, PepsiCo termed ARI’s signature customer service “unparalleled” and praised ARI as a “truly valuable business
partner.”
SPONSOR ADVERTORIAL
Critical Alert! Critical Alert! Critical Alert!
Is Your Fleet Supply Chain Management on Track?Is Your Fleet Supply Chain Management on Track?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.com
Page 5
April 2011 Volume 1, Issue 1
Purchasing professionals expend a great deal of time
formulating strategies to meet corporate cost reduction and
new product development goals. And why not? Cost savings
and new product development are what brings value to our
organization and purchasings’ visibility to executive
management. Making use of a well written Supplier Quality
Manual (SQM) is the next step to executing your supply
strategy.
Now that you have proven your strategy by obtaining the
product or service that meets your cost reduction goals, it’s
time to implement a supplier quality manual to sustain your
accomplishment. The supplier quality manual, or SQM, is a
proactive document designed to eliminate post-contract
surprises and events that have the effect of reducing,
delaying, or in some cases, eliminating hard won cost
savings.
There are no “one size fits all” SQM formats, however all
SQMs share the same basic elements that make them
effective. SQMs typically begin with an introductory statement
communicating the corporate mission, informing the supplier
of the corporation’s values and ethics. The next few
statements convey to the supplier the general requirements
that describe the quality management systems, management
responsibility, resource management and product realization.
The last two sections, transaction requirements and the cost
of quality, discuss in detail what the
purchaser will require of the supplier
when executing the contract. These
sections must be very detailed and
unambiguous to eliminate surprises
which can place your cost reduction
strategies in jeopardy. It is a good
practice to reiterate your policy
regarding pricing guarantees, delivery requirements,
minimum order quantities (MOQ) and any other details
needed to execute your strategy. Additionally, the cost of
quality is an essential element to your SQM. The supplier
needs to know the consequences of poor performance.
Include in the cost of quality section your corporate debit
policy for shipping nonconforming material.
Lastly, the supplier needs to take ownership in the SQM
and how it is executed. To accomplish supplier
ownership, include a supplier sign off page that makes
the SQM a part of the purchase order.
“A View From the Field” is a feature written entirely by SPSM-Certified
purchasing professionals. If you are SPSM-Certified and would like to contribute
to this column, please send an original 300-400 word educational article on
procurement to
with a business headshot.
Tim Reis, SPSM
Implementing a Supplier Quality Manual to Execute Supply Strategies
A View From the Field
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.
Page 6
April 2011 Volume 1, Issue 1
Can A Negotiation Checklist Improve Your Results?
As we teach in our online course "Powerful Negotiation For Successful Buying," preparing for a negotiation is
critical 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 supplier's 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 supplier's 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
“A 21-Point Negotiation Checklist” by Charles Dominick, SPSM, SPSM2 was originally published in Edition 204 of PurchTips.
Page 7
April 2011 Volume 1, Issue 1
"seals the deal" with an internal customer and the
purchasing department is involved only at the end, the
supplier is certain of getting the deal and will not bow to
any pricing pressure that the purchasing department tries
to apply.
Salespeople are trained - and many are great - at
manipulating even the smartest professionals who have
their guard down because they don't negotiate every day.
These salespeople know what questions to ask that seem
harmless but actually get the information that they need
to entrench themselves in buying plans and maximize
their margins at the expense of the buying organization.
By having a skilled purchasing professional present at all
supplier meetings about major purchases, it can help the
organization counter these tactics and prevent the
supplier from getting that sense of certainty that results in
high prices. But negotiation isn't the only skill that
purchasing professionals bring to the table.
Many purchasing professionals find themselves in
situations where their internal customers (e.g.,
Engineering) cut deals with suppliers and don't involve the
purchasing department until the moment a purchase
order needs to be created. This is a bad practice.
Many companies recognize the consequences of not
having early purchasing involvement and have policies
requiring the purchasing department to be given an
opportunity to participate in all supplier conversations for
purchases expected to exceed a certain value. If you want
to convince your management to implement such a policy,
start by touting your negotiation skills as follows:
As a purchasing professional, you are an experienced
negotiator. You negotiate frequently, maybe daily.
