Purchasing

Management
Specialist Day 1

Learning Outcome
▪ Some of your achievements will include;
▪ Ability to achieve 80 percent accuracy in Procurement and
Purchasing management structure
▪ Learn how to leverage on Procurement and Purchasing
Management processes and cut down on cost of office
management and achieve 15 percent annual cost reduction
▪ Understand Project Appraisal resources to accurately
forecast operational cost, thus achieving your corporate
target in the first 12months of implementation
▪ Discover top strategies to reducing cost of operation and
increasing your organization annual profit by at least 10
percent in the very first year of its application
▪ Procurement and Purchasing management best practices

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 Understand end-to-end procurement
lifecycle

Organizing your department

▪ For you to successfully organize a Procurement and
Purchasing function for the purpose of meeting your
demands and satisfying your clients, you would have to
come up with a detailed and well structured plan.
▪ This plan has to address several areas of your function
and must be done having all stake holders in mind.
▪ As the Head of Procurement &Purchasing, state how you
would organize or re-organize your department to
deliver 25% increase in productivity.

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 Purchasing and Procurement
Management
▪ Though there are often misinterpreted as the same.
However, there are not.

▪ Procurement is a related way of buying goods and

services in order to carry out a task for the purpose
of doing a job with a specific budget, time and
quality.

▪ Purchasing is the process of buying goods and

services for the carrying out of daily operations.

Maximizing Vendor Performance

Organizations are increasingly dependent on external vendors and
suppliers to enable the effective delivery of Procurement services.
However, most companies don’t manage vendor performance, resulting
in service degradation over time. The relationship between your
organization and its Procurement vendors plays a key role in ensuring
overall enterprise success. Increasing the level of performance from your
suppliers through effective vendor management extends your
capabilities and has a positive impact on your organization’s bottom line.
• This solution set provides practical guidance to mid and large-sized
organizations for managing the portfolio of vendors to achieve maximum
performance from suppliers of products, projects, services, and support.

• Procurement leaders and managers in small organizations who are

responsible for dealing directly with vendors will learn the nuances of
managing vendor relationships and how to motivate vendors to higher
levels of performance.

• The advice in this solution set will enable you to manage your vendor
portfolio and maximize vendor performance through:

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 Procurement Chain:

Sourcing
REQ Receipt and Opening
(Potential Suppliers)

Bidding

Review By
Evaluation of Offers
Contracts
Committee
Approval by CPO Create Vendor Award Contract/PO Vendor

Types of Procurement methods

▪ P2P
▪ Centralized Procurement and Purchasing
▪ Decentralized Procurement and Purchasing
▪ Whole Life Procurement and Purchasing
▪ MEAT

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 P2P-Procurement to Pay
▪ The procure-to-pay systems enable the integration of procurement
department with account payables department. Some of the
largest players of the software industry such as Oracle, SAP, ARIBA,
B-PACK or Ivalua agree on a common definition of procure-to-pay,
linking the procurement process and financial department. These
steps are included in this definition:
• Supply management
• Cart or requisition
• Purchase order
• Receiving
• Invoice reconciliation
• Accounts payable
• Unlike purchase-to-pay systems, procure-to-pay systems do not
include the function of sourcing.

Centralized Procurement

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 Centralized Procurement-Explained
▪ A procurement system in which all the departments
of a company with a wide geographical distribution
can make procurement through a common
procurement organization. Centralized
procurement aids finding the best deals with
local vendors for the corresponding location of the
company department. Avoids duplicity of order
and promotes benefits arising from
the high volume bulk discounts, lower transportation
and inventory
management costs, organized transactions and
improved vendor relationships. Usually located at
company headquarters.

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Decentralized Procurement

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 Decentralized Procurement-
Explained
▪ Decentralized procurement delegates the buying
responsibility to regional offices. In this way their
scattered divisions have relative autonomy.

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Whole life Procurement

Perform a Total Cost Analysis (TCA)

A knowledgeable manager understands the difference

between cost & price. The two terms sound similar but
actually have very different meanings. Price is the initial
investment necessary to acquire an asset. Cost
however, includes not just the initial investment but all
other costs associated with owning that asset; for
instance, utility and maintenance costs.

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 The LCC of Procurement
(Procurement per time)
Perform a Life Cycle Costing (LCC) analysis
A Life Cycle Costing (LCA) Analysis is similar to the
TCA except it utilizes the “time value of money”
concept which is commonly used by accounting and
procurement professionals.

