Purchasing and Negotiation Training

Robert Menard, Certified Purchasing Professional, Certified Professional Purchasing Consultant, Certified Green Purchasing Professional

This post cites the growing popularity of green purchasing education and training courses.  As with other such courses, a free copy of You’re the Buyer – You Negotiate It will apply to all courses listed below.  Just email me or the Society after you order and specify if you want the printed or ebook version.

Green Purchasing and Sustainability – Course 3400

 Here is a brief synopsis.

The two-part self-running course titled “Green Purchasing and Sustainability” demonstrates how sustainability impacts our professions and how purchasing can take an active role in it. It will give practical and reasonable steps that purchasing can take to not only help its company become “greener” but to also do what purchasing does best, reduce costs. As more and more executive decisions include sustainability, buyers and purchasing managers need to learn how they can be part of the process before the policies and procedures are set in place. Sustainability is quickly developing and changing, and the sooner purchasing professionals begin to learn about the subject and current things that they can do to encourage and embrace it, the better position they will be in for the long-term future. Students will be taught what purchasing’s role is in sustainability, how to develop a green purchasing plan, how it can be included in facilities practices, how to utilize the 3Rs, energy savings ideas, and more. Similar to many of our other self-running online courses each part will take approximately 2 to 3 hours to complete. Students will receive a certificate of completion. This course is authored by Robert Menard, CPP, CPPC, CGPP, and CPPM. He is also the author of You’re the Buyer, You Negotiate It and the Society’s two part self-running course “The Science and Art of Negotiation”.

online training in purchasing, negotiation, and sales

Here is a testimonial reference of Torrie Byrd, Purchasing Manager
DNC Parks & Resorts at Yosemite, Inc. 

“I’m ecstatic that you and the American Purchasing Society realize the value of taking sustainability into consideration in the Purchasing role… there’s so much information packed into the materials.  Our company developed a program years ago.  I was a charter member of the original committee which saw the need for Purchasing to be involved in developing the program.”

Here is a testimonial reference of Randy Nice Purchasing/Sr. Project Manager for Consulting Services.

“I really enjoyed the course and learned many items that I had not taken the time to think about in further detail.”

This is from Nicholas Anderson, CPP, CGPP, Materials Manager, Pacific Research Laboratories, Inc

“I have now completed the two parts of the Green Purchasing and Sustainability, APS Course 3400. I found both courses provided a grounded framework on the key role that Purchaing  can provide to  the process of creating “green” sustainability. There were many good examples of how to estimate energy usage, identify areas in which the 3Rs could be applied and creating a “green” procurement plan that promotes companywide through supply chain sustainability practices/cost savings. I also appreciated the focus on CSR as an important element of defining sustainability as a crucial business best practice for potential growth and profitability.

Robert Menard, Certified Purchasing Professional, Certified Professional Purchasing Consultant, Certified Green Purchasing Professional

corporate market for education and training has shifted during this prolonged economic downturn.  Over the past five years, there has been a drastic increase in online course education and training for individuals as opposed to the more traditional “Instructor Led” customized on site seminars.   

While this latter live method will always be the most effective education and training option when delivered by skilled, knowledgeable, and talented seminar leaders, there are many cases in which economics dictate the favorability of online courses.  With so many pretenders crowding into the market, how does one pick the best sources for online courses? 

Along with the explosion in online training and education have come the predictable hangers-on, shameless marketers, and a bevy of loud mouth self promoters.  For example, there are so many free webinars circling the web that it would put a large team to work full time just to attend them.  But what value do they provide?  Often, these so called free webinars are often little more than two stage up-sells.  The first stage is the free webinar, the tease in which promises are made to learn much more if you sign up for the paid follow on course. 

So the question arises, “How do you know which online course has the quality that is worth paying for?”  As with almost every commercial endeavor, testimony as to quality and service are best provided by previous customers.  Here is the link to the high quality education and training courses offered through the American Purchasing Society. 

online training in purchasing, negotiation, and sales

The Society invests in the best talent and collaborates with renowned subject matter experts to create high content, high quality online courses.  Authors and developers must also be skilled in andragogy, the sciences of adult learning, as opposed to pedagogy, which is how most competitive other courses are created.  There is also an emphasis on “Instructional Design” so that the material is presented in the most effective fashion, including attention to the various learning styles (linear, global, kinesthetic, etc).  

