Course details

Overview ?

The Course

In the world today it is not unusual for more than 50% of an organization’s revenue to be spent on goods and services — everything from raw materials to overnight mail. So, when the goal is to increase earnings by lowering costs, World-class organizations look closely at their purchasing strategies. Success in purchasing is dependent not only on an awareness of the potential opportunities, but more importantly, and the focus of this seminar, is the knowledgeable implementation of the methods, processes, and techniques that should be utilized in order to become a leader in obtaining real supply management savings.

The Goals

Upon completion of this seminar, participants will know:

How to be on the road to world class in cost reductions
Processes for data mining and developing strategic plans
Methods of cost improvement
Process for developing purchase price index
Procedure for reporting cost improvements
Cost Reduction vs. Cost Avoidance
How to evaluate supplier prices
Reducing low value activities
Best practices in qualifying suppliers
The importance of planning in successful negotiations
Approaches in negotiations
Standards of ethics
The importance of rating and valuing the issues in a negotiation
Negotiating important issues in various contract clauses
Important elements of final preparation

The Delegates

Contracts, Purchasing, and Procurement personnel
Engineering, Operational, Project, and Maintenance personnel
And all others who are involved in the planning, evaluation, preparation and management of purchasing, tenders, and contracts that cover the acquisition of materials, equipment, and services, and who are in organizations whose leadership want high levels of competency in those involved in these activities.

The Process

This seminar will combine a variety of instructional methods including lecture by an experienced practitioner and consultant, exercises and role playing, and group discussions covering current practices and their relationship to the implementation of new concepts.

The Benefits

Attendees will gain by participation in this program as a result of:

Increased skill sets in finding savings opportunities.
Greater ability to lead continuous improvement programs.
A greater sense of confidence and professionalism.
Greater ability to obtain desired outcomes in negotiations.
Increased recognition by the organization due to improved performance.

The Results

The organization will benefit by:

Higher productivity of personnel involved in procurement activities.
Reduced total cost of ownership for purchased materials, equipment, and services.
Improved productivity of the entire organization by better on time delivery of high quality goods and services.
Having the advantage in negotiations as a result of their employees being better prepared and trained than the employees of the other side.
Improved supplier performance and relations.
Greater strategic focus of those involved in supply management.

The Core Competencies

Attendees will gain in the following competencies as a result of the program:

Developing spend profiles
How to prioritize their time for maximum benefit
Finding costing reduction opportunities
Evaluating prices
Understanding supplier pricing structures
Developing purchasing strategic plans
Planning for negotiations
Defining issues
Understanding Total Cost of Ownership
Conducting negotiations

The Programme Content

Day One : Continuous Improvement in Cost and Productivity

The Need For Change
How Do Other Functions View Purchasing
A Purchasing Savings Model
Total Cost Of Ownership Models
Continuous Improvement Skill Sets
Cost Reduction Initiatives
Cost Savings Reporting Procedure
Data Mining
Establishing A Strategic Focus With The ABC Analysis
Modern Methods Of Analyzing The Spend

Day Two : Defining Cost Reduction Opportunities

User Group Brainstorming Sessions
Developing Company Purchase Price Index And Comparing To External Indexes
Understanding Of Supply Marketplace And How Suppliers Price
Benchmarking
Process Mapping To Eliminate Low Value Activities
Developing Purchasing Material/Services Strategic Plans
Resisting Price Increases
You Will Never Be Better Than Your Suppliers
Supplier Performance Measurement
Cost Saving Methods

Day Three : Methods of Price Evaluation

Price Justification
Model For Selecting Analysis Methods
Methods Of Price Analysis
Competition
Historical Prices
How Much Profit Is Fair
Methods Of Cost Analysis
Breaking Down The Elements Of Cost
Developing “Should Cost”

Day Four : Successful Negotiations

Our Responsibilities As Agents
Negotiation Skill Sets
Steps In Negotiation Preparation
Methods Of Persuasion
What Does Win/Win Really Mean?
Determining The Issues
Defining Issues For Specific Contract Provisions
Payment Terms
Progress Payments
Warranties
Spare Parts
Rating & Valuing Issues
Standards Of Ethics In Purchasing And Contracting Conduct

Day Five : Determining Strengths and Weaknesses

Evaluating Your Position
Know Your BATNA
Analyzing The Other Side
Negotiation Objectives Diagram
Negotiations Planning Forms
Prepare The Negotiation Team
Tips For The Actual Negotiation
Participants will negotiate model cases and discuss the results to provide an opportunity for hands on experience

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Day 5

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