I was assigned the role of the Supplier for Hi-tech batteries, a regular supplier of batteries in the Supplier Negotiation exercise with Kevin Rhudy who was in the role of the Buyer for Auditory Technologies, Inc. (ATI), a medical device firm. This was my first exposure to an Integrative negotiation and it was an insightful and eye opening experience at applying some of the concepts and principles from our assigned readings, ideas that we had explored in class and actually undertaking a negotiation based on practicality of a business situation. In my professional life, we are not usually negotiating with numbers and prices but with issues relating to the individual health. Kevin and I discussed our preferences for each of the options …show more content…
Both our approaches were directed towards addressing the issues with a collaborative spirit for the greatest benefit to both sides. We agreed that both sides wanted to establish a long term a relationship with each other and were willing to give genuine consideration to each other’s particular needs and interests. This experience has enabled me to reflect on my personal approach towards negotiation, as well as analyze my strengths and potential areas for improvement as a negotiator. In planning for my negotiation, I reviewed the Supplier Payoff Matrix for each of the issues to be resolved. The issues which were likely to offer least resistance were the Electronic Integration and the Inventory. The next issues that were likely to have some pushback were the Quality and lot size. We kept to the last the more contentious issues that included price, volume flexibility, development fees and contract term. Both partners were mutually agreeable on the Electronic Integration and the Inventory issues. We both agreed to have 100% Electronic Integration and have a 3 week inventory to minimize costs to both sides. The next issue that was brought up was the quality and the concerns were raised about the 1000/1000000 i.e. 1/1000 failures. We agreed that this needed to be addressed to a level of 100ppm so that the
Negotiations are a part of daily life whether we are aware of them occurring or not. In everything that we do there are preferred end results and the end results are likely to affect more than one person. The goal in this however, is to ensure that all parties are equally benefited from the actions and reactions that occur to create that end result. While some dealings are done in a more subtle manner without a great deal of negotiation per say there are other situations that would warrant more vocalized mutually acceptable compromises. The purpose of this paper will be to effectively explain a situation of which required negotiation on the part of both parties that almost all of us have endured and that would be the process of buying a
1. How did you plan for the negotiation? Explain how you decided on a strategy?
The next three issues we negotiated were editorial control, preproduction budget, and post production schedule. Again we logrolled with the issues and came to an agreeable decision. The outcome of the negotiation of this particular bundle was evenly distributed. I felt that the director was willing to collaborate with me on these issues. I wanted the entire negotiation to follow the concept of the integrative negotiation process by setting the tone of the negotiation as a win-win. Reflecting on how the negotiation was going to this point I felt that I may have conceded on more of the issues than the director, but the hope was that the director would concede on the issues that were important to me. I felt I was sensitive to the director’s
In preparation for this negotiation, I studied the case diligently. I wrote down, what I felt were the key issues for Joe Tech. I also made a list of pros and cons associated with each issue. I prepared in this manner because it gave me the opportunity to effectively break down the issues of the case as well as focus on important goals without having the extra unneeded information also presented in the case outline. The issues I focused on are as such:
On the contact building aspect of vendor selection, each company involved in the contract negotiation process will have different needs and frameworks that will require attention. The approach by Hudson and her team laying down a framework that focused on fluid and collaborative relationships was import for Kodak. The company had already suffered enough from a mismanaged IT and growing competition. Having the parties sit down and discuss their concerns before drafting a contract for services ensured that everyone had an understanding of what the important needs and outcomes were of the other parties.
When you’re choosing a supplier, you’re not just choosing a particular product, but the people who push that product as well. Issues or late shipments are inevitable, but when those things happen, you want to feel confident that you’re working with professionals that will solve things quickly.
Consequently, negotiation is a process that can be approached in many ways. No matter what strategy we choose, success lies in how well we prepared. The key to negotiating a beneficial outcome is the negotiators’ ability to consider all the elements of the situation carefully and to identify and think through the options. At the same time, negotiators must be able to keep events in perspective and be as fair and honest as circumstance allows. Because a common ground or interest has brought the parties to the negotiating table, a negotiator can benefit by trying to capitalize on this common
Synergy should be encouraged between the two departments, as they are working towards the same corporate goal. In order to update Dynamic’s supply management policy, the company should start to standardize their processes. For the newly awarded contract, we should standardize the process of finding a supplier and standardize testing used for supplier evaluation. By putting all suppliers against the same standards, you should be able to determine which supplier can achieve all your requirements. The supplier should be able to produce a product that meets our company’s standards. In the end, after improving these processes, we should award a long-term contract to whoever we determine to be the best supplier because it is a brand new contract. The longevity of the contract should be determined by the supplier’s performance. There are several benefits to standardizing our processes, such as uniform quality, reduced transaction and purchase costs, and improved inventory management. All these reductions and improvements can be redistributed through the company, enabling us to continually improve. This testing had been done for all suppliers, but the Engineering department decided to solely consider Advanced Wires only, which goes against strategic management policies.
Once the approval for the operational requirements and budget for this project is obtained, my team selected a suitable overseas defense contractor to build and deliver the product according to our specifications. The arduous task of negotiating for the best possible terms for the least price for this contract begins. Due to the complexity of the equipment acquisition involved, the discussions will require many subject matter experts from their relevant domains to discuss the technical issues with their counterparts.
Communication is a very important aspect for Wolfe & Swickard’s target customers. Accurate and timely communication can be achieved through constant share of information. Both companies must work together and communicate in order to ultimately produce a satisfactory end product for the U.S. military. It is important for Wolfe & Swickard to keep its customers in the loop and communicate any potential problems with the manufacturing process as soon as possible. It is also important for Wolfe & Swickard to communicate accurate timelines to its customers.
Smith: How can we go with Agile, they have no experience in manufacturing this critical product. Arthur: I know, Tom. But look at it this way. Agile is one of our most successful overseas suppliers. They have a record of just 70 PPM [parts per million] defects and no delivery defaults in the last three years of supply for all their parts. I am sure they will be able to develop this part successfully. And we will be saving the corporation a decent amount by buying from them in these tough times — Agile is asking US$7.20 per part whereas our local supplier will cost us US$16. Further, as this is a small sub-assembly, the logistics costs will not be more than US$0.80 per piece. Smith enquired whether or not Automek engineers would work with Agile for the development, as done earlier. Arthur mentioned that due to the tight financial situation this might not be possible: But hey, come to think of it, haven’t we given enough support to Agile already? Our engineers have been virtually camping there for the last three years working on new products. I am confident that Agile must have developed sufficient skills by now to develop their processes inhouse. Let us try them out this time, I am sure they will be very successful. And anyway, you will be sending your Supplier Quality engineers to assess the suppliers. If there is anything grossly wrong they will definitely
According to Halpert et al.’s Path model, negotiation consists of different phases such as preparation, differentiation, exploration, and exchange. The preparation phase in our previous negotiation became an essential part that played a role of evaluation of both parties positions in our successful outcome.
5) How would you have done this negotiation differently? Please cite Negotiations best practices that you would
Make or buy is the first fundamental decision that a company has to make at the start of their supplier selection process; it is the decision between developing the good themselves or purchasing it from an external supplier. The factors that produce the definitive decision are both qualitative and
Negotiation is all about a strategy. The end result is usually to end a problem that someone is having, whether it is personally or