DEVELOPING COMPETENCIES IN COST REDUCTION AND NEGOTIATION FOR PURCHASING

INTRODUCTION FOR DEVELOPING COMPETENCIES IN COST REDUCTION AND NEGOTIATION FOR PURCHASING

In order to improve company profitability and ability to drive up market share, the demand for an effective and efficient procurement management is a pre requisite. Key competencies in area of cost control, applying effective strategy to manage supplies and the negotiation which making  the most of benefits to the company is extremely important.

This program promotes the key competencies to manage procurement and purchasing effectively by delivering the techniques of managing cost saving activities and handling effective negotiation.

COURSE OBJECTIVE

By the end of the 2 whole days the participants will able to  :-

• IDENTIFY the types of negotiation strategy to be in place to managing procurement negotiation
• DEVELOP skills in handling difficult negotiations
• UNDERSTAND successful negotiator techniques
• UNDERSTAND the positive traits to be developed  in order to be a successful negotiator
• IDENTIFY own and opponent’s strengths and weaknesses and develop alternatives before going into negotiation
• UNDERSTAND the correct techniques of cost reduction by using the ERRANT methodology
• DEVELOP competencies in handling cost savings and negotiations

COURSE CONTENT

Module 1 – Cost Reduction and Cost Avoidance (4 hours session including 1 hour for case study)

• Cost Reduction versus Cost Avoidance
• Area of Cost Reduction and Cost Avoidance
• Key Factors to consider in Cost Reduction
• Opportunity cost in cost reduction activities
• ERRANT cost reduction and avoidance strategy
• Team setting for cost reduction
• EXCEL spreadsheet reporting on cost avoidance and reduction
• Break out room discussion

Module 2 – Managing Powerful Suppliers

• Problems with powerful suppliers
• Strategies to control powerful suppliers
• Bringing new value to the supplier
• Changing buying strategy
• Create new source
• Play hardball

Module 3 – Understanding Suppliers Traits and Behaviors for Negotiation

• Key suppliers traits that all buyers looking for
• The Leader
• The Innovative
• The Monopoly
• The Follower
• The Complacent
• Understanding the Negotiation Competitiveness Model
• Integrative or Distributive negotiation
• Case study

Module 4 –Key Principle of Negotiation

• What is Negotiation
• Stages of Negotiation
• 5 principles of ethical negotiation
• 7 elements of negotiation

Module 5 –Principled Negotiation

• 4 key principle of principled negotiation
• Generate Option for positive result
• How to use Objective Criteria to Present Argument
• Handling Challenges
• Getting a Yes in negotiation

Module 6 – Understanding your Alternatives

• Definition of WATNA and BATNA
• Steps  to develop your alternatives
• Looking for ZOPA

Module 7 – Dealing with Offer and Rejection

• Deciding red lines in negotiation
• Understand when to walk away
• Managing Reject and counter offer
• Dealing with difficult negotiators

Module 8 – Negotiator Profile and Traits

• Negotiation Team
• The Soft Negotiator
• The Principled Negotiator
• The Hard Negotiator
• Traits of a good negotiator
• Bad Negotiator habits
• Mistakes made in Negotiation
• Body language in negotiation
• Bad Negotiator habits
• Mistakes made in Negotiation
• Body language in negotiation
• Dealing with difficult negotiators
• Break out room discussion and role ply

Module 9 – Influencing Strategy

• Why Influencing is Important
• How do you build Influence
• Positive Influencing others
• Key Sources of Influence
• Power strategy versus Influencing strategy
• 3 Rs of Influencing Strategies
• SWOT  analysis
• Case study and Role Play