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MEAT
Most economically advantageous tender

▪ The most economically advantageous tender (MEAT) criterion

enables the contracting authority to take account of criteria that
reflect qualitative, technical and sustainable aspects of the tender
submission as well as price when reaching an award decision.

▪ As early as possible in the process, preferably when the requirement

is advertised in the Official Journal of your company, the criteria will
be published and advised to the potential tenderers. The relative
weighting of each criterion used to assess the submissions must be
stated or, where this is not possible, they should be stated in
descending order of importance. Where the relative weightings
are not stated, the contracting authority will have to provide
reasons justifying failure to provide the weighting information.

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 More Notes
▪ Note: Quite often the award criteria stated in the
contract notice and/or the tender documentation
will be made up of a number of sub-criteria. These
sub-criteria and their weightings should also be
notified to the tenderers - the sub-criteria detail
could probably be provided within the tender
documentation rather than in the contract notice.

▪ Where it is not possible to weight the criteria, they

must be stated in descending order of importance
and an explanation provided of why it has not been
possible to weight them.

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Procurement Cycle
▪ All procurements regardless of their value or
complexity follow a standard sequence of actions.
This is known as the procurement cycle. In practice,
you will complete some of the stages without being
aware of having done so. This is particularly true of
lower value, routine purchases. Think about the
decision processes involved with restocking the
stationery drawer. The user simply decides what and
how many of the stationery Items are needed and
the items are purchased from the nominated
stationery supplier perhaps using the departmental
procurement card. The time spend on the decision
process is minimal.

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 The stages in the procurement cycle
1. Requirement to Purchase
2. Plan the Process
3. Prepare the documentation
4. Identify possible suppliers
5. Issue/Receive back the tender/quotation documentation
6. Evaluate the submissions
7. Negotiate
8. Award and place the contract
9. Delivery
[Link] the supplier
[Link] and monitor the contract
[Link] the process

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Procurement Project Appraisal and

Analysis
▪ Project analysis may be defined as the compilation.
Processing and critical analysis of a set of data-
economic financial technical etc, intended to clarify
one or several aspects of the terms, benefits and
viability of a proposed investments this is with a view
to determine whether its overall economy
advantages or disadvantages justify the
commitment and allocation of scarce resources.

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 Methods of Procurement project
appraisal
Traditional methods:

(a) Payback period (PP)

(b) accounting rate of return (ARR)

(c) The peak profit

(d) average profit (AP)

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The Modern Method

Discounted cash flow method

(a) Internal rate of return (IRR)

(b) Net present Value (NPV)

(c) Profitability Index

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 Pay Back Period
▪ The payback period method of project appraisal
is one of the simplest techniques and widely used
in industry.

▪ Procurement is defined as the length of time (i.e.

number of year) form the beginning of the
project the act benefits return the cost of capital
investment.

▪ That is the period at which the profits are big

enough to repay the amount invested with a
chosen number of years.

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Example
A project requires an initial investment of N20,000.00 it
is
expected to generate annual cash flow of:
▪ 1 year-8,000
▪ 2nd year-7,000
▪ 3rd year-4,000
▪ 4th year-3,000

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 Calculate the payback period
Solution:
▪ From 1 year to 3rd year = (8,000 + 4,000 +7,000)=
N19,000.00
▪ The balance of N1,000 in the 4th year = 1,000 x 12
3,000 x 1= 4 months
▪ Therefore payback period = 3 years 4 months

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Cont’d
▪ These methods express the level of profit in the last
year and express it as rate of return on the sum
invested.
▪ Project A. PP 100,000/200,000 x100%=50%
▪ Project B, PP 100,000/200,000x100%= 50%
▪ project C, PP 120,000 /200,000 x100%=60%
▪ Project D, PP 120,000/200,000 x 100%=60%

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 Cont’d
Year Cash flow Discounting Present Value(N)
factor 10% of cash flow
0 25, 000 25,000
1 90, 000 0.900 8, 181.00
2 8, 000 0.826 6, 608.000
3 7, 000 0.751 5, 257. 00
4 6, 000 0.683 4, 098. 00
5 5, 000 0.621 3, 100. 00
27, 244. 00
Less investment 25, 000. 00
outlay
NPV 2, 244. 00

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Example of LCC in the whole life procurement

