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LeadingEdgeSupplyManagementED1-April2011

LeadingEdgeSupplyManagementED1-April2011

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Published by Pradeep Sylvester
supply chain management
supply chain management

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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 veryimportant 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 anelectronic 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 negotiationswhere you and your supplier have opposite positions on an issue, you may think that there is no opportunity forcollaboration. 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 aninterest. For example, a supplier may have an interest in making a 20% profit margin on its sales to your organizationand its position will be that it wants to charge $5.00 per unit. Your interest may be that you achieve a 10% costsavings and your position is that the supplier should reduce the price to $4.50. If you've reached an impasse, it can bemore 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 workwith you to come up with multiple scenarios that would enable both parties to achieve their interests. The goal is notto come up with the perfect solution just yet, but to gather several different ideas that can be later pared down. Don'tfeel the pressure to do all the talking. Sometimes, a supplier can come up with a good idea and they will be more likelyto buy into it - or at least reluctantly honor it - if they come up with it as opposed to you imposing it on them. Forexample, 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 justdon'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 Pur 
chTips.
Page 2
Leading-
Edge Supply Management™ is published monthly by Next Level Purchasing Association as a free benefit to association memb
ers. If you've received acopy of this magazine from someone rather than downloading it directly from the Next Level Purchasing Association, you can sign up for a free associationmembership to have access to this and other free benefits. Just visit http://www.NextLevelPurchasing.com/nlpamag and submit your name and emailaddress to join the Next Level Purchasing Association. Reproduction of this magazine in whole or in part without written permission by Next Level Purchasing isstrictly prohibited. All rights reserved. ©2011 Next Level Purchasing, Inc.
April 2011
Volume 1, Issue 1
 
If you are like most purchasers, you are under pressureto generate lots of cost savings. Unfortunately, thepressure to boost the bottom line compels some lessskilled purchasers to cross the ethical line. They usequestionable 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 asupplier to persuade that supplier to improve itsterms. An example of a lie would be telling asupplier that another supplier has a price that is10% lower when such a statement isn't true.UNETHICAL!
The Exaggerator
- The Exaggerator might not tell anoutright lie, but her words and behavior may bedesigned to trick a supplier into thinking that alarger quantity or longer term contract is to beexpected. The Exaggerator's intent is to get a betterprice and not follow through with implied quantityor term commitments. UNETHICAL!
The Open Book
- The Open Book will give a supplierinformation about competitors' proposals in orderto persuade a supplier to offer a better deal. Of course, the competing suppliers expect theirproposals to be kept confidential. UNETHICAL!
The Cheap Date
- Despite the fact that he isengaged in a negotiation situation with thesupplier, The Cheap Date will accept meals,entertainment, and/orgifts at the supplier'sexpense. Even if suchacceptance does notactually influence TheCheap Date's decision-making, it creates theperception within TheCheap Date'sorganization that he isbeing "bought." UNETHICAL!
The Professional
- The Professional considersethics when negotiating. She knows thecharacteristics of the other four profiles andconsciously avoids that type of behavior. And shedoes a great job of negotiating, too!There are so many effective ethical negotiationtechniques available. You should never have to resortto the practices of The Liar, The Exaggerator, The OpenBook, 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 S
PONSOR
A
DVERTORIAL
:
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

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