PurchTips - Edition # 191

 

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Picture of Charles Dominick, SPSM, SPSM2, SPSM3

Ethical Negotiation With Multiple Suppliers

By Charles Dominick, SPSM, SPSM2, SPSM3

Is It Ethical To Negotiate With A Non-Low Bidder?

I often get questions about the ethics of negotiating with one or just a select number of bidders after receiving proposals. Should all bidders be given the opportunity to negotiate?

Well, here's my rule of thumb.

I create and continuously maintain a ranking of best bidders at the post-proposal stage of the sourcing process. Whether that ranking is based on price alone or a combination of criteria, I always have it. And my personal rule is to not give a negotiating opportunity to someone without giving the same opportunity to all HIGHER ranked bidders.

So, if you have seven bidders and want to negotiate with the bidder that has the third best rank, the bidders ranked #1 and #2 should also be given the opportunity to "sharpen their pencils." I wouldn't worry about the lower-ranked bidders unless I think that they also have a legitimate shot at actually earning the business. Usually, at that point, I've already ruled them out.

Now, if I negotiated with the third-best bidder and, as a result, got "the best deal" and never gave bidders 1 and 2 an equal opportunity to revise their proposals, that would reek of poor ethical judgment.

One thing about this approach is how it might be abused by the suppliers that you frequently engage in sourcing processes. If they know from experience that they don't have to put their best proposal forward because they will have the opportunity to negotiate later, you may find your sourcing process becoming more complex and less efficient than it needs to be.

You also have to do a self-evaluation and ask yourself "Why am I negotiating with someone other than the top two bidders?" In some cases, it may be due to internal political pressure to keep the incumbent.

Using the competitive bidding process to simply lower the incumbent's price without any realistic chance of actually switching suppliers is unethical. So you need to employ some change management to shape the culture of your organization while also keeping the process fair.

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Spotlight On Professional Development Opportunities

SPSM Certification

Are you tired of not getting enough opportunities, respect, and money out of your purchasing career? Well, guess what? Nothing will change unless you take action towards becoming a world-class purchasing professional.

You see, today's employers refuse to reward employees for yesterday's skills.They demand that purchasing professionals like you use the most modern skills and achieve unprecedented results. They want you to save more money, achieve better operational performance, and reduce risk.

Is lacking a purchasing certification keeping you from getting the results, opportunities, respect, and money that you want out of your career? Today's employers refuse to reward employees for yesterday's skills. They want you to save more money, achieve better operational performance, and reduce risk. They demand that purchasing professionals like you achieve unprecedented results and without the most modern skills that can be a challenging feat!

So how can you acquire the most modern skills, achieve meaningful results, and convincingly prove your capabilities to today's employers? There is an impressive purchasing certification program that will teach you what you need to accomplish all of this and more. It is the SPSM® Certification, earned by completing the Senior Professional in Supply Management® Program. And you could earn it in less than a year - maybe even much less than a year!

Earning your SPSM® Certification by completing the Senior Professional in Supply Management® Program is the action to take if you want to bring the most modern purchasing practices into your organization and achieve your career potential. Learn how to earn your SPSM® Certification (and perhaps get an iPad) (with the option of getting a Study Guide on an iPad) at:

Distinguishing yourself as an achiever in purchasing is key to sustaining a rewarding career, even in these difficult economic times. Earning your SPSM® Certification by completing the Senior Professional in Supply Management® Program is to take if you want to bring the most modern purchasing practices into your organization and achieve your career potential. Learn how to earn your SPSM® Certification (and perhaps get an iPad) at:

Earning your SPSM® Certification by completing the Senior Professional in Supply Management® Program is the action to take if you want to bring the most modern purchasing practices  into your organization and achieve your career potential. And if you sign up for the Senior Professional in Supply Management® Program on or before May 31, 2008, SPSMSM Certification Program on or before 4/30/2007, you also get these and other bonuses valued at over $700:

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To learn how to earn your SPSM® Certification and get these valuable bonuses, visit:

Earning your Senior Professional in Supply Management® (SPSM) Certification is the action to takeif you want to bring the most modern purchasing practices into your organization and achieve your career potential. Learn how to earn your SPSMSM Certification at:

Learn how to earn your SPSM® Certification at:

www.NextLevelPurchasing.com/spsm.html



The Latest Purchasing News

  • Purchasing Managers/Directors: Are you struggling to develop a plan for improving your team's performance? If so, visit: www.NextLevelPurchasing.com/benchmark
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  • Considering a career move?  Next Level Purchasing is seeking a procurement expert for its Director of Education position. Browse this job description and others that prefer candidates with the SPSM® Certification  at: www.NextLevelPurchasing.com/jobs

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This Starter Kit gives procurement professionals like you a clear idea on what it will take to become certified. You'll get an excellent feel for what you will need to learn and how long it will take.

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Included in your free Starter Kit:

  • Access to two lessons from courses that are part of the Senior Professional in Supply Management® Program
  • A Certification & Training Planning Template
  • Case studies
  • A free Basic Membership in the NLPA

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If you are already a member of the NLPA, click here to login and visit the "Starter Kit" tab to access these resources.