▪ LCC is the total cost involved in maintaining a facility
through out its life cycle
▪ Life cycle Cost Management for a Power Generator
▪ Generator Type: 100KVA
▪ Hour running per year:1500hrs
▪ Hours to be serviced: Every 250hrs
▪ Number of times to be serviced: 6times
▪ Cost of generator: N6,000,000
▪ Cost of installation: N400,000
▪ Cost of maintenance: 10% of cost of purchase
▪ Expected life span: 5years
Note:
Expected useful life span(75%)+ Remaining useful life span (12%) + Scrap (13%)=
Total life span

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 LCCM determination for Power Generators
▪ ELS= 40% drop in quality and increase in cost
▪ RLS=A further 40% drop in quality(Fairly used)
▪ Scrap= A further 20% drop in quality
▪ Note: Quality in unavoidable continue to drop, while
cost will unavoidably continue to climb(So why keep the
old man?)

▪ Calculation example for the 100kva Power generator

▪ Note : This is an effective way of predicting the cost of

your unplanned Maintenance. Thus guarding against
unexpected failure and reducing your Failure of loosing
money in the business

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Life Cycle cost Analysis for small size

generator
Initial Annual 1 2 3 4 5 6 7 8 9 10
cost cost
Purchas 8,000 Labour 800 800 800 800 800 800 800 800 800 800
e
Installati 2,000 Material 200 200 200 200 200 200 200 200 200 200
on s
Other

Subtotal 10,000 1,000 1,000 1,000 1,000 1,000 1,000 1,000 1,000 1,000 1,000

Total 20,000
cost

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 Purchasing
Management
Specialist Day 2

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• Develop sourcing strategies aligned with business goals

•Manage procurement risks and compliance

•Build and evaluate supplier partnerships

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 BUILD AND EVALUATE SUPPLIER
PARTNERSHIPS
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STAKEHOLDER MANAGEMENT

▪ Stakeholder Management is an important discipline

that successful people use to win support from
others. It helps them ensure that their procurement
succeed where others fail

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 Who a Stakeholder is?

Stakeholders
Individuals and groups with a multitude of interests,
expectations, and demands as to what business
should provide to society

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Origins of the Stakeholder

Concept
What is a stake?
An interest or a share in an undertaking and
can be categorized as:
Interest Right Ownership

Legal

Moral

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 Key Questions In Stakeholder
Management

Who are our stakeholders?

You must identify generic stakeholder
groups and specific subgroups

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Procurement Stakeholder Mapping

Types of Stakeholders
Stakeholder’s Potential for Threat to Organization
High Low

Stakeholder Type 4 Stakeholder Type 1

High Mixed Blessing Supportive
Strategy: Strategy:
Stakeholder’s Collaborate ? Involve
Potential for
Cooperation
With Organization Stakeholder Type 3 Stakeholder Type 2
Nonsupportive Marginal
Low
Strategy: Strategy:
Defend Monitor

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 High

Keep Satisfied Manage Closely

Power
Low

Monitor Keep informed

Low Interest High

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High

Power
Low

Low Interest High

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 DEVELOP SOURCING
STRATEGIES ALIGNED WITH
BUSINESS GOALS
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Procurement Sourcing Management

Planning
▪ We would need to run a strategic procurement
Sourcing planning session for the project that we
would be procuring goods and services for.
Therefore we would need to develop a
procurement plan to this regards.

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 Using Procurement elements To Develop Your
sourcing Plan
• Supply Chain Design
Strategic
• Resource Acquisition
Procuremention
• Long Term Planning (1 Year
++)
• Procurement and Purchasing Planning
Tactical • Resource Allocation
• Medium Term Planning (Qtrly,
Monthly)
• Procurement and Purchasing
Scheduling
Operational
• Resource Scheduling
• Short Term Planning (Weekly,
Daily)
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S.W.O.T Based strategy

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 Budget development structuring
▪ This financial method is designed to provide
proper details and mapping to the financial
implications of your plans

▪ It will help keep you from over

budgeting or under budgeting
for the 3 levels of Procurement
management plan.

