Procurement and Suppliers – negotiating a better partnership

Trading can be traced right back to the dawn of our species where pre-historic people bartered goods from each other before the invention of currency. The key element of trading has always been communication, yet fast forward to the present day and the opposite seems to be prevailing, particularly for those tasked with buying goods and services for larger organisations such as supermarket chains or large Government Departments.

In Supply Management this week, Philip Peters the MD of Leading National Training writes about the growing disconnect between buyers and sellers, the latter striving hard to form a balanced and fair business relationship whilst the former tries to avoid face to face communication at all costs, focusing only on negotiating the lowest possible prices.

As professional recruitment consultants it’s something that resonates, particularly as our business has experienced exponential growth and the number of contracts and supply agreements we are asked to adhere to has increased. Like many suppliers the rise in business opportunities excited us at first. We were engaging with great brands, big well-known names in the market that the Procurement talent in our networks would see as Employers of Choice and be keen to engage with.

Digging a little deeper however we began to realise that a great name didn’t always guarantee a good relationship or fair terms. Inequitable payment stipulations, excessive rebate periods and low margins were just a handful of the things we had to negotiate because the businesses in question felt they had the upper hand.

In some instances we were able to collaborate to get a fairer deal. Many of the procurement and HR departments tasked with managing the supply agreements, were open to discussing the value we could add as specialists and why healthy margins, reasonable rebate periods and fairer payment terms would ensure we were able to deliver effectively on recruitment projects. Others remained both resistant and elusive to our suggestions and walking away remained our only real option.

For others out there the choice might not be as easy. SME’s, micro-businesses and even some larger suppliers may feel pressurised to sign up to terms that are both unprofitable and unsustainable, simply because they are operating in highly competitive markets or the message from the top demands quick wins and high volume. As the economy gains a firmer footing however suppliers are beginning to push back, creating ripples in the current buyer/seller status quo.

In support of this we have noticed a growing demand in the procurement recruitment market for procurement professionals who have strong stakeholder management skills and are able to engage with suppliers to nurture rewarding, mutually beneficial relationships. This move away from the old, transactional ways of working should help open the door for more equality in the buyer/seller partnership.

About the Author

Helen Harling

Office and Marketing Manager for both Procurement Heads and sister brand HR Heads. Graduating with a marketing degree, Helen has continued her passion by leading our marketing function forward. You will see her blogging, tweeting, posting, videoing about Procurement Heads. You can see this on our LinkedIn, Facebook, Twitter, Google+ and Instagram page.

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