In the next blog post, we’ll list some of the many courses offered by the Society.  After the brief synopsis, you see a testimonial from real customers, not just some advertising hype.

Robert Menard, Certified Purchasing Professional, Certified Professional Purchasing Consultant, Certified Green Purchasing Professional

Editor’s note: Shortly after the webinar on the American Purchasing Society salary survey and how to negotiate a salary, a fine story on 10 Interview Questions You Should Never Ask (and 5 You Always Should) appeared in the Daily Muse.   We commend this story to you.  The following are some comments supporting this story.

Many purchasing pros are skilled in negotiation at their jobs but not so adept at negotiating on their own behalf.  The reason is that buyers are selling when they are negotiating for jobs and salaries, a position with which many are uncomfortable.  For example, purchasing pros are conversant with the Total Cost of Ownership  it is easy to make a mistake when applying it to sales.  The benefit package contributes to the TCO of a job position but should never be brought up by the interviewee until the interviewer broaches the subject.  In sales parlance, one must always establish value before price. 

The story points out tht questions beginning with ‘why” or “who” reveal that the interviewee has most likely not done the home work or research expected of a job applicant.  This is straight forward good advice. 

In a more subtle point, the story equates an offer of references by the interviewee too early in the process with desperation.  Likening the interview to the dating process, the story cites, “It’s important to entice with your value and attract them to call you for the next date.” 

On the subject of “Questions You Should Definitely Ask in a Job Interview” the author cites five piercing and cogent questions that will differentiae you from your competitors.  In general, these are open ended questions.  Most importantly, these questions take control of the interview and effectively transfers control to the interviewee.  The interviewer delicately put into the position of selling the job opening to the candidate.  The result tends to be a stronger effort by the potential employer, usually culminating in a higher offer.   

online training in purchasing, negotiation, and sales

I particularly liked Question 5, ”What are the Most Important Things You’d Like to See Me Accomplish in the First 30, 60 and 90 days of Employment?”  This is known as the “presumptive sale”, much like the question of “cash or credit”? 

Let me know if you agree.

Robert Menard, Certified Purchasing Professional, Certified Professional Purchasing Consultant, Certified Green Purchasing Professional

Editor’s note: : This blog post is reprinted here with the permission of the author, Kelly Barner.  It was first published 29 November 2012 on the Buyers Meeting Point blog.

This week’s featured webinar was presented by My Purchasing Center featuring speakers from the American Purchasing Society. You can listen to the event on demand. 

There were two parts to the event, as suggested by the title. The first part of the event was a review of the preliminary findings of the Annual American Purchasing Society salary survey. The final report will be out in December and is available free of charge to society members. They have been running this salary survey since 1974 and provide the data they collect to the U.S. Department of Labor.

The second part of the event was presented by Robert Menard (CPP) and gave us some advice and rules of thumb on negotiating our own salaries – something you would think a bunch of professional negotiators would be very good at, but could use some brushing up on. One of the reasons we may falter in this very personal negotiation is that it requires as much skill in selling as negotiating: whether we are selling ourselves to a new organization or selling our contributions and capabilities to our current employer. In addition to my notes below, you can learn more about Robert Menard and his purchasing negotiation seminars and consulting on his website.

 When negotiating a salary, in purchasing or otherwise, start by getting a clear understanding of what they market will bear and how you compare to the other available candidates. The salary should be the final part of the interview process because you can not properly determine an appropriate salary without fully understanding the requirements of the role.

 Some general pieces of advice

Leave the salary space on an employment application form blank. If you are completing an online application where the salary is required to move forward on the form, enter an average and then bring it up in the interview process as the role is further clarified.

 Always remember to take into account what you know about Total Cost of Ownership when negotiating a salary – annual compensation is not the entire goal. The other pieces of the package include benefits, vacation time, travel requirements, corporate culture, advancement potential.  

