Course Overview for Managing Supplier, Cost Saving & Negotiation Techniques Procurement Function
This Supplier Management 2-day practical training programme equips procurement professionals with effective techniques for supplier management, cost reduction, strategic sourcing, and negotiation. Participants will learn practical approaches to achieving sustainable savings while maintaining quality, delivery, and supplier performance, with tools and techniques they can apply immediately in their procurement activities.
Course Objectives
- Effectively manage, evaluate, and develop supplier relationships.
- Identify and implement cost-saving and cost-avoidance opportunities.
- Apply Total Cost of Ownership (TCO) and cost analysis techniques.
- Develop effective procurement and negotiation strategies.
- Apply practical negotiation techniques and handle difficult suppliers.
- Negotiate improved price, payment, delivery, quality, warranty, and service terms.
- Monitor supplier performance using relevant KPIs.
- Develop practical action plans to achieve sustainable procurement savings.
Training Methodology
- Trainer-led presentations and discussions
- Group activities and problem-solving
- Knowledge checks, Q&A and experience sharing
- Practical action planning for workplace application
Who Should Attend
- Procurement Managers
- Procurement Executives
- Purchasing Managers
- Purchasing Executives
- Strategic Sourcing Professionals
- Supply Chain Managers
- Supply Chain Executives
- Vendor/Supplier Management Professionals
- Materials Managers
- Operations Managers involved in procurement
- Finance professionals involved in purchasing and cost management
- Professionals who regularly negotiate with suppliers
Duration: 2 days (9:00 am – 5:00 pm)
Course Content
Day 1: Supplier Management & Cost-Saving Strategies
Module 1: Procurement & Supplier Management Fundamentals
- Role and importance of procurement
- Procurement’s contribution to business performance
- Strategic vs. operational procurement
- Understanding supplier relationship management
- Supplier lifecycle management
- Supplier segmentation and categorisation
- Strategic, preferred, approved and transactional suppliers
Module 2: Supplier Selection & Evaluation
- Identifying suitable suppliers
- Supplier pre-qualification
- Supplier evaluation criteria
- Quality, cost, delivery and service considerations
- Supplier capability assessment
- Financial and operational risk assessment
- Supplier scorecards
- Supplier performance monitoring
Module 3: Cost Analysis & Cost-Saving Techniques
- Understanding supplier cost structures
- Direct and indirect costs
- Fixed and variable costs
- Cost drivers
- Price analysis vs. cost analysis
- Should-cost analysis
- Benchmarking
- Market intelligence
- Volume consolidation
- Supplier competition
- Specification optimisation
- Value engineering
- Standardisation
- Make-or-buy considerations
- Cost avoidance vs. cost reduction
Module 4: Total Cost of Ownership (TCO)
- What is Total Cost of Ownership?
- Purchase price vs. total cost
- Transportation and logistics costs
- Inventory and holding costs
- Quality and rejection costs
- Maintenance and lifecycle costs
- Supplier switching costs
- Using TCO to compare suppliers
Module 5: Supplier Performance Management
- Developing supplier KPIs
- Quality performance
- On-time delivery
- Cost performance
- Responsiveness
- Service performance
- Corrective action plans
- Supplier performance reviews
- Continuous improvement with suppliers
Day 2: Procurement Negotiation Techniques & Supplier Performance Management
Module 6: Procurement Negotiation Fundamentals
- What is procurement negotiation?
- Negotiation objectives
- Preparing for a negotiation
- Understanding your negotiating position
- Understanding the supplier’s position
- Identifying interests and priorities
- BATNA and alternatives
- Setting negotiation targets
- Establishing negotiation limits
Module 7: Negotiation Strategy & Planning
- Developing a negotiation strategy
- Information gathering
- Understanding supplier motivations
- Identifying leverage points
- Creating a negotiation agenda
- Defining trade-offs
- Developing concessions
- Using data and facts during negotiations
Module 8: Negotiation Techniques & Tactics
- Anchoring
- Questioning techniques
- Active listening
- Strategic silence
- Making and responding to offers
- Conditional concessions
- Bundling and unbundling
- Good guy/bad guy
- Time pressure
- Competitive bidding
- Volume leverage
- Multi-variable negotiation
- Handling aggressive negotiation tactics
Module 9: Negotiating Commercial Terms
Participants will practise negotiating:
- Price
- Payment terms
- Minimum order quantities
- Lead time
- Delivery terms
- Freight and logistics costs
- Discounts and rebates
- Warranty
- Service levels
- Quality requirements
- Penalties and compensation
- Contract duration
- Price adjustment mechanisms
Module 10: Managing Difficult Suppliers
- Dealing with price increases
- Supplier resistance
- Poor delivery performance
- Quality problems
- Supplier dependency
- Single-source risks
- Handling supplier conflicts
- Escalation management
- Developing supplier improvement plans
Module 11: Practical Negotiation Simulation
Participants will conduct a buyer-versus-supplier negotiation exercise covering:
- Preparation
- Supplier analysis
- Cost analysis
- Negotiation strategy
- Price negotiation
- Commercial terms
- Concessions
- Closing the negotiation
- Evaluation of negotiation results
Module 12: Action Planning
- Identifying immediate cost-saving opportunities
- Supplier improvement opportunities
- Developing negotiation plans
- Setting savings targets
- Creating a 30/60/90-day procurement action plan
- Measuring and reporting procurement savings
