Best Practices in Supply Management Journal

63rd Edition, December 2013

Articles In This Issue
"A Challenge Faced by All Procurement Groups - Our Customers"
"Setting the Stage for a Successful Negotiation"

Free Cost Saving Offers, Founder Articles & Appearances, and Job Opportunities.


Free Cost Saving Offers

If you'll contact Strategic Procurement Solution, readers companies may receive FREE cost reduction assessments related to their parcel freight and/or telecommunications expenditures.   These take just a few weeks, without any obligation for additional services. 

Upcoming Founder Articles & Appearances:

On March 7th, Mark Trowbridge will present a one day workshop on Innovative Practices in Technology Contracting for in Anchorage, Alaska. You can learn more by clicking Conference Link 1 to contact ISM/NAPM Alaska.

On March 17th & 18th, Mark Trowbridge will present our two day workshop titled Supplier Performance Management at a 5 star hotel in Kuala Lampur, Malaysia.  Readers can learn more about this conference by clicking on Conference Link 2

March 20th -21st, Mark Trowbridge will be present our Advanced Procurement Negotiation program at a 5 star hotel in Bangkok Thailand.  Learn more about this by clicking on Conference Link 3

Our company's founders often partner with ISM, NCMA, APICS, CAPPO, and NIGP affiliates to present day seminars and dinner event keynote addresses.  More than 100 presentations have been made to local affiliates during our history.  Please Click Here to arrange a presentation for your chapter's 2013/2014 fiscal year.  Note - We now offer CPSM/CSM exam preparation training workshops.

Job Opportunities:  We are currently helping clients fill the following SCM career opportunities.  Contact Strategic Procurement Solutions through our website if interested...

-  Contracts Manager, Financial Services Firm, East San Francisco Bay Area.  Expertise with indirect spend sourcing (Marketing, Technology, HR, Facilities...) and contracts management. Base Salary Between $100K and $115K USD, Excellent Bonus and Benefits Package.  Relocation Negotiable.

- HR Sourcing Leader, Southern Wisconsin Area.  Experience Sourcing and Contracting for HR Services (HMO, PPO, DMO, Benefits Administration, 401K Administration, Consulting Services, Temporary/ Contingent Labor, Training, Recruiting, etc).  Base Salary Between $95K and $105K.  Excellent Bonus and Benefits Package.  Relocation Negotiable.   

- Contracts Manager (6 - 12 month contract assignment), North San Francisco Bay Area, California, Financial Services Company.  Annualized contract compensation between $95K and $115K USD.  Must be locally-based.  

- Manager of Procurement, Greater Sacramento, California.  Experienced governmental procurement leader with strong Capital and Operational procurement and contracting skills with background in progressive municipal procurement.  Base Salary between $95K and $125K.  Excellent Bonus and Benefits Package.  Relocation Negotiable.








































































































This electronic journal is now distributed bi-monthly to over 13,000 Supply Management Professionals around the globe. Note that our educational articles are 'in depth', unlike most online publications.  We hope you enjoy this edition. Feel free to forward to your SCM colleagues!  And keep SPS in mind when your organization needs top quality Supply Management Consulting, Employee Skills Testing & Training, P2P Efficiency Reviews, Cost Reduction Support or SCM Staff Augmentation/ Recruiting Services.



"A Challenge Faced by All Procurement Groups - Our Customers" - by Mark Trowbridge - Principal, CPSM, C.P.M., MCIPS

It's been almost three months since our last edition was sent out. But for good reason. I'm writing this article 35,000 feet above the Atlantic Ocean, halfway home from making multiple presentations on Expert Strategic Sourcing at a 120 person procurement conference in the Middle East. Just a few weeks earlier, an international manufacturing conglomerate flew me across the Pacific to China to train 26 of the firm's Asia-Pacific company leaders on ways to be more strategic in procurement operations. Back in North America, I was privileged to train all procurement personnel for a large State Government organization in sourcing methods for the government. And throughout this time period, I've been leading an intriguing supply chain efficiency review which Strategic Procurement Solutions is performing for a large city governmental group.


Guess What? During these travels, working with clients in many industries, it's been interesting for my colleagues and me to hear about challenges EVERY procurement group seems to face. One of those challenges is the late involvement of procurement in too many of their transactions. Let's be honest, some advanced procurement groups do a much better job of engaging with their internal customers than do others. But even the best groups still struggle to have sufficient advance involvement on every key expenditure project.