 If procurement professionals are considered to be good negotiators, why do we need help preparing for a salary negotiation? In a salary negotiation, the candidate is in the ‘supplier’ role and therefore needs to take a more sales-based approach. This role reversal requires the candidate to take a sales mindset – focusing on communicating the value proposition to their prospective employer before addressing exact salary. 

online negotiation course

Procurement specific advice

Since there is an expectation that procurement professionals will be proficient negotiators, the salary negotiation is also an opportunity for the employer to see what the candidate’s skills are like. It is not necessary to be an aggressive negotiator to be an effective negotiator, but there is likely to be an expectation that the candidate will be familiar with how to behave once the negotiation begins – thoroughly understanding the connections between performance, responsibility and salary, asking questions as needed, looking to maximize the potential benefit for both parties. 

For bonus compensation above and beyond the base salary, Robert advised against savings driven bonuses. Although it may seem to reward skilled purchasing professionals, too much of the control leaves his/her hands. Stakeholders may refuse to leave incumbent suppliers, despite potential savings, and markets may turn so that savings over historical prices are impossible to achieve.

Kelly Barner

Robert Menard, Certified Purchasing Professional, Certified Professional Purchasing Consultant, Certified Green Purchasing Professional

 The December issue of Supply & Demand Chain Executive    will be devoted to sustainability.  It will feature a story called “Green Purchasing, Sustainability, and Cost Savings”.  I authored this story to clearly demonstrate that the very underpinnings of sustainability are found in green purchasing.  Sustainability is all about preservation and conservation.  A synonym for those words is savings, the forte of the purchasing profession. 

The story cites many instances of how cost savings come in tandem with true sustainability efforts.  Let’s explain using the fundamental example of energy as cited in the story. 

Assume a business chooses to buy higher priced “green” electric energy in a noble but misguided attempt to reduce fossil fuel usage, Green House Gas (GHG) emissions, and to help develop solar, wind, and other “alternative” energy sources.  For a fixed amount of electricity, all the purchaser has accomplished is to pay more for the green energy because in fact, the electricity is generated by the local fossil fuels burning utility.  

The physics involved in electricity generation and transmission necessitate localized plants and grids.  Green electricity is not being packaged at a remote wind or photovoltaic farm and delivered by UPS to be plugged into the buyer’s power feed.  Further, when the local electric utility receives payment, it collects what is owed, and forwards the premium onto the so called green generator with no sustainability gains having been accomplished.    

Green Purchasing and Sustainability

This charade does nothing to save money or the planet or natural resources.  A business organization is far better served by investing in technologies to reduce electricity consumption like soft starts (frequency inverters) on its motors, upgrade to more efficient HVAC equipment, retrofit its lighting, and deploy other proven measures, many of which have very short payback periods.   

The first certification in green purchasing is also cited, the Certified Green Purchasing Professional  established by the American Purchasing Society.   CGPP assimilates the mastery of natural sciences blended with skills in accounting, finance, and economics to create a truly comprehensive and rigorous designation.

Robert Menard, Certified Purchasing Professional, Certified Professional Purchasing Consultant, Certified Green Purchasing Professional

We all know about preferred suppliers but what do we know about preferred customers?  A well written cover story in the November 2012 edition of Supply Chain Management Review  entitled “The Wisdom of Becoming a Preferred Customer” offers superb insight into why supply chain executives should add this goal to the top of their priority list. 

 It begins with well known stories involving giants of industry and which dynamically illustrate the importance of being a preferred customer.  

Ford and Toyota  

Each was competing to become the world leader in hybrid vehicles.  As market demand increased, Ford  complained that the transmission supplier favored Toyota  .  Unfortunately for Ford, the demand for transmissions exceeded supply and Toyota was the preferred customer who received the supply it needed. 

