Jul 11, 20 planning a negotiation is crucial to its success. Best negotiation skills for procurement and sourcing. Purchasing and supply chain management robert monczka. The business units welcome participation on crossfunctional supply chain and strategic sourcing teams, support the sourcing process, and actively partner with the supply chainstrategic sourcing organization. Strategic sourcing institute for supply management. Top 10 dos and donts of supplier price negotiations. A method whereby a purchased part is supplied by only one supplier. A negotiation optimization strategy of collaborative procurement. Supply chain and strategic sourcing strategies are integral to the companys overall strategy for future growth. Thus, most shopping centres will place tenants in one of three distinct categories.
Do not worry if a supplier says he is being negotiated down to a loss on a sale. Strategic sourcing for successful supply chain management 1. Outsourced supply chain management outsourcing, or the contracting out of a noncore business function to a third party, is a common american business practice. You need to implement best practices, technical expertise, and collaboratively engage stakeholders and suppliers to improve business results. Professor of supply chain management, north carolina state university poole college of management dr.
This book is not only a text but a reference as well, and is established as one of the leadingedge strategy and purchasing books. The first stage in implementing strategic sourcing is the positioning of the purchasing and supply management function within the organization. This idea is inconsistent with the meaning of negotiation. Negotiation is a crucial way to resolve the conflict and an effective mechanism for supply chain coordination and cooperation. Seven techniques for preparing winning negotiations with. The use of diversion such as the introduction of a wisecrack or an irrelevancy can take the heat out of negotiations and make thinking time. A negotiation is a dialogue between two or more parties to resolve a disputes or come to an agreement and negotiation management is the practice of managing your negotiation strategies, practices, and methodologies while keeping track of how well you doing with respect to identified bestinclass practices and results. Sourcing innovation supply chain glossary negotiation.
But having done that, purchasing, by definition becomes the transactional piece and procurement becomes the strategic piece. Negotiation, buyersupplier relationships, procurement, relationship. Youll gain contextual insights and knowledge into the strategies, processes, and practices of. Apply to sourcing specialist, supply chain specialist and more. Sourcing is carried out in business in many different areas and for different reasons. Here are seven techniques that top supply management negotiators put into actiontechniques that prove effective even when the deck is stacked against them. Seven techniques for preparing winning negotiations with your. This turnkey solution provides current and complete coverage that makes it not only a useful book, but also a valuable professional reference tool. Sourcing activities have once more acquired a central role as a guiding element in businesstobusiness relations. A commonly agreed upon definition of negotiation is a process of compromise by which the needs of different parties are managed 1. Procurement some of the tasks involved in procurement include developing standards of quality, financing purchases, negotiating price, buying goods, inventory control and disposal of waste products like packaging. Ppt supply chain management powerpoint presentation free. Pdf the effect of negotiation practices on the relationship. Since moving into china the amount of defects has been increasing.
Too often, supply chain and procurement leaders are not wellprepared for complex negotiations with key suppliers. Negotiation is one of the core skills of business, essential for success in dealings with customers, suppliers and coworkers. Strategic sourcing can be defined as a collective and organized approach to supply chain management that defines the way information is gathered and used so that an organization can leverage its consolidated purchasing power to find the best possible values in the marketplace. A large measure of supply chain managements scm have to communicate and negotiate effectively with sc members. Purchasing and supply chain management kindle edition by robert m. Supply chain management, procurement, sourcing, acquire, and. Cips believes that negotiation is a key skill of the purchasing and supply management professional. With todays sourcing, focus has shifted to efficiency, lean or just in time inventories, outsourcing, supply base reduction, centralized distribution, more products with faster launches, low cost country sourcing and supply chain globalization in highly volatile markets. Supply chain management programs the negotiation institute. Sourcing entire set of business processes required to purchase goods and servicesoutsourcing supply chain function being performed by a third party outsourcing questions 1.