Negotiation may not be part of your internal customers'
job description. By deliberately keeping you out of a
negotiation, your internal customer is failing to utilize a
resource that can financially benefit the organization.
Suppliers' flexibility with their pricing is dependent on their
perceived certainty of getting the deal. When a supplier
Use Negotiation Skills To Elevate Purchasing Are Your Purchasing Negotiation Skills Underutilized?
“Use Negotiation Skills To Elevate Purchasing” by Charles Dominick, SPSM,
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. That's 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
Page 8
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.
Price and Commodity Indices
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:
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.
Page 9
Procurement Vacancies To learn more about these and other vacant positions, visit: http://www.nextlevelpurchasing.com/jobs1
Job Title: Vice President, Procurement Company: Flying Food Group
Salary: 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 implementations
To apply: Send resume via email to: [email protected]
Job Title: Senior Supply Chain Manager Company: CDC– Cameroon
Salary: $120,000 Location: Limbe, Cameroon
Implement procurement strategy and policies.
Forecast procurement needs. Create and implement KPI's. 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: [email protected]
Page 10
April 2011 Volume 1, Issue 1
Job Title: Senior Contracting Agent Company: Amtrak
Salary: $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: [email protected]
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
Esan A.—Nigeria
Sheila A.—Washington, USA
Catherine C.— North Carolina, USA
Christine C.—Illinois, USA
Jason C.—Illinois, USA
Angela D.—Ohio, USA
Sandra D.—Illinois, USA
Anil G.—India
Jaikumar G.—India
Peggy G.—Virginia, USA
Preeti J.—India
Kurt K.—Colorado, USA
G.S. L.—India
Divya M.—United Arab Emirates
David N.—Arkansas, USA
Heather N.—Missouri, USA
Richard N.—Minnesota, USA
Jonathan O.—Illinois, USA
Cristi P. - Romania
Jayashree R.—United Arab Emirates
Rajeev S.—United Arab Emirates
Timothy S.—California, USA
Margaret T.—Illinois, USA
Qiong W.—Washington, USA
February
Albernachie A.— West Indies
Jyothi B.—India
Renee D.– California, USA
Terri D.—Ohio, USA
Christopher J.—Illinois, USA
Jana K.– Ohio, USA
Kimberly M.—Wyoming, USA
Bryan M.—Missouri, USA
Sheila O.—Indiana, USA
Terri P.—West Virginia, USA
Julio R.—Alaska, USA
Stephen R.— Ontario, Canada
Adewale S.—Nigeria
Kausar S.—India
Melanie S.—Ohio, USA
VBTSM S.—India
Matthew T.—Arizona, USA
Niculae V.—Romania
James W.—Michigan, USA
March Chris A.– Florida, USA
Darlene B.—Arizona, USA
Lubos B.—Slovakia
(March continued)
Angie C.- California, USA
Charlene C.– North Carolina, USA
McCabe C.—Utah, USA
Milos D.—Slovakia
Nikolay D.—Austria
Kamil F.—Slovakia
Lubomir F.—Slovakia
Kenya G.—North Carolina, USA
Michael G.– Germany
Supratik G.— India
Kenneth H.—Florida, USA
Teresa L.—Arkansas, USA
Ingrid L.– Slovakia
Jamie L.– Illinois, USA
Kimberly M.– Ohio, USA
Rajesh M.—India
Inna N.—Pennsylvania, USA
Ana O.—Belgium
Kathleen O.—Illinois, USA
Debra R.—California, USA
Henrik S.—Denmark
Carrie W.—Indiana, USA
Josh W.—New York, USA
Layne W.—Tennessee, USA
Sarah Z.—California, USA
Page 11
April 2011 Volume 1, Issue 1
When you demonstrate how important to your company that an
issue actually is, you'll often be surprised at the creativity that the supplier generates at some point in coming up with a solution
that satisfies you.
