How to perform fact-based purchasing negotiation for cost reduction with a supplier?
A fact-based vendor negotiation strategy is considered one of the most effective cost reduction strategies available to reduce spend. In this article, we’ll cover how you can leverage a product cost management (PCM) platform such as Prognos to perform fact-based price negotiation with a supplier and how you can successfully use this strategy to obtain significant savings on all your spend.
But before anything else, let’s get down to basics.
What is a PCM platform?
A PCM platform is an intelligent manufacturing cost software that uses a plethora of both global and localized cost inputs to help a company estimate how much the cost of a product should be, the so-called “should-cost”.
A PCM platform such as Prognos gives you all the data, information and insights you need to be able to perform a fact-based supplier negotiation strategy and get the most out of your suppliers. Using a fact-based vendor negotiation strategy will ensure that:
- You will pay a fair price for all your products.
- You will not be overspending for the products.
- Your suppliers will not be losing money.