Airbus and Boeing 

In another famous example, Airbus  publicly accused General Electric of favoring Boeing  in the development of engine technology for the next generation of airplanes, a market estimated in the hundreds of billions of dollars.  The story says that Airbus complained, “The problem we have  with GE is they go to Boeing and say ‘what type of engine should we design for your airframe” and then come to Airbus and say, ”here is the kind of airframe you need to build to fit our engine”.  Further, GE is the sole supplier of the largest Boeing next generation plane, the 777, and GE will not build an engine for any Airbus plane that would compete against Boeing in that market.  

Applied Cost and Price Analysis online course

This is stunningly clear evidence, on an enormous scale, of the value of being a preferred customer.  But there are thousands of other examples, large and small, throughout all industries and amongst businesses of all sizes.  Customers who do not actively manage their supplier relationships may incur nasty or unforeseen consequences when suppliers explicitly or tacitly decide that we are not a preferred customer. 

One common example is the case of allocation in product shortages.  A shortage need not involve high tech jet engines to cause great economic upheaval.  Construction supply houses go into panic mode when dry wall sheets become scarce.  Interruptions of supply can be caused by a gypsum plant going off line for any number of reasons.  When this happens, some manufactures sell to supply houses based upon allocation while others, with more advance partnering relationships, continue uninterrupted supply to preferred customers. 

Reverse scorecards 

In a study conducted by supply chain professors at Lehigh University who authored the story, some interesting findings emerge.  Taken as a whole, they recommend using a score card system similar to a supplier scorecard.  These are some of the macro positions. 

1. Supplier satisfaction relates directly to customer performance and behavior rather than demographic or other attributes.
2. The relationship between supplier satisfaction and viewing a customer as preferred is extremely strong.
3. Suppliers indicate clear agreement regarding the customer performance attributes that are most important to them.
4. Satisfied suppliers are more willing to provide valuable kinds of preferred treatment to their preferred customers compared to less satisfied suppliers.
5. There is a strong relationship between a supplier’s satisfaction with a customer and the level of trust the supplier perceives within the relationship.
6. Satisfied suppliers are much more likely to view their relationship with their customer positively along a relationship continuum, perceive that the relationship has perceived that the relationship has improved over the last three years, and expect the relationship to improve further.

 There is a great deal more of value in this story and we urge you to study it.

 This story first appeared in Rental Management magazine   in May 2003 and is relevant today as it was 10 years ago and as it will be 10 years hence.  The matter of partnering with suppliers and supplier relationship management is crucial to the success of any purchasing and supply chain operations management.

Robert Menard, Certified Purchasing Professional, Certified Professional Purchasing Consultant, Certified Green Purchasing Professional

Editor’s note:  While this story deals with the rental industry, substitution of many other industries would yield very similar results.  Here are some of the key points in question and answer fashion. 

 Rental Management: What is meant by the term Partnering?

 Menard: Partnering is a long-term committed business relationship between customer and supplier that concentrates on reducing the costs of doing business to improve the profit performance of the Partners.  The only motivation for Partnering is the reduction of the costs of doing business.  All other motivations will fail. 

 Rental Management: What are some of the key distinctions in a Partnering strategy that help sales pros stress the TCO rather than the price?

Menard: Let’s examine both sides of the equation.  First, take the customer buyer.  Simply stated, the buyer’s definition of ‘Best Value’ is the lowest TCO.  TCO is the sum of the four elements of Cost: Quality, Service, Delivery and Price (QSDP).  Price is just the initial cost.  The cost of Quality, Service, and Delivery, can and often do outweigh the Price.  A customer can always get a lower price.  A customer will, however, pay a higher price if it buys a quantifiable and measurable lower TCO because it makes economic sense.

 Expressed in consultative sales terms, the seller’s product or service is higher profit obtained at the same revenue level achieved by reducing costs.  The barrier for the sales organization to overcome is learning to speak the customer’s language.  In the customer’s cost driven culture, sales pros must quantify and measure their cost reduction value to the customer.

 Rental Management: What will attract the customer’s interest in a Partnering relationship and what costs can a rental firm realistically reduce?

