EDITORIAL: The subject matter in the post on LinkedIn by Procurious warrants our attention as it raises a very important question. Here it is in its powerful simplicity:
Extended payment terms, annual pricing reductions, lack of visibility, gain-sharing: Suppliers are pushing back! What will this mean for Procurement?
Procurious post on LinkedIn – April 7th, 2022
Here is my response, what’s yours?
The first thing that comes to mind is “what goes around, comes around.”
For those who adopted an adversarial mindset based on the old “you don’t get what you deserve, you get what you negotiate” – which is a zero-sum approach with a winner and loser, it is payback time.
Over the past 40 years I have seen a gradual evolution in thinking in which procurement professionals have started to view suppliers as partners with whom to work versus being adversaries to beat. Stories from Tim Cummins and Kate Vitasek still continue to resonate with me.
The pandemic for all of its negative impacts has elevated the recognition of just how important it is to take a partnership approach with suppliers. For example, rather than preserve cash flows by extending payment terms at the expense of suppliers who are struggling, innovative CPOs offered quick pay for discount options.
In another example, Facebook (Meta) advanced the payment of outstanding invoices their diverse suppliers had with other buyers. They then collected the money when the suppliers were paid.
Which of the above actions would foster a more loyal and cooperative supply base?
Going forward, the best negotiators are going to be the best collaborators!
Procurement Insights
What Makes Someone A Good Negotiator?
Posted on April 7, 2022
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EDITORIAL: The subject matter in the post on LinkedIn by Procurious warrants our attention as it raises a very important question. Here it is in its powerful simplicity:
Here is my response, what’s yours?
The first thing that comes to mind is “what goes around, comes around.”
For those who adopted an adversarial mindset based on the old “you don’t get what you deserve, you get what you negotiate” – which is a zero-sum approach with a winner and loser, it is payback time.
Over the past 40 years I have seen a gradual evolution in thinking in which procurement professionals have started to view suppliers as partners with whom to work versus being adversaries to beat. Stories from Tim Cummins and Kate Vitasek still continue to resonate with me.
The pandemic for all of its negative impacts has elevated the recognition of just how important it is to take a partnership approach with suppliers. For example, rather than preserve cash flows by extending payment terms at the expense of suppliers who are struggling, innovative CPOs offered quick pay for discount options.
In another example, Facebook (Meta) advanced the payment of outstanding invoices their diverse suppliers had with other buyers. They then collected the money when the suppliers were paid.
Which of the above actions would foster a more loyal and cooperative supply base?
Going forward, the best negotiators are going to be the best collaborators!
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