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Manage procurement risks and

compliance

▪ Risk is part of the procurement environment

▪ It involves systematic identification, analysis,
treatment and where appropriate accepting the
risks
▪ Agreements to limit a supplier’s liability to the
company and third party (Indemnity. Guarantee,
warranty)
▪ The risks involved has to be assessed from all
levels of procurement and not from just a
specific point of view alone

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 Procurement Risk Management levels

Write Prepare
Specifications Solicitation
TOR and SOW Documents
Identify Needs Choose a
Procurement Method

Seek, Clarify
Award Contract and Close
Offers

Evaluate Offers

Manage the
Contract

Negotiate the Contract

47 Evaluate the Procurement

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Risk Management
▪ Key to effective and efficient delivery
▪ This should be integrated in day to day management
▪ More important when we are moving from “arms length”
to “partnering”
▪ Typical Risk factors: Buyer risk factors, Supplier Risk
Factors, Contractual relationship risk factors, External risk
factors
▪ Tools and techniques for managing risks: (Risks, Likely
consequences, what to do)
• Identifying the need
• Developing the specifications
• Contract documents

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 Risk: Identifying Needs
Risk Cost Delivery Ethics
Overstatement of V V N
Needs.
Understatement of V V N
Needs.
Insufficient Funding. V V N

Impractical Timeframe V V N
for Supply.

No Available Solution. V V N

Fraud. V V M

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Risk: Writing Requisitions

Areas of Consequence
Risk Cost Delivery Ethics
Narrow/ Biased V V M
Specifications

Definition of V V N
Inappropriate Product.

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 Risk: Solicitation Documents
Risk Cost Delivery Ethics
Terms and Conditions V V V
Unacceptable to
Suppliers.
Uncertainty amongst V V V
Contracts due to
Conditions of Contract.
Provision of Inadequate V V V
Information.
Biased Requirements. V V V
Inadequate V V V
Requirements.

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Risk: Procurement Method

Risk Cost Delivery Ethics

Failure to Identify M V V
Potential Sources.
Lack of Market M V V
Research.
Supplier Monopoly. M V V

Selection of M V V
Inappropriate Method.

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 Risk: Seek, Clarify and Close Offers
Risk Cost Delivery Ethics

Failure to Adequately N M V
Address Suppliers’
Inquiries.
Actual or Perceived N M V
Favoritism in Providing
Information.

Breach of N M V
Confidentiality.

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Risk: Evaluation of Offers

Risk Cost Delivery Ethics

Failure to Observe V V V
Effective Evaluation
Procedures.
Breach of V V V
Confidentiality.

Failure of Offers to meet V V V

Needs.
Failure of Evaluation to V V V
Identify a Clear Winner.

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 Risk: Award of Contract
Risk Cost Delivery Ethics
Selection of V V V
Inappropriate Supplier.

Selection on V V V
Inappropriate Product.

Insufficient Number of V V V
Responses.
No Response from V V V
Known High-Quality
Suppliers.

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Risk: Negotiate the Contract

Risk Cost Delivery Ethics
Unmatched Expectations of V V V
Buyer and Supplier.
Deadlock on Agreement. V V V
Undue Concession to Suppliers. V V V
Failure to Accommodate V V V
Standard Conditions.
Grossly Unfair or Onerous V V V
Requirements.
Failure to Reflect the Terms V V V
Offered and Agreed in the
Contract.
Inadvertently Creating a V V V
Contract without Proper
Approvals.
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 Risk: Evaluate the Procurement

Risk Cost Delivery Ethics

Failure to Assess Supplier’s N N V
Performance.
Failure to Assess the Process. N N V
Loss or Damage of Goods in N N V
Transit.
Fraud. N N V

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Risk: Managing the Contract

Risk Cost Delivery Ethics
Variations in Price and Currency V V V
Fluctuation.
Unwillingness of Supplier to V V V
Accept the Contract.
Failure of Either Party to Fulfill the V V V
Contract.
Inadequate Administration of V V V
Contract.
Acceptance Before Completion. V V V
Increase in Scope of Work. V V V

Intellectual Property. V V V
Third Party Liability.

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 DAY 3

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Bargaining & Negotiation Workshop

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Course Objectives

At the end of this course, you will be able to:

▪ Know your own negotiation style, your strengths and

weaknesses, and improving your personal effectiveness in
complex negotiations - through self-assessment, peer
feedback and guidance from the experienced faculty.
▪ Understand the person at the other side of the negotiation
table, then knowing how to adapt your negotiation strategy to
get the best outcome.
▪ Apply frameworks and developing proven tools for analyzing
negotiations, creating the highest value for your business.

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 Understanding Negotiation and Negotiation
tactics

Bargaining & Negotiation Workshop

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What Negotiation is?