Strategic sourcing for successful supply chain mangement learn with flashcards, games, and more for free. The concept is created to help supply chain managers and practitioners to improve, develop and implement strategic sourcing strategies. Businesses that can find the most appropriate suppliers at. Sourcing strategy scm supply chain resource cooperative. The source identification and strategizing follows the set procedural path making strategic sourcing an excellent tool generating bottom line growth and rationalizing the supply chain costs.
Eight tips for negotiation planning supply management. Ppt supply chain management powerpoint presentation. Purchasing and supply chain management, 4th edition. In the supply chain environment, negotiating often involves the cost of an item, arrival time, and quality standards. If you continue browsing the site, you agree to the use of cookies on this website. A negotiation exercise article in decision sciences journal of innovative education 111 january 20 with 2,432 reads how we measure reads. Oct 07, 2019 strategic sourcing is a specialty area whose potential and profitability is just beginning to be realized.
On more than one occasion, even in cases of major longterm highvalue highrisk construction projects, clients have been reluctant to accept the need for and the. Factors influencing negotiation in the sourcing process between partners in eprocurement. Gain a thorough understanding of the critical role of purchasing in the supply chain with one of todays leadingedge strategy and purchasing books sourcing and supply chain management, 5e, international edition. Chapter 4 strategic sourcing for succesful supply chain management principles of supply chain management. Qualifications consultants average more than 20 years experience webbased strategic sourcing tools concept to reality approach handson implementation worked with more than 200 firms across multiple industries developed more than 250 supply chain and logistics strategies. International purchasing and supply chain management. This means that it does not entirely look at cost but on ensuring that the. The use of diversion such as the introduction of a wisecrack or an irrelevancy can take the heat out of negotiations. Pdf this article examines the effects of negotiation practices, such as. Sourcing is a critical activity used at both tactical and strategic levels. Risk aversion and supply chain contract negotiation by.
This programme has been designed to study the key issues in negotiation relating to procurement and sourcing, including negotiating with both suppliers and colleagues. Anchor tenants are essential because they are able to attract. How to effectively negotiate deals in the procurement environment. After gaining traction in the 80s and 90s for functions like manufacturing and logistics, its popularity continued to soar. It is concerned with what needs to be purchased, why, when and where. The approach focuses on improvement of the overall value proposition. Sourcing is the entire set of business processes required to purchase goods and services. Some of the sourcing strategies that are used in supply chain management today include. So what does it take to get ready for even the toughest adversaries. Exploring supplier negotiation best practices and supplier.
This course introduces you to the exciting area of supply chain sourcing. Purchasing and supply chain management kenneth lysons ma, med, phd, dipl. Creating a sourcing and procurement process plan supply. This programme has been designed to study the key issues in negotiation relating to procurement and sourcing, including negotiating with. Strategic sourcing for successful supply chain management. If you are in supply chain field, you should know that its a major decision whether you outsource your productionfunction or perform inhouse. Purchasing and supply chain management monczka pdf free. Robert handfield is a globally renowned thought leader in supply chain management and the negotiation institute distinguished expert in negotiation for procurement, strategic sourcing, supply market intelligence, and supplier development.
The off the cuff approach, which involves picking up the bid file just before commencing a negotiation is not recommended. Using the above analogy, the supply chain can be considered the entire chair, while procurement and sourcing are parts of the chair. Apr, 2018 what is the difference in supply chain vs. May 24, 2010 strategic sourcing for successful supply chain management 1. Will the third party increase the supply chain surplus relative to performing the activity in. Negotiation preparation is the most important stage stage of negotiation to be effective. From rao 2006 and srivastava 2007 green supply chain management gscm is considered as an environmental innovation. Approach the negotiation as if it is a zero sum game of they win you lose. The ability to negotiate effectively is so fundamental, that.
