Black Belt Negotiators: How to use shipping schedules to get Lean and save
Purchasing's smartest negotiators move from conflict to collaboration fast. Match your wits against these pros. Guess their strategy. Then, read what they really did at purchasing.com/negotiations.
By Purchasing Staff -- Purchasing, 4/30/2009 2:00:00 AM
A testing-equipment manufacturer used a lot of printed circuit boards (PCBs)—about a thousand a year—in its testing systems. The company had arranged to get its PCBs in four drops a year. That schedule saved the manufacturer money, but analyses showed that it didn't lead to Lean operations. Instead, it created bottlenecks.
Problem: The PCB supplier was reluctant to revise the schedule because the supplier thought it was saving money too, even though it had difficulty manufacturing the 250 quantity for each shipment. Any change in the drop schedule would force the supplier to charge more, the company said. The manufacturer, of course, wasn't willing to pay more.
Among possible solutions: Find a new supplier, accept the extra cost, stay with the existing system.
Conclusion: The testing-equipment manufacturer's director of global procurement, offered to analyze the supplier's operations required to ship 250 PCBs four times a year. His analysis showed that the schedule was not saving the supplier money. It was creating bottlenecks at the supplier's manufacturing plants too-and disrupting their production processes.
Purchasing demonstrated how 14 shipments of about 75 PCBs each would be more cost-effective and more manageable for the supplier, while eliminating the manufacturer's own bottlenecks. With that analysis, the supplier agreed to change the shipment schedule as the manufacturer requested, and not ask for a price increase.
Are you a black belt negotiator? Tell us about one of your negotiation successes, and we'll print it so others can learn from your experience. Send it to pteague@reedbusiness.com.
Black Belt Negotiators
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