How to perform fact-based purchasing negotiation for cost reduction with a supplier?

Fact-based purchasing negotiation

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.


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