Negotiation No Longer the Most Important Skill for Purchasing and Supply Chain Managers

on Monday, April 2, 2012

Next Level Purchasing has just released “The 2012 Purchasing and Supply Chain Management Career and Skills Report “. The report summarizes their findings from a survey of over 2,500 purchasing and supply management professionals from around the world. The research concluded that Negotiation, as a skill, has placed unseated from its 5 year reign as the number one most important skill, and has shifted to second place. It was unseated by Sourcing & Supplier Selection as the most important skill perceived by the industry. Negotiation totaled 15% of the votes while Sourcing & Supplier Selection accrued 19%. Other skill choices included Planning/Strategizing, Communication/Relationship Building, and Inventory Management, among others.

So, what has caused this change in perception? Well, there are several reasons. A major reason is most likely the state of the economy that has created this shift. Due to frugal buyers, suppliers have had to adjust their selling strategies over the past couple of years. Some have slimmed down their line of products; others have concentrated their selling in certain markets. This means that some suppliers aren’t willing to come to the table with every buyer. They are picking and choosing buyers based on their own criteria, much like the buyers are doing with the sellers.

 This strategic mindset also has created an atmosphere in which suppliers are no longer willing to adhere to customary buyer sourcing practices. With lean staffs and budgets, suppliers don’t have the man power or time to invest in completing lengthy or burdensome RFPs. They are especially losing patience with what they perceive to be RFx spamming and “price phishing.” This rings true even for incumbent relationships.

To achieve best in class pricing, it is necessary that buyers customize their sourcing approach based on the category and the marketplace being entered. They also need to scorecard suppliers, a thorough and objective methodology for choosing the optimal business partner, to fully understand the availability of the buyer’s requirements and ensure the right decision is made.

Understanding a shifting marketplace and being able to shift procurement strategies is critical to any business and procurement professional who wishes to continue to drive savings from their supply chains. The results for this survey conclude that savings go up when procurement personnel are adequately trained. Equally beneficial to the individual is that usually their salary also increases with proper training.

 For more information on the Purchasing & Supply Management Career & Skills Report compiled by Next Level Purchasing, click here.

1 comments:

Joe Kohls said...

I agree with most of Maddy's points. I have lead a IT Vendor Management orgainzation for several years and I can say our value add proposition to the corporation is more than negotiations. The negotiation function is still at least 50% of the value since price is a small part the larger picture. Budgets continue to be cut every year so in order to meet budget beyond price concessions one must look for other ways. For example: We have been successful professionally pushing back on the status quo internally with our business partners who always want the cadillac of products and services. This has yeilded us several million dollars of savings without changing price.

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