Negotiation with suppliers is not only about who has the power. Even when you hold the cards, you need to invest time in relationships with key suppliers and be an intelligent negotiator.

• Understand your suppliers’economics and try to find win-wins: Don’t just focus on the price being charged, understand how the total supply chain fits together. Spend time with key suppliers to build this understanding in regular review meetings that aren’t just about price negotiation.
• Don’t negotiate so hard that there’s no profit in it for the supplier: It is unsustainable and can be more costly in the long run. Understanding the economics will help you know what a supplier’s real bottom line is.

• Consolidate your buying power: Encourage suppliers to set up global key account management

• Figure out the best tradeoff between price and payment terms

• Consider both bundling and unbundling: Consider if you could get more value either by more bundling of activities or by unbundling.

• Don’t get locked in: If you can walk away from a supplier, sooner or later you’ll end up paying over the odds. To avoid getting locked in:
  • Always have at least one other supplier as a credible alternative
  • Work on reducing the cost of switching - time, money, risk, technical difficulty
  • Avoid long-term contracts unless there are overwhelming economic advantages.
  • Maintain an active market place

• Manage Total Cost of Ownership: With a TCO approach you don’t just focus on obvious upfront costs. You look at ongoing costs in the future years, like maintenance and repairs.

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Categories : Advices | Tags : Contracts, General expenses | 0 commentaire associé