Daily Archives: April 18, 2011

What Can The Right Supply Chain Transformation Do For You?

There’s a two-fold reason one of the top themes for SI this year is Next Generation Sourcing and a reason SI has spent posts (upon posts) discussing CAPS Value Focussed Supply, Tompkins Associates’ Supply Chain Value Creation Framework, BravoSolution’s High Definition Sourcing, Purchasing Practice’s Innovation Framework, The MPower Group’s Next Practices, and, shortly, Greybeard Advisors’ Next Level Supply Management. Not only is your supply chain not likely to survive the prolonged global economic recession and “jobless recovery” without it, but it’s going to mean the difference between survival and smashing success.

As proof, I point you to The Lessons from Dell’s Supply Chain Transformation, a recent videocast and article over on Supply Chain Digest.

While Dell’s investor relations group edited out some of the more detailed metrics that resulted from their recent supply chain transformation, the ones that stayed were extremely compelling.

  • 300% reduction in forecast error
  • 30% freight cost reduction
  • 30% manufacturing cost reduction
  • 37% improvement in product availability
  • 33% improvement in order delivery times

That’s more-or-less a 30% improvement across the board! All you have to do is implement best practices and, most importantly, listen to the voice of the customer at each stage. (And yes, it’s often easier said than done, but those returns are worth the effort.)

Common Negotiation Ploys: Some Basic Counter-Tactics

In Common Negotiation Ploys, we discussed that while while your goal as a procurement and contract professional is to get the best deal you can, the sales people at each and every vendor that you deal with have the same goal. And while you’re splitting your time between determining internal customer requirements, writing RFXs, negotiating contracts, managing contracts, and educating and managing your internal customers, your sales counterparts get 100% of their time dedicated to sales — and they’re spending all of that time trying to figure out ways to get more money from you.

We also discussed how your average sales professional has a dozen ploys ready to go before they even contact their first customer, (because they get weeks of training before they’re let out into the field while you get a 2-hour crash course in negotiations, if you’re lucky) and defined 16 common ploys that a salesperson might use to take you for a ride.

Today we’re going to discuss three of these tactics, how you spot them, and some basic counter-tactics you can use to stop them dead in their tracks.


The vendor calls you up and says they’re in your neighbourhood and can meet now or just shows up at the reception desk. The goal is to catch you off-guard and unprepared so they can soften you up for another ploy down the road.

This ploy is easy to spot even in the early stages when the vendor makes a point of only calling at lunch or at the end of the day when you are most likely to be at your desk and not in a meeting or, even worse, just shows up at your office.

Countering is easy. Don’t take calls at lunch or at quitting time unless it is from a known number and its important that you take the call. If the vendor representative calls and says they’re in town, thank them for the offer but explain that you’re too busy to meet now, and if they show up unannounced, explain that you can’t meet today because of other commitments (and if reception escorts them to your office, have security escort them back to the door if need be).


The vendor tries to determine what you want to pay and what you’re willing to pay in an effort to work you to the top of the “acceptable” range.

This is a little harder to spot because a good salesperson will never come out and ask what you’re willing to pay, but, over time, and many conversations, will ask innacuous questions that will allow them to create a range. For example, they’ll say “I bet the competition doesn’t charge any less than ABC” and then at a later time say “I could provide a high quality service for XYZ“, ABC << XYZ and if you didn’t refute the ABC, they know they can charge at least that, and if you didn’t tell them to outright jump off a pier at XYZ, they have a starting range.

The counter-tactic is to respond in non-committal and uninformative ways. “I’m not sure what my customer is paying now.” Or “I don’t know what this other vendor charges or if I could release that information“. Or “I’d have to check into that“. Or respond with a question of your own by asking if they could meet a considerably lower price.


The vendor attempts to misdirect you, your line of questioning, or attention away from a shortcoming or issue so that you only hear what the vendor wants to say.

Unless the misdirection takes the form of silence in response to your question, this can be very hard to sport because it can take the form of misleading statements, incomplete facts, or a number of other tricks innocuously injected into the conversation to lead you away from a dirty little secret the vendor doesn’t want you to know.

Your only chance to identify this is to look for verbal cues such as “this is only our test environment“, “that’s going to be in our next version“, or “I’ll get back to you” and your only chance to counter it is to dive deep on critical topics with counter questions such as “what do these numbers mean“, “how many users can this type of environment support“, or “what’s the defect rate of this part in production” and ask again and again until you get a clear answer to the question you’re looking for. If you can’t, and your gut says the vendor can’t deliver, your gut is, in all likelihood, right.

These are just the tip of the iceberg. For a deeper discussion of these ploys and their counter-tactics, as well as thirteen other ploys that an unscrupulous vendor representative might try to use on you, I’d recommend picking up a copy of Stephen Guth’s Contract Negotiation Handbook — it’s an eye-opener!