• Negotiation is a dialogue between two or more parties

to resolve points of difference, gain an advantage for
an individual or collective, or craft outcomes to satisfy
various interests. The parties aspire to agree on matters
of mutual interest. The agreement can be beneficial for
all or some of the parties involved.

Bargaining & Negotiation Workshop

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 UNDERSTANDING NEGOTIATION

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Bargaining & Negotiation Workshop

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Module 1:
Developing Negotiation strategies

Bargaining & Negotiation Workshop

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 Bargaining & Negotiation Workshop

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Understanding your personality

[Link]

Importance and benefits to sales Negotiators in developing

negotiation strategies

Bargaining & Negotiation Workshop

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 Understanding Negotiation

Negotiation Defined

▪ To “Negotiate” is to arrange or settle by conferring or discussing;

or to use information and/or power to affect human behavior in
an environment filled with multiple issues and tensions.

▪ Negotiation: A process by which two or more people come to

agreement on how to allocate scarce resources.
▪ Parties are interdependent; neither has complete power to choose
▪ The process is a decision, not a contest of wills

 Procurement Negotiation

 Purchasing Negotiation

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CLASS EXERCISE- NEGOTIATION AND RAPPORT BUILDING

Learning Resource 1 : Why is it important to build rapport in negotiation?

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 Bargaining & Negotiation Workshop

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CLASS EXERCISE- NEGOTIATION TIME MANAGEMENT

Learning Resource 1 : Are you a talented or Skillful Negotiator?

▪Provide a List of difficult customers

▪Provide a Need List of your most critical goods or services
▪Thus, categorize your customers based on their need rate (1-5)
▪Organize your Negotiation time

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 CLASS EXERCISE

Learning Resource 2 : Being a diehard GO GETTER Negotiator

To become a "go-getter" sales negotiator,

focus on cultivating a proactive, driven
attitude, mastering sales techniques,
developing strong communication skills,
understanding your market deeply, building
rapport with clients, and consistently
exceeding sales targets by actively seeking
out opportunities and persistently pursuing
leads until closure.

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 DEVELOPING EMOTIONAL INTELLIGENCE

W [Link]

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HOW MANY BRAINS HAVE YOU GOT TO NEGOTIATE WITH???

W [Link]

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In negotiation, "left brain thinking"
refers to a more analytical and
logical approach, focusing on facts,
data, and structured reasoning,
while "right brain thinking" leans
towards creativity, intuition, and
understanding the emotional
aspects of the negotiation, with the
ideal negotiator utilizing both sides
effectively to reach a mutually
beneficial agreement.

Bargaining & Negotiation Workshop

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Bargaining & Negotiation Workshop

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 Key points about left and right brain thinking in negotiation:
•Left Brain (Analytical):
•Strengths: Precise calculations, clear logic, identifying key details, strong
arguments, objective evaluation of options.
•In Negotiation: Developing a strong bargaining position, identifying leverage
points, analyzing counteroffers, structuring deals with clear terms.

•Right Brain (Creative):

•Strengths: Recognizing patterns, generating new ideas, understanding

emotional nuances, building rapport, adapting to unexpected situations.
•In Negotiation: Finding creative solutions, exploring alternative options,
reading body language, building trust and rapport with the other party.

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Important Considerations:

•Myth of pure dominance:

How to use both sides effectively: •While some people may naturally lean towards one
side, most effective negotiators utilize both left and
•Prepare with left-brain analysis: right brain functions.
•Thoroughly research the situation, understand •Context matters:
market trends, and set clear goals before entering the
negotiation. •Certain negotiation situations may require more
analytical thinking (e.g., complex contract terms)
•Engage right-brain during the negotiation: while others may benefit from a more creative
approach (e.g., brainstorming innovative solutions).
•Actively listen to the other party's needs and
concerns, use empathy to build trust, and be open to •Self-awareness is key:
new ideas.
•Understanding your own strengths and weaknesses
•Be flexible:
in each area allows you to strategically leverage both
sides of your brain during negotiation.
•Switch between analytical and creative thinking
depending on the situation, adapting to changing
dynamics in the negotiation.

Bargaining & Negotiation Workshop

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 Understanding
negotiation strategies

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Fundamental Concepts in Negotiation

Deal Breaker (Negotiation Strategies)

▪ Before you even begin preparing your negotiation strategy and

gathering information, prepare your mindset. Go into the
negotiation with a “win-win” approach; the goal of your
negotiation should be to arrive at a solution that meets both your
organization's needs and those of your supplier.
▪ There are five steps to the negotiation process, which are:
▪ Preparation and planning.
▪ Definition of ground rules.
▪ Clarification and justification.
▪ Bargaining and problem solving.
▪ Closure and implementation.

