There’s No Glamor In An Information-Based Negotiations Approach
The information-based
approach requires immense research about the industry, the supplier’s financial
condition, and competitive forces. Some suppliers may be very reluctant to
provide financial information and their margins. The supply chain professional
must work to overcome this reluctance and build trust with the supplier.
Understanding their culture and their organization is critical. You are, in
essence, trying your best to put yourself in their shoes and mimic, as well as
possible, their anxieties and fears about the whole process. The information-based
approach is not for the fainthearted or for those who do not want to persevere.
It should only be exercised for critical materials or services. These are those
that have a major impact on your bottom line or can give you a critical competitive
advantage. One key guide would be if your customers value the aspect that the
supplier brings to the table. Since it requires ongoing market research, and it
works better when executives are exchanged (stay in person at the site and
become part of the team) however, the resources necessary to pull off such an
information-based approach should not be underestimated.
Link to my book Common Sense Supply Management
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