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MODULE n. Purchasing Organisation and Strategy LECTURER Giovanni Atti LECTURE TITLE Economic and Technical Aspects of the Negotiation in private procurement To recognize that the value added of the negotiation may apply to various steps of the buying/selling process and that it occurs both at intra company and cross-company levels. To understand that the negotiation strategy, and goals have to be aligned with the type of relationship one wishes to develop with his supplier. OBJECTIVES To realize that the negotiation of critical supplies and long-term agreements involves experts of various functions (negotiation team). To understand the importance of the preparation and planning phases, and specifically the definition of the issues to be negotiated together with the relevant targets. To learn that the number and type of issues to be negotiated depend on the importance/criticality of the supply, and the competitiveness and risks of the relevant supply markets. To understand when the buying process has to include the traditional face-to-face buyer-supplier negotiation, and when it is not worthwhile. To understand the importance of the communication network between the buying and selling team. Contents of the programme DESCRIPTION CLASS MATERIAL Concept and characteristics of purchasing and supply management Structure of the buying process Phases of the buying process (contract management) in private procurement and list of those that could ensure value added if properly managed Definition of the issues to be negotiated and setting the relevant targets Common mistakes to be avoided Definition of negotiation Internal and external negotiation phase Ways to manage the negotiation phase in private procurement Principles inspiring the private Buying Process The importance of cross-functional and cross-company synergies Comparisons between private and public procurement Key procedures in private and public procurement Importance of the compliance in the contract execution The law of supply and demand and the formation of prices in “perfect competition” markets The formation of prices in the real world (language of modern economics) The buying center and the communication network Gross Margin: how much buyers are available to pay and sellers charge Award criteria for contracts Variables impacting the outcome of the negotiation Relationship between Product Classification and content of the relevant contract. Example of contract clauses Two Power Point Presentations