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UPSTREAM AND DOWNSTREAM NEGOTIATION STRATEGIES

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 BUSINESS ANALYSIS
NEGOTIATION FRAMEWORKS & DIMENSIONAL NETWORKING

Tier 3 to Tier 3 to
Initial Consumers/
Suppliers Tier 2 Tier 2 End-Customers
Suppliers Customers

1 Tier 1 Tier 1 1
Suppliers Customers
2 2

Consumers/End-customers
n n
1 1
1
Initial Suppliers

n 1
2 2
n
1

2 3 n
1
3
2
n n
n

Focal Company Members of the Focal Company’s Supply Chain

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Module 2: Negotiation planning

Bargaining & Negotiation Workshop

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 Fundamental Concepts in Negotiation

Negotiation Plan

▪ The negotiation plan should explain the general purpose and

scope of the negotiations, the proposed outcome of the
negotiations (e.g. reduce cost by 25% compared to typical
procurement methods), the anticipated schedule for the
negotiations; and the procedures to be followed for those
negotiations. Developing the factors and threshold are essential
to successfully negotiating when you have not received a
responsive bid. The categories may include, but are not limited to:
Sales Management Plan, Sales Reporting, Sales Change
Management, Hardware and Software Change Management,
Quality Management, Data Conversion, Interfaces, Testing, Help
Desk Services, Reporting, Staffing and Organization, Training,

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CLASS EXERCISE

Learning Resource 4 : What other elements should a great negotiation plan have?

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 Here, we overview the seven elements
▪ Interests. Interests are “the fundamental drivers of
negotiation,” according to Patton—our basic needs,
wants, and motivations. ...
▪ Legitimacy. ...
▪ Relationships. ...
▪ Alternatives and BATNA. ...
▪ Options. ...
▪ Commitments. ...
▪ Communication.

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Planning and Setting up

the negotiation team

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▪ Issues and negotiating positions

▪ Managing relationships

▪ Expected outcomes and consequences

Bargaining & Negotiation Workshop

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 Understanding Negotiation issues and positions

Barriers to Successful Negotiations (Do not negotiate contracts you do not understand)

▪ CPFF- Cost Plus Fixed Fee

▪ CPIF- Cost Plus Incentive Fee
▪ FPIF- Fixed Price Incentive Fee
▪ FFP- Firm Fixed Price (Lump Sum)
▪ FPEPA- Firm Price Economic Price Adjustment
▪ Cost Reimbursable
▪ Lump Sum
▪ Multiple Cost Fee contract

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Module 3: Negotiation
techniques toolbox

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 Simulating power dynamics

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Bargaining & Negotiation Workshop

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Simulating power dynamics

Best Alternative to a Negotiated Agreement- BATNA

▪ This refers to the course of action that will be taken by a party

engaged in negotiations if the talks fail and no agreement can
be reached.

▪ The term BATNA was coined by negotiation researchers Roger

Fisher and William Ury in their 1981 bestseller "Getting to Yes:
Negotiating Agreement Without Giving In."

▪ A party's BATNA refers to what they can fall back on if a

negotiation proves unsuccessful.

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 Simulating power dynamics

Best Alternative to a Negotiated Agreement- BATNA

▪ A BATNA is not interested in the objectives of a negotiation, but

rather to determine the course of action if an agreement is not
reached within a certain time frame.
▪ When creating a BATNA, a negotiator should:
▪ Brainstorm a list of all available alternatives to consider should the
negotiation fail to render a favorable agreement;
▪ Choose the most promising alternatives and expand them into
practical and attainable alternatives; and
▪ Identify the best of the alternatives and keep it in reserve as a fall-
back during the negotiation.

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Simulating power dynamics

Worst Alternative to a Negotiated Agreement- WATNA

▪ In a negotiation, your WATNA represents one of several paths that

you can follow if a resolution cannot be reached.

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 HOW DO WE DETERMINE OUR BEST AND
WORST NEGOTIATION OUTCOMES?

By first determining our Strengths regards factors that gives us

advantage over the customers regarding the negotiation
objective
• Factors that provides Weakness against the customer
regards the objective of the negotiation
• Factors that provides Opportunities
• Factors that provides Threats regards the objective of the
negotiation with the customers.

