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CHAPTER 7
or gains may restore a lagging discussion.
• Change the time scale of performance, e.g., allow a longer period within
which to complete a performance.
• Change the bargaining emphasis from a competitive mode to a co-operative
problem-solving mode. Involve branch managers with branch managers,
marketing managers with marketing managers, BDOs with BDOs.
• Change the type of contract. Change the base for a percentage. A smaller
percentage of a larger base or a larger percentage of a smaller but more
predictable base may push things back on track. Call a mediator. Arrange a
summit meeting or ‘hot-line’ call.
• Make changes in specifications or terms.
• Set up a joint study committee.
• Tell a humorous story.
7.12 CONCLUDING REMARKS
Negotiation in the procurement process is often either neglected or used as a ‘big
stick’ to beat suppliers down on price. Both these routes miss the potential benefits
to be accrued from having a network of supply partners who are interested in
doing business with you, committed to providing and maintaining service, and
constantly searching for new ideas, developments or initiatives of mutual benefit.
The next time you negotiate with a supplier, keep in mind that statistically your
sales counterpart has received at least four times the amount of training in
negotiation that you have received. The real possibility exists that you are at a
disadvantage the minute you walk into the negotiating room.
There is no substitute in negotiation for actual experience. However, any
negotiation’s chance of success will be improved by diligent and sensible
preparation of the following:
LIMs:
know where you want to be, where you are going to say no, and
consequently where an agreement is likely to land. Similarly, make some
educated guesses as to your counterpart’s likely LIMs.
Strategy:
know what outcome you are aiming for based on the relative
importance of the relationship with the supplier (both now and in the future) and
the achievement of your goals. Our advice is that the win-win strategy at least
points you in the direction of satisfying both aims.
Tactics:
what has to be done during the negotiation itself to ensure the maximum
achievement of your strategic goals? Our advice is to avoid behaviour that will
antagonise or cause disharmony, and use tactics that will drive you towards
mutual benefit.
This chapter, while not a failsafe rulebook on how to negotiate, should at least
help you reconsider and redefine the way you approach suppliers to get the best
out of them. Remember: to give you their best, your suppliers must be satisfied
that they are receiving your best.