What are the results of delayed procurement involvement?


First - If competition cannot occur, because a supplier has already been selected without procurement's advance sourcing involvement, the probable average savings range is reduced from 8% - 15% down to 0% - 5%.


Second - If the time to perform proper sourcing is not available, procurement cannot properly review the customer's requirements, research the marketplace, investigate possible suppliers, develop a sourcing strategy, and conduct said strategy. Even if a RFx can be performed, a rushed bidding process always achieves poor results.


Suppliers understand these factors well, and many selling organizations specifically train their sales people on ways to bypass procurement. An extremely popular selling methodology is that set forth in a book titled Selling to VITO, a best-seller on selling methodologies by Anthony Parinello. This book instructs salespeople on ways to create relationships with one of an organization's Very Important Top Officers (VITO) so that a perceived need is created in that executive's mind for the selling company's high-priced technologies, consulting initiatives, capital projects, products, services... By doing this, the procurement organization is bypassed...until it's really too late to perform our role fully.


So how can procurement become involved at the beginning of more key acquisitions?   Here are four methods which will make a big difference...

Method A - Create an implement a procurement marketing outreach campaign to all of procurement's key customer departments which (i) Assigns responsibility for every customer department relationship to a specific procurement leader; (ii) Educates each customer group about the steps and timing in the procurement process; (iii) Forms regular interactions for procurement in the customer group's key project meetings; and (iii) Provides a tracking methodology to ensure these interactions continue in a track-able manner.
Method B - After the completion of every major sourcing project or capital procurement event, get into the habit of conducting a project debriefing interview with the involved customer department(s). This will provide a basis for improving the interaction on subsequent initiatives.  Winston Churchill once said, "Those who fail to learn from history are destined to repeat it." 
Method C - Implement a good spend analysis technology so that your procurement team has full visibility to enterprise-wide spending. 
Method D - Systematically perform strategic sourcing and create optimal supplier agreements and supporting ordering platforms for all organizational spending categories. The more we have great programs established, the less our customers will be tempted to bypass the procurement team's partnership.


Many other internal marketing techniques can be applied as well.  But these four are foundational to good customer relationships.


In the early 1990's CAPS Research (the research group affiliated with the Institute for Supply Management [ISM]) conducted a very interesting study called the "4X Relational Procurement Study". This study analyzed four relational elements of procurement management, and clearly documented the fact that inability to "manage" our internal customers will result in compromised supply management effectiveness.


A top-performing procurement group must spend as much time focusing internally as it does externally towards the supplier portfolio.  To do this, the organization must be aligned optimally with internal customer organizations. 


Strategic Procurement Solutions assists many clients in moving their procurement group's involvement way earlier in the process. We do this through our 360o Supply Management Efficiency Reviews, Procurement Transformation Project Support, and Onsite Training Programs. Please contact us at for information about any of these services. 


About the Author - Mark Trowbridge, CPSM, C.P.M., MCIPS is one of Strategic Procurement Solutions founders. His 28 years in procurement leadership began in the Manufacturing, Airline, and Financial Services sectors...culminating in a role leading three-quarters of the strategic sourcing activities, and all of the contracts management responsibilities, for Bank of America (then, the USA's third most-profitable company). During his final two years with Bank of America, Mark's areas of responsibility delivered a Quarter Billion Dollars in cost reductions. During the last dozen years, Mr. Trowbridge has worked in the consulting field with many leading corporate and governmental clients. His business travels have taken him throughout North America, Europe, the Middle East, Asia, and Malaysia. He is a frequent author on supply management topics, with articles appearing in publications like Supply Chain Management Review, Inside Supply Management, IFPSM's eZine, eSide Supply Management, and Strategic Procurement Solutions' own Best Practices in Supply Management Journal.  Mark's  is among the top 1% Most-Viewed LinkedIn profiles.


