OpenReference

The activities associated with preparation, dialogue and reaching an agreement for the purpose of purchasing products or services. This includes understanding the product or service to purchase, knowing the seller, understanding bargaining positions of parties involved, fact finding meetings, internal reviews, bargaining meetings and debriefings.

General objectives of negotiation include:

• Agree on specifications of product or service - what
• Agree on a fair price for product or service - how much
• Agree on delivery terms and conditions - when, where
• Agree on delivery performance - quality, on-time performance

Additional objectives of negotiation may include agreement on information exchange, inspection processes, flexibility.

Notes

Negotiation is sometimes confused with haggling or price cutting (win-lose). Whereas some situations require such approaches, the Negotiate process is intended to cover negotiations from the widest possible interpretation -- including approaches such as win-win, collaborative and alliance related negotiations. t:Two-Stage Tendering

Hierarchy

ID	Name	Level	x
S0	Strategic Sourcing	2	S0
S006	Negotiate	3	S006

Metric(s)

ID	Name	Level	x
DP11	Orders Damage Free Ratio	2	DP11
DP12	Orders Defect Free Ratio	2	DP12
DP13	Orders On-time Ratio	2	DP13
DP14	Orders In-full Ratio	2	DP14
DP15	Error-free Documentation Ratio	2	DP15
RS14	Sourcing Cycle Time	2	RS14
CO11	Cost of Goods Sold	2	CO11
CO12	Distribution Costs	2	CO12
AE12	Days of Inventory	2	AE12
AE13	Days Payables Outstanding	2	AE13
SD11	Intake Sustainability Ratio	2	SD11

Workflow

From Input(s)	Process	Output(s) To
wf_process wf_arrow C104 Negotiations S004 Potential Supplier S005 Potential Supplier	S006	wf_arrow wf_process Negotiations C104 Accepted Offer S007

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