Procurement Savings and Negotiation

We will investigate the challenges of measuring procurement savings and look at some important aspects of negotiation.
In this we shall
• Explore why procurement savings are difficult in practice to measure
• Consider what procurement might negotiate on with suppliers
• Delineate needs versus wants in planning for negotiation
• Explore the concept of a BATNA in negotiation
On completion of this Week, you will be able to
• Identify the different types of procurement savings
• Critically analyse the challenge of measuring procurement savings
• Outline the processes of negotiation
• Explain the importance of a BATNA in a negotiation
Leturecast
In this lecturecast, we will Identify the different types of procurement savings, critically analyse the challenge of measuring procurement savings, outline the negotiation processes, and explain the importance of a BATNA in a negotiation.
Reading
This week’s reading are all academic articles and will help to build your knowledge and understanding of the complexities of procurement cost saving measures, negotiation tactics, and how BATNAs can be used in practice.
Reading
Sebenius, J. K. (2017) ‘BATNAs in Negotiation: Common Errors and Three Kinds of No’, Negotiation Journal, 33(2), pp. 89–100.
Nollet, J. et al. (2008) ‘When excessive cost savings measurement drowns the objectives’, JOURNAL OF PURCHASING AND SUPPLY MANAGEMENT, 1 January, pp. 125–135
Discussion Forum
Identify an example of a procurement saving in a project for your organization. Explain the type of saving and how the saving might be measured. Post these on the discussion board. Post replies to other learners’ posts commenting on the potential challenges of measuring the saving.