Purchasing Techniques, Negotiation and Cost Reduction

Course Information

  • the date

24/03/2025

  • Duration

5 days

  • The city

Kuala Lumpur

  • Cost
  • Type

in-house

Course details

In today's competitive business environment, organizations must develop effective purchasing strategies to optimize costs, strengthen supplier relationships, and enhance overall procurement efficiency. Procurement professionals must master cost-reduction techniques, strategic negotiation skills, and price evaluation methods to drive value and maintain financial sustainability.

This Purchasing Techniques, Negotiation, and Cost Reduction training course provides participants with practical tools and methodologies to streamline purchasing processes, analyze supplier pricing models, and execute cost-saving strategies. The course covers advanced cost evaluation techniques, including Total Cost of Ownership (TCO), Pareto Optimality, and "Should Cost" analysis, while equipping participants with the negotiation skills and theoretical foundations needed to secure the best procurement deals.

Through real-world case studies, interactive exercises, and expert-led discussions, participants will gain the expertise to develop cost-effective purchasing strategies, identify non-value-added activities, benchmark supplier pricing, and negotiate successfully with vendors.

By the end of this Purchasing Techniques, Negotiation, and Cost Reduction course, participants will be able to:

Apply modern cost reduction models, including Total Cost of Ownership (TCO) and Pareto Optimality, to optimize procurement spending.

Analyze purchasing patterns and eliminate non-value-added activities to enhance cost efficiency.

Evaluate supplier pricing structures and compare internal price indexes with external market indices to gain competitive insights.

Develop comprehensive "Should Cost" estimates using structured cost analysis frameworks.

Enhance negotiation skills through structured preparation, persuasion techniques, and ethical negotiation practices.

Use systematic methods to assess key negotiation issues, ensuring alignment with win-win negotiation outcomes.

Explore negotiation theories, including game theory and conflict resolution models, to improve strategic decision-making in procurement.

This course is ideal for professionals involved in procurement, purchasing, supplier management, and cost optimization. It is suitable for:

Procurement and Purchasing Managers

Supply Chain Professionals

Finance and Cost Control Experts

Operations and Logistics Managers

Business Consultants and Contract Specialists

Executives and Decision-Makers

Course outline

Modern Methods in Cost and Productivity

  • Overview of cost reduction models and the strategic importance of purchasing in boosting organizational productivity.
  • Understanding the application of Pareto Optimality to prioritize cost-saving initiatives and focus on high-impact areas.
  • Analyzing spending patterns and effective cost control measures to identify areas of excessive expenditure.
  • Exploring Total Cost of Ownership (TCO) models to uncover hidden costs beyond the purchase price.
  • Addressing proven cost reduction initiatives and continuous improvement strategies within procurement functions.
  • Top Data mining techniques and modern spend analysis tools to drive strategic decision-making.

Identifying Cost Reduction Opportunities

  • Reviewing Internal purchasing price indexes and benchmarking them against external market indices.
  • Understanding the dynamics of the supplier marketplace and the various pricing structures used by suppliers.
  • Best practices in cost reduction through systematic benchmarking and performance measurement.
  • Exploring business processes to identify and eliminate non–value-added activities that drive unnecessary costs.
  • Techniques for resisting price increases and ensuring supplier performance meets set standards.

Methods for Price Evaluation

  • Examining rigorous methodologies for price analysis and justification to ensure fair procurement decisions.
  • Evaluating the different components of cost through detailed cost analysis frameworks and cost breakdown structures.
  • Exploring "Should Cost" estimates by comparing actual, selling, and buying prices to determine fair value.
  • Analyzing Competitive dynamics and historical pricing trends to inform future price negotiations.
  • Techniques for multiple cost analysis to assess supplier quotes and determine optimal pricing.
  • Examining Models for selecting the most appropriate analytical methods for different procurement scenarios.

Skills for Successful Negotiation

  • Exploring strategies for comprehensive negotiation, including pre-negotiation checklists and planning tools.
  • Identifying Key issues and using structured methods to rate and value each issue in the negotiation process.
  • Defining persuasion techniques and influencing strategies to foster constructive dialogue with suppliers.
  • Steps to conduct A win-win negotiation framework that ensures mutually beneficial outcomes and long-term partnerships.
  • Understanding Negotiation ethics and professional standards to guide conduct during discussions.

Theoretical Foundations and Strategic Frameworks in Negotiation

  • Reviewing Core negotiation theories, including game theory, conflict resolution models, and behavioral economics, to understand strategic leverage and decision-making.
  • Analyzing the concept of BATNA and alternative strategies from a theoretical perspective, emphasizing their role in achieving optimal negotiation outcomes.
  • Examining Academic models of counterparty behavior and power dynamics to predict and interpret negotiation tactics.
  • Structuring Negotiation objectives and strategies using conceptual frameworks and planning diagrams grounded in scholarly research.
  • Exercise: Participants will create a negotiation model and a discussion of results to provide a hands-on opportunity
  • Review of the course and “Question and Answer session”

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