For example, riskneutral firms have an incentive to avoid other riskneutral firms as their supply chain partners. In the context of the supply chain, a negotiation usually refers to a formal discussion between a buyer and one or more suppliers with the goal of securing the supply of raw materials, goods, and or services and negotiation management refers to the process of managing the negotiation with the intent of getting. Strategic sourcing can be defined as a collective and organized approach to supply chain management that defines the way information is gathered and used so that an organization can leverage its consolidated purchasing power to find the best possible values in the marketplace we cannot build up the significance of operating in a collaborative manner. Sourcing is an important part of managing a successful supply chain. Supply chain management, procurement, sourcing, acquire. Representation of sourcing alternatives and negotiation. International sourcing and supply chain stability david l. However, it is conceptually easier to imagine a chain as a river, originating from a source, moving downstream and terminating at a sink. For supply chain managers looking to maximize the effectiveness of todays complicated supply chains, strategic sourcing is a body of knowledge. Companies need e sourcing now more than ever before and the rate of change required of the procurement function to keep pace with business demand continues to accelerate. One of the most common uses of sourcing is in supply chain management. Conference paper pdf available january 2010 with 4,742 reads how we measure reads.
Strategic sourcing is a fact based and systematic approach that organizations use to optimize the management of their supply chain. For supply chain managers looking to maximize the effectiveness of todays complicated supply chains, strategic sourcing is a body of knowledge that can help increase efficiency and reduce costs. Pdf factors influencing negotiation in the sourcing. Sourcing although some people use supply chain, procurement and sourcing interchangeably, they actually refer to different aspects of the same part of business much the way that the legs and seat are all part of a chair but are not the same. The effect of negotiation practices on the relationship between. Part of a broader specialization on supply chain management, you will master the supplier selection process and supplier segmentation. Powerpoint presentation slide 1 negotiation institute. Furthermore, the expansion of sourcing requires an ever increasing body of knowledge in order to effectively carry out the sourcing function itself. Rather than argue over the general costs and benefits of international sourcing, it is probably more useful to identify the relational factors that influence the cost of separating activities on the value chain. The majority of that is related to production and or the quality of raw materials being used. Insourced vs outsourced supply chain management staff. When we sit down with our negotiation counterpart, we often dont have a lot of information about the aims of the other.
Why you should attend the purpose of this course is to provide students with an indepth understanding of the theoretical as well as practical aspects of sourcing management, particularly, how it. Achieving sustainable savings goes beyond bestinclass technologies. Supply chain management, procurement, sourcing, acquire, and logistics slideshare uses cookies to improve functionality and performance, and to provide you with relevant advertising. Apply to supply chain specialist, vice president of marketing, category manager and more.
Oct 16, 2014 supply chain management, procurement, sourcing, acquire, and logistics slideshare uses cookies to improve functionality and performance, and to provide you with relevant advertising. What are the key elements of a sourcing and procurement process plan. Top 10 dos and donts of supplier price negotiations published on. Outsourcing results in the supply chain functions being performed by a third party. Developing a negotiation strategy and tips for improved negotiation negotiating plays a large role in the procurement professionals career, as negotiating agreeable contract terms with suppliers is one of the foundations of good supply chain management. As our profession has evolved from the purchasing agent to supply chain mentality. The supply chain extends upstream to the sourcing of raw materials and. Models for customersupplier negotiation in a collaborative supply. Oct 28, 2003 this idea is inconsistent with the meaning of negotiation. Three steps to negotiation success supply management. Jul 23, 2008 purchasing and supply chain management, 4rd edition is a turnkey solution for providing current and thorough coverage for this critical area of the supply chain. Director global sourcing supply chain jobs, employment. Effective negotiation skills requires that we keep our ear to the ground to snoop like a nosy detective. Strategic sourcing is a specialty area whose potential and profitability is just beginning to be realized.
Furthermore, the expansion of sourcing requires an ever increasing body of knowledge in order to effectively. Gain an understanding of proven strategies in supply chain management learn to enable strategic supply chain management, and understand how to sustain the new supply chain bring competitive advantage to your firm through the supply chain understand how strategic supply management supports the achievement of corporate improvement beyond achieving lowest purchase price. Sourcing, also known as procurement, is the practice of locating and selecting businesses or individuals based on set criteria. Critical negotiation skills for the procurement professional. This suggests that each firm should strive to find a supply chain partner based on its own and its prospective partners sensitivities to risk. Purchasing and supply chain management, 4rd edition is a turnkey solution for providing current and thorough coverage for this critical area of the supply chain.