Black Belt Negotiators
True stories of business collaboration
By Purchasing Staff -- Purchasing, 2/2/2009 7:00:00 AM
Are you an expert negotiator? Then share your experience with other purchasing pros. Send us your examples of successful negotiations, and we’ll include them in our file of Black Belt Negotiator case histories.
Purchasing’s Black Belt Negotiators column relates real examples of actual negotiations readers have been involved in, describing the issues at stake and how the procurement staff resolved the negotiations.
Read these examples and see if you can come up with a better strategy for the negotiations.
And send us your own examples. We’ll run them in our column so you’ll be known as a Black Belt Negotiator too. Send them to pteague@reedbusiness.com
How to use shipping schedules to get Lean and save
A esting-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 Instron 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.
Archive:
How to get more value from a machine builder - March 2009
How to save on banking services -Feb 2009
How to win internal allies - Jan 2009
How to ensure supply meets demand - Dec 2008
How to forge a contract for forgings - Nov 2008
How to make "one" bigger than "five" - Oct 2008
Resin supplier gets tough - Sept 2008
New twist on low-cost-country sourcing - Aug 2008
How to improve supplier performance - July 2008
Spring price gives bounce to cost-cutting effort - June 2008
How to handle single sourcing -May 8, 2008
'Deliver those connectors on time—or else' -April 8, 2008
'Cut those packaging costs' -Mar 13, 2008
'The Battle of the Forms' -Feb 14, 2008
"Bowled over by sourcing constraints" - Jan 17, 2008
'If your MRO prices are the best, prove it' - Dec 13, 2007
No tiptoeing around those resin price hikes - Nov 15, 2007
FPGA costs: ‘Your margin is too high’ - Oct 18, 2007
The cable guys' dilemma - Sept 13, 2007
'Sorry, no price break possible' -Aug 16, 2007
“Tell us your real costs”-July 14, 2007
'It's your problem, not ours.'-June 14, 2007
'The robot costs too much!' - May 3, 2007
| Are you a black belt negotiator? Tell us what you would have done in this example? And tell us the details of one of your negotiation successes. We’ll print it here and in Purchasing magazine so others can learn from your experience. Send your case history to pteague@reedbusiness.com and title it Black Belt Negotiators. |
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Agenda
06/11/2009
