Negotiation Report with Supplier Risk Analysis
Get the edge in supplier negotiations with Prognos’ negotiation report, including a comprehensive supplier risk analysis. Empower your decision-making in supplier relations and pricing strategies with fact-based arguments to proactively counter unjustified price hikes, driving down procurement costs.
What’s Included in the Negotiation Report?
Should Cost Tracker
The should cost trackers ensure you are informed about key cost changes across main suppliers and products. Prognos experts analyze your product’s cost structure and deliver a customized report, complete with indices for each cost driver, including materials, labor, and transportation costs, equipping your business with insights into cost distribution.
Supplier Risk Analysis
The supplier risk analysis evaluates the financial risk associated with a supplier by examining key financial indicators. We deep dive into the financial health of the supplier, comparing their performance to industry averages and selected competitors, to provide a clear view of where the supplier stands in the market regarding profitability, stability, and other critical financial metrics.
In conjunction with the report, we offer coaching to fully utilize the report and its different parts as effectively as possible in negotiations. We help you prepare fact-based arguments to resist unjustified price hikes and approach negotiations with confidence and solid backing.
Benefits of our Negotiation Report
- Detailed Cost Monitoring: By meticulously tracking specific supplier costs and juxtaposing them with the price developments seen by customers, you gain critical insights into the cost-pricing interplay. This not only ensures a comprehensive understanding of the current financial landscape in comparison with your current supplier’s prices, but also helps in predicting future trends, enabling better budgeting and strategic planning.
- Insights into Supplier Risks: The negotiation report provides a detailed supplier risk analysis that sets the stage for informed decision-making. It is a deep dive into a supplier’s financial stability compared to industry benchmarks and competitors. The comprehensive market overview is invaluable in anticipating potential risks, safeguarding against market volatility, and identifying robust and resilient suppliers.
- Support for Fact-Based Arguments: Equipped with data and insights from the supplier risk analysis and cost trackers, you are better positioned to present strong, fact-based arguments in negotiations. Having a factual foundation for negotiation points not only strengthens your company’s position but also fosters a more transparent and productive negotiation environment.
- Counteract Unwarranted Price Increases: By understanding the cost structure and market dynamic,, you can challenge excessive price hikes with factual evidence. This proactive stance not only prevents overpaying but also signals to suppliers the importance of fair and reasonable pricing practices, contributing to healthier, long-term business relationships.
Supplier risk analysis support with Prognos
- Proven Methodology: Prognos offers a blend of deep expertise and time-tested methods, providing insights and analysis that add value to your strategies.
- Neutral, Fact-Based Arguments: Our unbiased approach ensures strong and fair arguments in your negotiations.
- Customized Index Selection: The should-cost tracker is tailored with the most relevant indexes to meet your specific needs.
- Control and Transparency: Enhance your oversight and clarity in the pricing process, steering clear of unfair practices.
- Confidence in Negotiations: Approach negotiations with the assurance that comes from being equipped with solid facts, rather than relying on guesswork.
Frequently asked questions
What is supplier risk, and why is it important to manage?
Supplier risk refers to potential disruptions from a supplier’s actions or market changes. Managing it is essential to maintain a stable supply chain, ensure consistent quality, and avoid operational disruptions. Effective supplier risk management enables businesses to anticipate and proactively mitigate potential issues, safeguarding against delays or cost overruns.
What role does cost trackers play in supplier risk management?
Cost trackers like the Should Cost Tracker are vital in supplier risk management. They provide detailed breakdowns of costs associated with products or suppliers. This detailed insight into cost structures, including material, labor, and transportation expenses, helps businesses anticipate and respond to price volatility and changes in the supply chain, ensuring more stable and predictable procurement costs.
How often should a business conduct a supplier risk analysis?
Conducting supplier risk analysis at least annually, or more frequently in response to major market or internal changes, is recommended. Regular analysis keeps businesses informed about potential risks and ensures they remain responsive and adaptive to changing market conditions and supplier dynamics.
What are some common challenges in supplier risk management?
Common challenges include adapting to market fluctuations, ensuring supplier reliability, and dealing with unexpected supplier performance issues. Overcoming these challenges involves continuous monitoring, analysis, and proactive supplier risk management strategies to minimize risks and maintain supply chain integrity.
Loved by businesses and individuals across
A few days after I received your model I renegotiated the prices with my main supplier. I received a price reduction of 15%, which wouldn’t be possible without this support.
After our previous supplier wouldn’t adjust their prices according to indications from our models from Prognos, we made the decision to look for a new supplier. The funny thing is that the new prices, after the sourcing project, were exactly in line with what Prognos models suggested. This saved us about 20% within this major category.