Quality of a Negotiation

Quality

 

In most cases, the negotiator’s objectives require obtaining the quality specified by design engineering or by the user group.  Obviously a highly advanced and accurate management information system must be available to provide the data a negotiator needs to make an optimal decision.

 

Fair and Reasonable Price

 

In many cases, the establishment of a fair and reasonable price for the desired level of quality becomes the principal focus of the negotiation process.  While the negotiator may focus on obtaining a fair price, this must be done in the context of obtaining the lowest total cost, as was discussed previously.

 

On-Time Performance

 

Inability to meet delivery schedules for the quality and quantity specified is the single greatest supplier failure encountered in supply management operations.  It results primarily from 1) failure of requisitioner’s to submit their purchase requests early enough to allow for necessary supply and manufacturing lead times and 2) failure of supply management personnel or the negotiating team to plan the delivery phase of negotiations properly.

 

Because unrealistic delivery schedules reduce competition, increase prices, and jeopardize quality, it is important that supply management personnel or the negotiating team obtain realistic delivery schedules which suppliers can meet without endangering the other requirements of the purchase.

 

Control

 

Deficiencies in supplier performance can seriously affect, and in some cases completely disrupt, the operations of the buying firm.

 

Cooperation

 

Cooperation is best obtained by rewarding supplier that perform well with future orders. Good suppliers expect courtesy, pleasant working relations, timely payment, and cooperation from their customers.

 

 

Supplier Relationship Management

 

Negotiators should recognize that current actions usually constitute only part of a continuing relationship.

 

A negotiator must realize that any advantage not honestly won will, in all likelihood, be recovered by the supplier at a larger date with interest.

 

As a matter of self interest negotiators must maintain a proper balance between their concern for a supplier’s immediate performance on the one hand and their interest in the supplier’s long-run performance on the other hand. 

 

Negotiation is not only used to reach an agreement on price but also is a process employed throughout the procurement cycle.