PurchTips - Edition # 158

 

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Negotiating Successfully In Inflationary Times

By Charles Dominick, SPSM, SPSM2, SPSM3

How Do You Negotiate When Inflation Is Rampant?

Inflation provides an easy excuse for even the smallest suppliers to try and raise prices. Suppliers often see inflation as a golden opportunity to increase margins and make up for the preceding lean years where they have been forced to give you price concessions.

So what are you to do when markets are rising and negotiating power swings in favor of the sellers? Do you succumb to the widely held belief that pricing control and predictability go out the window in inflationary times?

No way! There are several negotiating tactics that you can use to achieve cost containment that is better than market performance, even when prices for everything seem to be going up.

Improve Communications – Providing your supplier with better and more robust information can reduce perceived risks and lower your costs. Share real time sales data, inventory levels, and production output figures with your supplier to increase trust and eliminate the need for your suppliers to "hedge."

Commit to a Longer Term Deal – In inflationary times suppliers have a greater ability to choose their customers. You can become more important to your supplier by committing to a long term agreement. You can also deepen the relationship through joint process improvements targeted at reducing waste or improving yields.

Ensure Future Protection – While agreeing to a long term deal can make you more valuable to your suppliers and earn you the associated benefits, agreeing to a long term, fixed price deal just as the market peaks can be one of the worst mistakes you can make.

Commodity prices are often cyclical. Negotiate the right type of price adjustment clause into your contracts so that today's price hike doesn't become permanent. Contract clauses should be structured to reflect the specific type of direct material being sourced and should allow for bi-directional price adjustments so that you can receive cost concessions when the market slows.

There are always things you can do to improve your situation. The opportunity to work with your suppliers on reducing the "soft costs" of doing business together exists irrespective of market conditions. Getting your suppliers to agree to increase the services they offer yourcompany or decreasing transactional costs through order automation, consolidated shipments, and similar process improvements are great ways for you to add value to your company, even when inflation is running wild.

To improve your negotiating skills, consider the online course "Powerful Negotiation For Successful Buying." Learn more by clicking here.

(keep reading for a FREE Offer)

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:

  • FREE $30 gift certificate to Amazon.com!
  • FREE CD-ROM with printer-friendly versions of the class materials!
  • FREE Purchasing Performance Measurement spreadsheet template!
  • FREE audio CD about purchasing job security!

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

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Free Procurement Training & Certification Starter Kit

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.

Click here to learn more

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.