Buying during inflationary times

Gain the tools and techniques to implement the practical steps procurement can take to mitigate today’s inflationary pressures in the supply base.

Manage cost charges, learn how to be proactive with suppliers during renegotiation and determine the best cost management approaches across categories.

Aims

The aim is to equip participants with the methods, tools and capability to manage price increase requests from suppliers.

Objectives 

This workshop will enable you to:

• Identify categories that are most vulnerable to price fluctuations
• Apply cost management strategies to each category
• Select the most appropriate cost management approach for the category
• Identify ‘cost drivers’ and monitor leading and lagging indicators
• Develop and negotiate a cost model with suppliers to manage costs collaboratively
• Develop and implement price variation models within their contracts

Who should attend

Anyone who manages spend and is responsible for ensuring that spend is within budget, particularly in a procurement role should attend.

Indicative content

You will gain the practical tools and techniques to be implemented straight away.

Every participant will get a PDF toolkit summarising the content and methods to ‘hardwire’ the lessons learned into practice.

The outline content includes:

1. Develop a cost model for manufacturing, distribution and service businessesthat shows the impact of bought-in goods and services on costs

2. Identify cost drivers and the associated leading and lagging indicators

3. Profile the spend portfolio and ‘hot spot’ the categories that are most susceptible to inflationary pressure

4. Apply a variety of cost management strategies, including:

• Pre-emptive approaches to deter and discourage price rises
• Reactive approaches including collaboration when we do not have market power and methods when we do have market power

5. Explore cost-reduction initiatives that suppliers may adopt and which may fully or partially offset price increases including:

• Overheads and ‘corporate’ spend
• Labour costs
• Bought-in goods and services

6. Distinguish between collaborative and competitive approaches to costs management

7. Develop and implement price variation models within their contracts

Timing

Three mornings online, usually 9am-1pm AET time (Sydney/Melbourne) over 12 contact hours. Note times may vary.

Your trainer

Paul Rogers FCIPS is one of Australia’s leading independent procurement consultants and published author in negotiation. He has almost 40 years experience in procurement development and training work.