"Setting the Stage for a Successful Negotiation"- by Robert Dunn, MBA, C.P.M., Principal

Some of Strategic Procurement Solutions' most-popular onsite and web-based training programs are on the topic of Negotiations.  Our onsite Advanced Procurement Negotiations™ workshop is one of my favorite programs to teach, due to some great class exercises, case studies, and team role-playing exercises.  We've been privileged to present this workshop hundreds of times for corporate and conference groups throughout North America, Europe, Asia, Malaysia, and the middle East...always with satisfaction levels nearing 100%.


One important topic we delve into in this workshop is how to Set the Stage for a successful negotiation. Too often, procurement teams just march into an unprepared conference room to begin a negotiation...when insightful preparation could have made a huge difference in the success of that interaction.


Broadway theatres take extravagant measures to "set the stage" to achieve particular effects. The same effort can improve the results of a procurement negotiation. This article will describe several ways a negotiation event has similarity to a theatrical production:


The Cast - Great actors can make the play. Poor actors can ruin a production. Similarly, negotiations can be optimized by involving the right people. Make sure your negotiating team members are each (A) Empowered to make decisions, (B) Prepared to respond to all negotiation issues, (C) Capable of playing their assigned roles, and (D) Unified in their understanding of the negotiation objectives.   Also, don't have too many actors on stage...only those personnel who are critical to achieving the negotiation objective.


Staging - The location selected for negotiations conveys to the supplier how much their business matters. Don't underestimate the effect of the location. Consider introducing the supplier's negotiating team to your CPO before the negotiations begin...that person can certainly spare 10 minutes in their upscale corner office to "sell" the supplier on how important an opportunity this is for each of your firms. With the "staging" set, then proceed with the negotiations.


The Set - It is recommended that negotiations occur at the buying organization's site. Negotiating at the supplier's location just puts a variety of factors under their control. Access to your computer files/email is more difficult. Private phone conversations with your stakeholders are constrained. Sidebar conversations are restricted. It is recommended that negotiations occur at the buyer's site. If not possible, try a neutral location like a hotel conference room. If you must use the supplier's facility, make sure in advance that you will have flexibility, by discussing your requirements with the host.


Cue Marks - There are two approaches to arranging the participants in a negotiation:


Structured Cues: Arrange both firms' representatives on opposite sides of the conference table, not mixed together. This allows comfortable "sidebar" conversations between your team members, keeps notes & computer screens out of the other party's sight, and prevents accidental sharing of confidential information.


Informal Cues: Sometimes it is desirable to break down formal company lines to emphasize a "solution" finding approach. To do this, consider meeting without a table which divides the participants. For an even greater effect, consider intermixing the teams to remove an "us" and "them" mentality (remember though to keep your meeting tools out of the other party's sight).


Regardless of which approach is used, the primary negotiator should be positioned in a central position. If a table is used, the negotiator should be positioned in the middle (not at either end). This enables them to communicate with their entire team, hear everything said at both ends of the table, and maintain direct eye contact with everyone on the opposing side.


Intermission - If the meeting exceeds two hours, arrange refreshments for the participants (even the toughest attorney becomes human when offered a cookie...). In advance, let everyone know where the "Bio" facilities are located. Tough negotiations can be softened by providing for personal necessities.


The Program - The timing, content, and sequence of negotiations is critical. By controlling the agenda and meeting minutes, with input from all participants, you can influence the content and outcome of the negotiation.


Many other elements in negotiation strategy are taught in our Advanced Procurement Negotiation™ training workshop. This can typically be presented onsite to corporate groups much more cost-effectively than sending your employees to offsite training.   More information can be requested at 


About the Author:  Robert Dunn, MBA, C.P.M. is one of Strategic Procurement Solutions' founders.  His 37 years in procurement leadership covered management positions in the Government, Technology and Financial Services sectors; culminating in a role directing all of BankAmerica Corporation's procurement operations.  He has served as President of two ISM/NAPM affiliates, and taught supply chain management at the post-graduate level for California State University - Hayward and St. Mary's College - San Francisco.  He has also worked with major corporate and governmental clients in the consulting industry for the past 18 years, and was one of the founders of Strategic Procurement Solutions.   Robert has worked on major procurement initiatives in North America, Latin America, Europe, and Asia.  He is a noted author, with recent articles in eSide Supply Management and Strategic Procurement Solutions' own Best Practices in Supply Management Journal (the latter of which is now distributed to over 13,000 readers).

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Strategic Procurement Solutions, LLC - All Rights Reserved