Negotiation and Cost Reduction in Purchasing and Procurement

Purchasing Techniques, Negotiation and Cost Reduction training course will provide the skills for negotiating in purchasing and provide the skills to reduce costs, as business organizations throughout the world focus very carefully at their purchasing strategies to increase earnings and reduce costs.

The course will provide all the knowledgeable implementation of the methods, processes that can be utilized to become a leader in efficient supply management and increase savings through negotiation and cost reduction.

Success in purchasing is dependent not only on an awareness of the potential opportunities, but more importantly,  is the knowledgeable implementation of the methods, processes, and techniques that should be utilised in order to become a leader in obtaining real supply management savings through negotiations and understanding cost reduction

At the end of the Purchasing Techniques, Negotiation and Cost Reduction training course , you will be able to: 

• 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
• Understanding the efficient methods for cost reductions
• Methods of creating Purchase price index
• Techniques for assessing supplier prices
• Evaluation cost reduction techniques
• Techniques of negotiation and common approaches
• Understanding and implementing the purchasing strategic plans

Purchasing Techniques, Negotiation and Cost Reduction Training course , is ideal for:

• 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 1
Modern Methods in Cost and Productivity

• Understanding and implementing a cost reduction model
• Understanding the concept of “Pareto Optimality” and its application on cost reduction
• Analysing the spending and how to manage/control
• Understanding the concept of “Total cost of ownership model”
• Methods of cost reduction

Day 2
Opportunities for Cost Reduction

• Company purchasing price index and comparison to external index
• Pricing of suppliers and understanding of the supplier marketplace
• Best practises in cost reduction
• Understanding the concept of “Resisting price increase” and supplier performance measurement and further methods of cost saving

Day 3
Methods for Evaluation of Price

• Methodology of price analysis
• Evaluation of price and price reduction
• Different elements of cost analysis
• How much “Should Cost”? actual price vs selling price vs buying price

Day 4
Skills for Successful Negotiation

• Methods / techniques for preparation before negotiation
• How to determine the issues and “Rating” and “Valuing” issues
• Methods/ techniques of persuasion
• Methodology of “Win-Win” situation

Day 5
SWOT Analysis

• Determination of the strengths and weaknesses
• Concept of “BATNA”- best alternative to a negotiated agreement
• Preparation of the negotiation team
• Tips and training for actual negotiation
• Workshop training where trainees will create a negotiation model and discussion of results to provide hands on opportunity
• Review of the course and “Question and Answer session”