378: Collaboration or Competition: Cost Transparency Settles the Debate w/ Rod Sherkin

378: Collaboration or Competition: Cost Transparency Settles the Debate w/ Rod Sherkin

Good negotiation skills are fundamental to procurement. They allow us to maximize value while simultaneously building resilient, low-cost supply chains. But now that procurement is moving towards collaborative partnerships with our suppliers, many are concerned that reducing direct competitive pressure will inadvertently allow higher pricing.

Cost transparency allows procurement to balance collaboration and negotiation. By focusing on the primary material and service cost drivers of what is being negotiated, and using trends and should cost modeling, it is possible - and effective - to have fact-based pricing discussions with suppliers. Procurement can keep their prices in line with supplier costs and preserve the relationship by acknowledging the need to allow them overhead/gross margin and building both into the model.

In this podcast, based on an AOP Live session, Rod Sherkin, Founder and President of ProPurchaser and a former CPO, answers live audience questions about:

  • Whether procurement needs to take their relative size and buying power into consideration when using should cost modeling to manage a spend category
  • If there is an approximate or ballpark overhead margin percentage procurement can use when building a first-pass should cost model
  • How to introduce should cost models with incumbent suppliers where they have not been applied in the past

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Episoder(918)

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876: AI with Purpose: Designing Procurement's Next Chapter W/ Gaël De Martelaere

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875: How to Transform Every Procurement Partnership W/ Kate Vitasek

875: How to Transform Every Procurement Partnership W/ Kate Vitasek

"When you have a great partnership, the value that you can create is unbelievable if you know how to do it." - Kate Vitasek Despite the best intentions, nearly 70% of business partnerships unravel wit...

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EP 11: Provider of the Week: Valdera

EP 11: Provider of the Week: Valdera

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15 Jul 24min

874: Building Resilience Beyond Tier One: Hard Truths About Risk and Visibility W/ Harald Nitschinger

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13 Jul 37min

873: Creating Capacity for Complex Problem Solving W/ Israel Santiesteban

873: Creating Capacity for Complex Problem Solving W/ Israel Santiesteban

"We need to evolve from procurement professionals into business leaders with procurement expertise." - Israel Santiesteban, Former Chief Procurement Officer and Head of Supply Chain The next evolution...

6 Jul 39min

EP 10: Supplier Management as a Connected Discipline W/ Jesse Lee

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"If your business is getting bigger, then supplier management is going to be ever more important to you." - Jesse Lee, Co-founder, CEO of Brooklyn Solutions Procurement's role in managing suppliers is...

1 Jul 31min

872: Beyond Automation: Accelerating Agentic AI Transformation in Procurement W/ Vishal Patel

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29 Jun 28min

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