Win-win Negotiation
Many companies in today's economy are looking for win-win solutions when it comes to their business supply chain management. The old standard has been to tie up resources in one geographical location, like the "production warehouse," and have a near monopoly on that supply chain. While economies of scale can bring tremendous savings to a manufacturer, it also limits options because a factory can only grow so fast. A win-win negotiation, on the other hand, is a careful exploration of both your position, and the opposing number's position, so as to get as much of what you need as you can. If you both walk off with what you need, that is a win-win! One company saves money by not having to build an additional warehouse or hire additional distribution staff, while the other company avoids being forced to rent expensive machinery, or hire new people to man the warehouse.
So, how do you ensure that a win-win negotiation occurs? First, you need to ask questions. You might think that asking questions means that you are not trusting your fellow party, but that is not true. If the other party is asking all of the right questions, you might think you are getting a fair shake, but if the other party is withholding information or avoiding certain questions, you might think they might be trying to keep some information from you. Before you enter into a negotiation, make sure you have asked every question that you could think of, and double checked to make sure there are no misprints or omissions that will later come back to bite you.
Once you have negotiated the price, terms, and delivery dates, you will then be required to sign documents, seal agreements, and finalize the sale. You may be tempted to skip this step, but it is actually more important. The last thing you want to do is to sign away your rights as a buyer. A win-win negotiation outcome is only as good as the conditions laid forth before you.
CIOP Webinar Series
Learn the Global Best Practices in Supply Chain Management, Procurement, and Inventory Management.