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NEGOTIATION STYLES BY NATURE

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Bargaining & Negotiation Workshop

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Negotiation

Inter-person
Intra-person Negotiation
Negotiation

Unplanned Planned
Negotiation Negotiation

Integrative Distributive
Negotiation Negotiation

Hard Soft Principled

Negotiation Negotiation Negotiation
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 Purchasing
Management
Specialist Day 4

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Use analytics for procurement decision-making

•Leverage digital tools for smart procurement

•Ensure sustainable and ethical purchasing

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105

What is the biggest challenges in

data management in Nigeria?

106

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53
 Data Management
▪ Data collection

▪ Data Entry

▪ Data Extraction

▪ Data Analysis

▪ Data Analytics

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Data Entry for Buying Analytics

▪ Data entry is the process of inputting data into a
computer system or database. It can involve typing,
scanning, or voice recording. Data entry is used to
collect, manage, and store information for a business.

What does data entry involve?

▪ Transcribing notes from meetings or calls
▪ Uploading customer information from paper records
▪ Entering expenses into financial software
▪ Adding sales figures into electronic formats
▪ Creating spreadsheets with large numbers of figures
▪ Updating outdated information
▪ Comparing new data sets to the original figures 108

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54
 Who does data entry?
▪ Data entry clerks
▪ Data entry specialists
▪ Transcribers
▪ Coders
▪ Typists
▪ Word processors
What skills are needed for data entry?
▪ Typing speed and accuracy
▪ Communication skills
▪ Time management
▪ Attention to detail
▪ Ability to research and collect data
▪ Understanding of basic software
▪ Self-motivation 109

109

Manual and Automated Data Management

▪ Manual data management involves entering data

by hand, while automated data management uses
technology to capture and enter data.

▪ Which method is better for Retail Buying Analytics?

▪ How do you see yourself applying your buying skills

either of this methods to make your retail buying
operations effective?

110

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55
 111

111

Where both methods come to merge

112

112

56
 Understanding Business Analytics

1
1
3

113

114

57
115

Having a harmonized buying analytics System

BAIntegrated Management System BAIMS

116

58
 Your job is not limited to just buying. More than this is
required of your service. Efficient Buying Analytics,
however, must result in tangible business improvements
in the workplace. It is characterized by a sharp focus on
• Revenue growth
• Better asset utilization
• Cost reduction
• Cost savings
• Creation of more branches nationwide
• Inventory management per store

117

Analytics vs Predictive/Opinion based Buying

118

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59
 The fundamental of buying
Analytics system
What are the fundamentals of buying Analytics?

▪ The six fundamentals of buying Analytics are;

• Identify customer need. Identifying stakeholder or
customer need, and separating it from what the
customer wants, is crucial, said Sparkes. ...
• Look outside your market. ...
• Prioritize relationships. ...
• Collect spend data. ...
• Communicate what you are doing. ...
• Know your negotiating position.
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119

Descriptive Business Analytics models

These models leverage data to provide valuable

insights, optimize decision-making, and enhance
overall business performance.

120

60
 Understanding the buying
patterns of end users

121

121

Understanding the buying

patterns of end users

122

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61
 The 4 Types of Buying Behaviour pattern

▪ What are the 4 types of customer buying behavior?

▪ There are four types of consumer behavior:

1. Habitual buying behavior

2. Variety-seeking behavior
3. Dissonance-reducing buying behavior
4. Complex buying behavior

123

123

124

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62
 Understanding Business Intelligence

Business intelligence (BI) is a

technology-driven process for

evaluating data and delivering
actionable information to leaders,
managers, and employees to help them
make better business decisions.

The phrase "business

intelligence" is also used to
describe a set of
technologies that deliver
quick, easy-to- understand
information about a
company's present situation
based on available data.
1
2
5

125

Understanding Business Intelligence

Basis for comparison Business Intelligence Business Analytics

Analyses past and present data to Analyses past data to meet your
Definition meet your business needs current business needs

To change business operations

Usage To run business operations
and improve
productivity
Ease of Operations For current business operations For future business operations

SAP Business Objects, QlikSense, Word processing, Google docs, MS

Tools
TIBCO, etc., Visio, MS Office Tools, etc.
Apply to all large-scale companies Applies to companies where future
Applications
to run current business operations growth and productivity as its goal
Contains Data warehouse,
Field Comes under Business Analytics
information management

1
2
6

126

63
 Data analysis is the process of cleaning,
changing, and processing raw data and
extracting actionable, relevant
information that helps businesses make
informed decisions.

