Prices so transparent they'll spell the end of negotiation

| 0 Comments
Sales transparency.jpgE-sourcing, global trading networks, online communities and procurement's scrutiny into still-cloaked categories may force market pricing for goods and services to become so transparent that negotiation would be a lost art in the future, envisions a report on Ideas for Procurement in 2020, the outcome of a dialogue between Ariba and leading procurement practitioners.

“We spend so much time today trying to obtain fair prices for the goods and services we purchase,” says Roy Anderson, Vice President of Procurement Services with Metasys Technologies. “That has to go away because it is such a small piece of the whole effort and it is a piece that can be driven by the marketplace.

“The value proposition,” says Debbie Manos-McHenry, Chief Sourcing Officer with Huntington National Bank, “will be much more about speed-to-market, exclusivity, innovation and gainsharing in supplier relationships than about harvesting 3-5% savings from contracts coming up for renewal.”

Replacing the old price negotiation focus will be much greater emphasis on:
• Assembling the correct portfolios of suppliers.
• Rapidly extracting innovation and other value from supplier bases.
• Building exclusive commercial relationships with leading suppliers that share both risks and rewards.

“The cloud,” predicts Anderson, “will force price transparency. Savings will be tied to things like discounts and rebates for reaching certain volumes or paying early. Meanwhile, in services categories, such as consulting, we will continue to gain visibility into things like labour and overhead costs, so transparency will come to those categories and we will be able to shift the conversation to how suppliers create value for us.

“We need to get more focused on making sure we have the right supplier portfolios to bring innovation and value to our companies, which has a tenfold improvement over getting another dollar off their unit price.”

Maersk Vice President of Procurement Henrik Larsen suggests that transparent, open-book trading relationships will be the key that empowers procurement to move beyond the “very tedious” things that procurement does to add value today. “Transparency will enable us to get our teams interacting with suppliers’ teams and working to find bright new ways of delivering competitive advantage to both sides.”

The information in this article was sourced from the report ‘VISION 2020 Ideas for Procurement in 2020 by Industry-Leading Procurement Executives’.

Leave a comment


SmartProcurement Newsletter
X

Please enter your details below to receive the SmartProcurement Newsletter for FREE on a regular basis.

As part of the SmartProcurement Newsletter you will be receiving World Class Procurement News, Tools, Tips, Tactics, Procurement Training updates, Upcoming Events, and the latest Procurement Career Openings.

* Email Address:
* Title:
* First Name:
* Surname:
* Company:
  Position:
* Country:
* Public / Private:

 

Career opportunites

Purchasing and Supply Manager

  • <500 000 >500 000 Gauteng Permanent Procurement Management Supply Chain
Purchasing and Supply ManagerThe CSIR has a vacancy ...More

Senior Manager Public Sector

  • >500 000 Gauteng Permanent Procurement Management Projects / Category Management
 Senior Manager Public SectorTotal Cost to Company: R1.1mil ...More

Senior Manager: Mining

  • >500 000 Gauteng Industrial Engineer Permanent Projects / Category Management
Senior Manager: MiningTotal Cost to Company: R900k – ...More

SUPPLY CHAIN MANAGER

  • >500 000 Gauteng Permanent Procurement Management Supply Chain
SUPPLY CHAIN MANAGER(Total Cost to Company R750k – ...More

Master Data Management Advisor

  • >500 000 Gauteng Permanent Procurement Management Projects / Category Management
 MASTER DATA MANAGEMENT ADVISOR(Total Cost to Company R750k ...More

PRO - Performance Reporting

  • >500 000 Permanent Procurement Consultant Procurement Management Projects / Category Management
PRO - Performance ReportingTotal Cost to Company: R800k ...More

PRO - Risk & Governance

  • >500 000 Gauteng Permanent Procurement Management Projects / Category Management
PRO - Risk & GovernanceTotal Cost to Company: ...More

Supply Chain Site Manager

  • >500 000 Gauteng Permanent Procurement Management Supply Chain
Supply Chain Site ManagerTotal Cost to Company R1mil ...More

Chief Financial Officer

  • >500 000 Gauteng Permanent Procurement Officer / Specialist
Chief Financial OfficerTotal Cost to Company R1.5mil – ...More

Process Engineer- WMS

  • <500 000 >500 000 Industrial Engineer Permanent Projects / Category Management Western Cape
Process Engineer- WMS(Total Cost to Company R350K – ...More

Forecast Analyst

  • <500 000 Analyst Permanent Procurement Management Western Cape
Forecast Analyst(Total Cost to Company R350K – R500K) Location: ...More

Group Category Manager: Indirects

  • >500 000 Permanent Procurement Management Projects / Category Management Western Cape
Group Category Manager: Indirects(Total Cost to Company R700K ...More

Group Category Specialist: Chemical

  • >500 000 Gauteng Permanent Procurement Officer / Specialist Strategic Sourcing
Group Category Specialist: Chemical(Total Cost to Company R700K ...More

Sourcing Specialist - 3rd party

  • >500 000 Gauteng Permanent Procurement Officer / Specialist Strategic Sourcing
Sourcing Specialist - 3rd partyTotal Cost to Company ...More

Global Procurement Lead (Processing)

  • >500 000 Gauteng Permanent Procurement Management Supply Chain
 Global Procurement Lead (Processing)Location: JohannesburgTotal Cost to Company ...More

Global Supplier Performance Manager

  • >500 000 Gauteng Permanent Procurement Management Supply Chain
Global Supplier Performance Manager Location: Johannesburg  Cost to ...More

Group Customer Service Lead

  • <500 000 >500 000 Analyst Gauteng Permanent Procurement Officer / Specialist
Group Customer Service Lead  Location: Johannesburg As the ...More

Business Intelligence Manager

  • <500 000 >500 000 Gauteng Permanent Procurement Management Supplier / Business Development
Business Intelligence Manager Location: JohannesburgLead the development, implementation, optimization ...More

Group Procurement Manager

  • <500 000 >500 000 Gauteng Permanent Procurement Management
Group Procurement Manager Location: Johannesburg  A Global Organization ...More

Commodity Manager Packaging

  • >500 000 Commodities Gauteng Permanent Projects / Category Management
Commodity Manager Packaging  Location: Johannesburg Salary: R850k– R1.1mil ...More