Purchasing Techniques, Negotiating & Cost Reduction
Course Code: PM22
Course Objective
- Examine the key features in spend profiles
- Evaluating costing reduction opportunities
- Understanding supplier pricing structures
- Apply purchasing strategic plans
- Develop common approaches in planning for negotiations
Target Audience
- Contracts, Purchasing, and Procurement Personnel
- Engineering, Operational, Project, and Maintenance Personnel
- Those who are involved in the planning, evaluation, preparation and management of purchasing, tenders, contracts that cover the acquisition of materials, equipment, and services
Course Outline
Day One: Continuous Improvement in Cost and Productivity
- How do other functions view purchasing
- A Purchasing Savings Model
- Total Cost of Ownership Models
- Cost Reduction Initiatives
- Establishing a Strategic Focus with Pareto Analysis on Cost
- Modern Methods of Analyzing the Spend
Day Two: Defining Cost Reduction Opportunities
- Developing Company Purchase Price Index and Comparing to External Indexes
- Understanding of Supply Marketplace and how Suppliers Price
- Benchmarking best practices in Cost Reduction
- Resisting Price Increases
- Supplier Performance Measurement
- Cost Saving Methods
Day Three: Methods of Price Evaluation
- Price Justification
- Methods of Price Analysis
- The Competition that leads to price reduction and evaluation
- Methods of Cost Analysis
- Breaking down the Elements of Cost
- Developing "Should Cost"
Day Four: Successful Negotiations
- Negotiation Skill Sets
- Steps in Negotiation Preparation
- Methods of Persuasion
- What Does Win/Win Really Mean?
- Determining the Issues
- Rating & Valuing Issues
Day Five: Determining Strengths and Weaknesses
- Know Your Better Alternatives to Negotiated Agreements (BATNA)
- Analyzing The Other Side
- Negotiation Objectives Diagram
- Prepare the Negotiation Team
- Tips for the Actual Negotiation
- Participants will negotiate model cases & discuss the results to provide an opportunity for hands on experience
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