127

128

64
 [Link] Data Analysis
[Link] Data Analysis
[Link] Data analysis

129

Descriptive Data Analysis

Descriptive analytics is the process of using current and historical data to identify trends
and relationships. It's sometimes called the simplest form of data analysis because it
describes trends and relationships but doesn't dig deeper.

130

65
 Prescriptive Data analysis
Prescriptive analytics is the use of advanced processes and tools to analyze data and content to
recommend the optimal course of action or strategy moving forward. Simply put, it seeks to answer the
question, “What should we do?”

131

132

66
What are the three types of analytics techniques used in
banking?

• Descriptive Business Analytics,

• Predictive Business Analytics and
• Prescriptive Business analytics

Business Analytics is the process by which

businesses use statistical methods and
technologies for analyzing data in order to
gain insights and improve their strategic
decision-making.

133

Strategic Business analytics is the process

of transforming data into insights to improve
business decisions. Data management,
data visualization, predictive modeling, data
mining, forecasting simulation, and
optimization are some of the tools used to
create insights from data.

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67
 Website and Mobile App

▪ Transactional tracking

▪ Analytical tracking

▪ Descriptive tracking

▪ Predictive tracking

▪ Prescriptive tracking

135

135

Upstream, in stream and downstream

buying Analytics

136

68
 Extended Decision-Making buying behavior pattern

Tier 3 to Tier 3 to
Initial Tier 2 Tier 1 Tier 1 Tier 2 Consumers/
suppliers Suppliers Suppliers Customers Customers End-Customers

1 1

2 2

Consumers/End-customers
n n
1 1
1
Initial Suppliers

n 1
2 2
n
1

2 3 n
1
3
2
n n
n

Focal Company Members of the Focal Company’s Supply Chain

137

PMIS Vs ERP

Supply Chain Electronic

Management Customers

Manufacturing Customer
Procurement
Service
Distribution
Interactive
Inventory
Marketing
Financials
Integrated Demand
Forecasting HR Forecasting

Quality Order
Systems ERP Management

Suppliers Customers

138

69
 Establish formal Buying Analytics responsibilities & use specialized
tools when your buyer portfolio exceeds 50 customer

Product Price-based Buying pattern

evaluation alone is not evaluation isn't just for
good enough, I need procurement, we
other metrics to have other internal
effectively manage and functions who need
improve buying to be involved!
performance!
Managing customer
buying information
Manually managing with tools like Excel
a large consumer and Word does not
portfolio is too time address my
consuming and requirements for
cumbersome! visibility,
collaboration, and
efficiency!

I need
dashboards
and scorecards
to know on
which
consumers to
focus!
139

139

Limited Decision-Making buying behaviour pattern

140

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 Setting up your forecast model

PREDICTIVE BUYING ANALYTICS

141

141

FORECASTING, SOLUTIONS AND DECISION MAKING

Discussions:

Can we manage demand, or

do we have to be totally
responsive/reactive to their
requirement?

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 Forecasting Methodologies

▪ Qualitative : Doesn’t use historical data especially but

based on judgment, facts, and experiences of those
involved.

▪ Time series: Historical data over a period is the prime

ingredient

▪ Causal: When historical data is not adequate to make a

judgment, causal forecasting based on environmental
issues or economic status is used.

▪ Simulation: creating artificial scenarios that approximate

people behaviors to predict their response to new
situations.

143

Example of forecasting for business

solutions
Let’s consider trying to forecast the number of visitors to TINAPA
next year. What elements would our model contain?

▪ Data from previous years

▪ Flight bookings
▪ Hotel reservation
▪ Exchange rate
▪ How long visitors would be in Nigeria for
▪ Political stability
▪ Exhibition
▪ Trade fair
▪ Weather etc

144

72
 CLASS EXERCISE

FORECASTING

Develop a forecast model for

developing the organizations’
Buying Analytics System for year
2025 regarding the following
products;

• Powdered Milk
• Evaporated Milk
• Rubber Tiers
• Recharge Card
• Pure Water
• Be careful in laying your
Forecast
145 foundation.

145

Setting up your SWOT model

PRESCRIPTIVE
BUYING ANALYTICS
146

146

73
 147

147

Bargaining & Negotiation Workshop

148

74