Suppliers get tired of saying "no." Your persistence can gently nudge them to figure out something positive to respond with
instead of that dreaded two-letter word...
Good luck!
~ Charles Dominick, SPSM, SPSM2
Beyond the tips…. Is your negotiation recipe missing an ingredient?
After reading this month’s edition of Leading-Edge Supply
Management, you're probably wondering what this "important ingredient" is. And I won't keep you in suspense.
The important ingredient often missing from purchasing
professionals' negotiation recipes is persistence. Just because a supplier refuses a negotiation request of yours doesn't mean that
you should give up.
Keep trying. Be the proverbial "broken record."
As communication methods have changed throughout history,
negotiation has followed. Prior to the industrial revolution, people would negotiate face-to-face when bartering, exchanging
negotiated quantities of corn for negotiated quantities of musket balls.
Then, of course, the telephone allowed negotiators in different
locations to bargain. Finally, in the past 10-15 years, email became
a popular - but sometimes ineffective - medium in which to exchange offers (our online class "Powerful Negotiation For
Successful Buying" teaches when negotiating by email is smart and when it is the most foolish thing a procurement professional can
do). Of course, eSourcing technologies allow for all sorts of online negotiation activities.
So what's next? Stroll through any mall and you're likely to bump
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
texting (also called "txting" or "sending text messages"). These are future representatives of our suppliers.
Is texting the future method of negotiating? Some of you are
probably saying "I hope not." But the reality is that texting is likely to creep into the mainstream negotiation process to some degree
soon.
If you are feeling yourself getting mad, it might be time to read "Who Moved My Cheese?" again.
Now, don't get me wrong. I am not advocating that you go out and
conduct all of your negotiations by text message from this point forward. After all, texting has many disadvantages from a
negotiation standpoint, such as:
You give the other party time to think through their response
You cannot communicate tone-of-voice through texting
Texting (at least when I do it) is often rife with errors
The amount of space you have in a text isn't enough for
discussing any substantial issues
You cannot watch for body language clues from the other
party
There is a higher probability of misunderstanding
And so on...
But when you need a simple response quickly (or want to create
that illusion in order to gain pressured concessions from your suppliers), texting might fit the bill in some limited situations.
Now, texting among teens has its own vocabulary and acronyms, like "ur" (for "your," "you're," or "you are"), "l8r" (for "later"), and, of
course, the old standby from the email days "lol" (for "laughing out loud"). So, do we need a similar vocabulary for procurement
negotiations? I don't know, but just to be safe I'll start one here (&
u can feel free 2 add ur own):
2HI - "Too High," an expression that the supplier's price is too
high, sent in reply to a supplier's text inquiring about the
competitiveness of their offer
BAFO - "Best and Final Offer," as in "send ur BAFO"
DL - "Deal," an expression that you've accepted the supplier's
offer
LTAS - "Leaning Towards Another Supplier," sent in reply to a
supplier's text asking about the status of your decision on proposals, meant to compel the supplier to submit a revised,
more attractive proposal
SYP - "Sharpen Your Pencil," synonymous with "submit an offer
more appealing to me"
Naturally, ethics that apply to traditional negotiation will need to
apply to negotiation-by-txt as well. With the aforementioned high probability of misunderstanding, you want to be careful to not
insult the supplier or behave inappropriately. For example, I would never use "LOL" with a supplier as doing so may insult the supplier
and make the supplier terminate the negotiation. Also, be very careful when using the "F" character, as doing so may indicate the
use of a profanity, as in "Send ur bid ASAFP." My thumbs always inadvertently add unintended letters to messages, so proofread to
ensure that you didn't add that vulgar "F."
While some parts of this post are slightly written in jest, I do feel that texting will rear its head into more and more procurement
negotiations in the near future. Therefore, it is imperative to be prepared.
Never fight change when the writing is on the wall.
From Charles’ Purchasing Certification Blog
The Future of Negotiation: Texting?
Page 12
April 2011 Volume 1, Issue 1