What Makes You the Best Negotiator in Supply Chain
The best negotiators are not the ones who excel at “getting an unfair advantage” or “getting the upper hand” or “getting the other side to agree to your demands”.
Here are some of the best skill sets which made negotiators into the best negotiators in the world.
Skill #1- Negotiations are won and lost before they ever start
The best negotiators recognize that it’s not what you do in the negotiation room that counts, but it’s what you did before you ever entered the room that counts. 90% of your time should be spent in preparation, and your analysis and preparation is what sets you up for success, not your negotiations ploys.
Skill #2- World class negotiators are experts at investigative negotiations
Investigative negotiators spend deep amounts of time understanding the unique needs and wants of the other side and don’t assume the only reason the supplier is negotiating with you is to get your money.
Skill #3- World’s best negotiators are not outstanding talkers, but rather, outstanding listeners
Listening not only aids you in gathering counter intelligence, it also brings down barriers and makes the other party start to know, like, and trust you – which are vital components if you want the supplier to help you experience negotiation success.
Skill #4- World class negotiators don’t just negotiate what’s on the table, but they also negotiate what’s not on the table
World class negotiators know how to create value and invent solutions that can satisfy the other party without impacting their TCO value proposition.
Skill #5- World’s best negotiators have not fallen into the trap that psychological negotiation techniques are all you need for negotiation success
They understand that you need to do cost modeling. Should cost, must cost, total cost modeling – all of them need to be a part of your arsenal, and you need to do the right ones at the right times.
Skill #6- The world’s best negotiators map out their concession strategies in advance
They know what they plan to give away and what they plan to receive in return before negotiations start. And this is mapped out in such a way to give away high value but low TCO concessions, while receiving in return high value but high TCO concessions.
This means that what you give away is highly valued by the supplier but costs you little, and what you receive is highly valued by you, but buys you a lot. For instance, you might receive a significant price reduction in return for letting the supplier use your company logo in advertising. If your company allows this, it costs you near nothing, but buys you a lot. All of this has to be planned before negotiations start.
Skill #7- Finally, the world’s best negotiators are not hammering suppliers for lower prices, but instead are taking costs out of the supply chain and driving product design for TCO
Only about 10 – 20% of the negotiation opportunity is in negotiations. The rest of your savings opportunities are in driving upstream product design for TCO and determining how to streamline what is being purchasing to take costs out of the equation – and doing the same with supply chain costs that can be influenced. Hammering suppliers for a lower price is not going to get you there.
Supply Chain Management needs to be and be perceived as a value added center of profit inside the company. You are stuck in the old role of purchasing if you’re not doing these things.
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