Category: Procurement

Checklist for evaluation of potential supplier – 1. Competency: Capabilities assessment – measurement against our requirement. 2. Capacity: Supplier’s available resources to meet our orders (staff, equipment, storage, and available materials.) 3. Commitment to Quality: Commitment to high quality standards. ISO 9001 or Six Sigma etc. 4. Financial Health – Cash-positive firms are in a […]

Supplier Scorecard is we used to measure suppliers, and to give qualified or certified status to suppliers. Ideally, The best scoring suppliers per commodity group would get more share in the order. 1) Quality Monthly DPMO (defective parts per million opportunities) = Monthly Quantity Rejected ÷ Monthly Quantity Received x 1,000,000Rolling three-month DPMO to track […]

Review, Aggregate and Consolidate Purchase Requirements & Deliveries Review and Renegotiate existing contracts based Total Cost Avoid/Reduce Maverick Spend Optimize Supplier Base, Inventory, Centralized / Decentralized Purchasing, Catalog Purchasing Value Analysis & Value Engineering, Review Specifications Train and Educate procurement team Process Automation

There are two opposite types or schools of negotiation: integrative and distributive. Distributive Bargaining Basics It’s a one-time-only occurrence. Except for the deal itself, there is no real benefit in investing in the relationship. So, we are generally less concerned with how the other person perceives us or how the other person might view our […]

What is Fact Based Negotiation? Fact-based negotiation is the practice of focusing supplier negotiations on mutually beneficial data on cost structure rather than gamesmanship.

A should cost model is a documented calculation of an estimated price that you create by researching all material costs, labor costs, overhead costs, and profit margins that would apply to an item. Essentially, you are behaving as if you were responsible for manufacturing the item yourself. Application When buying a custom item that only […]