Strategic Sourcing Toolkit

In my prior posting on this subject, I mentioned the value of creating a negotiations strategy worksheet to organize key information in an easy-to-review fashion. This is one of the most powerful tools for your strategic sourcing toolkit.

As a CPO, and more recently as an adviser, I have worked with numerous formats for such a worksheet. While the formats for displaying the information tend to be driven by personal tastes, the first step is identifying and acquiring the right elements (the content).

As shown in the list below, the key content elements are: a detailed description of our objectives (this typically includes the MDO, LAA, and BATNA for each negotiating parameter); our understanding of the supplier's objectives and their criteria for success; our leverage points if any; key individuals at the supplier and their respective objectives and hot buttons; red flags (key information gaps or vulnerabilities); and potential actions that can be used to leverage our strengths or to eliminate red flags.

Acquiring this information is one of the benefits of using a strong 6- or 7-phase strategic sourcing process. Organizing this key information can help speed the evaluation and consideration of negotiations strategy options, as well as the crafting of relevant negotiations messages to your suppliers.

Create a Negotiations Strategy Worksheet

Key Elements:

  • Our objectives, in detail
  • Supplier objectives/criteria (issues, needs, wants, importance)
  • Our leverage points
  • Key individuals/players at the supplier, their objectives, hot buttons, receptivity to our MDO, personal agendas
  • Red flags - key information gaps, or vulnerabilities
  • Potential actions to leverage our strengths, or eliminate red flags

A thoughtful consideration of these elements helps to drive strategy and an appropriate message.

-- Robert A. Rudzki

Prior to founding Greybeard Advisers in 2004, Mr. Rudzki served as Senior Vice President for Bayer Corp. Prior to Bayer, he was an executive at Bethlehem Steel Corp., where he oversaw Bethlehem's global procurement and logistics activities. A frequent speaker at conferences, Mr. Rudzki is co-author of the supply management best seller Straight to the Bottom Line®, and On-Demand Supply Management. He is also the author of the leadership book Beat the Odds: Avoid Corporate Death and Build a Resilient Enterprise.

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