Negotiations , Other Management

Negotiations 

One of the most important activities performed by the supply managers is to negotiate agreements or contracts with the suppliers. Although supply management is definitely not the single group in the organisation that negotiates, negotiation is a fundamental part of every sourcing process.  

Negotiation is the best way to employ the supply management strategies and plans that a business unit develops. 

Material inputs account for more than 60% of sale value for any project. Hence, cost saving at this stage will contribute to direct profit for the company. 

Triangle Talk is the simple negotiation tool, which can help the negotiator to begin the initial preparation for a forthcoming negotiation.  

The figure shows the set of steps followed in Triangle Talk:  

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Figure : Steps in Triangle Talk 

Let us now discuss these steps in detail: 

  1. Step 1:  Triangle Talk is a tool used to determine and formalise the negotiators precise goals and objectives for the forthcoming negotiation. By being precise with ones expectation and noting down the points, the  negotiators remain fixed on their predetermined priorities during the negotiation. Writing down the points to be negotiated allows the negotiator to refer back to them during the course of the negotiation. If the negotiators are clear about their priority, they are more likely to achieve it in the final agreement.  
  2. Step 2:  In this step, the needs of the negotiators counterpart is determined. It is difficult to conclude without understanding the needs of the other party. The needs or wants of the other party, their underlying interests have to be determined in advance. However, the negotiator cannot automatically assume that the other party thinks in the same way that they do. The negotiators are free to raise open-ended probing questions to confirm if their preliminary analysis of the other party is right. In addition, the negotiator should develop a strategy and associated tactics that will satisfy the needs of the other party. This allows us to step into step 3 of the Triangle Talk. 
  3. Step 3:  In this step, the negotiators own requirements are analysed along with the requirements of the other party. In this way, the proposals and counterproposals can be offered. They take both sets of requirements into account and are framed in such a way that the other party agree to the negotiators? demands. The decisions of the negotiator and the other party should remain flexible and reasonable so that both can work on the similar agreement, while acknowledging the other party?s concerns. The negotiators can bring about this by negotiating about those needs first, while framing their proposals. At times, negotiation becomes a lengthy and cumbersome process. Hence, it requires tactful and careful planning.
Posted Date: 9/28/2012 1:20:58 AM | Location : United States







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