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 strategic strategy to manage supplies and the negotiation of the most advantageous benefits to the company is extremely important.

OBJECTIVES DEVELOPING COMPETENCIES IN COST REDUCTION AND NEGOTIATION FOR PURCHASING

• IDENTIFY the type of negotiation strategy to be in place to manage procurement negotiation
• DEVELOP skills in handling difficult negotiation
• UNDERSTAND successful negotiator techniques
• UNDERSTAND the positive trait to develop in order to be a successful negotiator
• IDENTIFY own and opponent strength and weakness and develop alternatives before going into negotiation
• UNDERSTAND the correct techniques of cost reduction using the ERRANT methodology

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 – 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 Competitiveness Model
• Conducting SWOT analysis on your supplier for negotiation
• Will you use Integrative or Distributive negotiation strategies?

Module 3 – 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 4 – Harvard Key Principle of Negotiation

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

Module 5 – The Bluff game of negotiation

• The purpose of the game
• The rule of the game
• Play the game to understand negotiation

Module 6 – Harvard 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 7 – Understanding your Alternatives

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

Module 8 – 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 9 – 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
• Quiz x 30 questions

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