Menard: In two words, transaction costs.  Transaction costs are substantial for the rental customer and carry a high cost per purchased dollar.  For illustration, take the case of a construction customer with a $5 Million dollar project.  Compared to a single electrical subcontract of $750,000, the $250,000 (using the 5% level) of rentals is made up of relatively frequent orders for low dollar amounts.  Assuming that high frequency low dollar transactions create high transactions costs compared to the value of the order, we have identified a promising cost savings target. 

Rental Management: Suppose that this Partnering model appeals to a rental firm, it has sufficient qualified customer candidates, and it can mount the training program for staff and customer.  How would it establish a Partnering program?

 Menard: Start by retraining both staff and customer in the TCO philosophy and the Partnering Strategy.  Translate benefits such as regional offices and convenience to hard dollars and numbers costs.  This will help sales pros and customers focus on costs.

 Tighten and strengthen commitments in the Partnering contracts and insist on committed volume of sales as part of the Partnering program.  Resist the urge to use blanket contracts that do little more than establish a price.  Visit customers to kick off the campaign and obtain top down directive by selling the Partnering Strategy to senior management, as buyers might feel threatened

 Rental Management: What other benefits can Partners expect as the program takes shape for the long term? 

Menard: Certainly, the collaboration to reduce costs which yields higher profits is justification of its own.  Nevertheless, once TCO philosophy takes root, up sell evolves into investment in value to further reduce costs.  If   both partners are sharing cost savings in subsequent years, it benefits the supplier to search the marketplace and bring higher productivity, lower cost products to the customer.  

 Rental Management: What about downsides?  What can potential partners anticipate and thereby eliminate as problems. 

 Menard: Several come to mind.  Among the most dangerous are complacency and doubt.  Living fat, dumb and happy invites attack.  Partners must constantly measure costs and periodically meet to evaluate performance as a unit and individuals, with the focus always on the cost. 

Another is the rebate policy.  Rebate programs are a List down, not a Cost up vehicle that underscores a Price focus and belie any cost centered partnering philosophy.  Furthermore, they penalize customers who fall short.  Cost oriented customers will prefer Pre-bates where cost reductions are cranked into the deal.

Robert Menard, Certified Purchasing Professional, Certified Professional Purchasing Consultant, Certified Green Purchasing Professional

Editor’s Note:  This interview of Mary Walker stems from our years relationship in which I have come to admire, benefit by, and utilize Mary’s talents.  I am fortunate to call her a friend and proud to write this story about her. This interview is presented in question and answer fashion in two parts.  This is Part 2.  Click here for Part 1

 Menard          You also wrote an online course.  Pleasse tell us about that.

 MW     To write a course, first you must be interested in the topic.  I have been reading for years on diversity in the workplace, not only about suppliers but also with the mix of your employees.  So many great ideas are brought to the table from a diverse work force.  So many large companies have a very detailed diversity program.  They encourage a percentage of their business to be with these suppliers.  They go to great lengths to help and support them and to grow their business.  Companies are expanding in having one or more employees versed in this area and in charge of the operation.  It is becoming a specialized field in purchasing. 

Menard          You are a student, an author or, and a recognized expert in the purchasing profession.  How has education and training in the professional helped you?  

MW     My long term employer Hagemeyer  was a great one for shaking up the process.  With hundreds of suppliers and probably 30 buyers, they were continually changing our product lines. I was a private branded product buyer, an abrasives buyer, a packaging buyer and several other commodities.  Taking on line courses, reading articles and magazines, and constant learning eased the challenges in changing categories.    

Menard          How has your professional education and training impacted your earnings? 

MW     Our company used a ranking system for buyers.  I was assigned as a Buyer III and in part due to my certifications and continued training in our profession.  This put me in a higher pay bracket. 

Menard          What advice do you have for those newer to the purchasing profession? 

MW     Sometimes you do not have a lot of choices in the job market.  Three things to think about when seeking employment are:

1. Does the employer recognize professional certifications as a benefit for you and the company
2. What type of training is offered to employees in the purchasing department
3. If you are just starting out in the field, try to find a company that uses major computer programs, like SAP or etc.  If you work for a company that has written their own programs and has their own system, if you want to change jobs down the road, this is a limitation on your qualifications.

Robert Menard, Certified Purchasing Professional, Certified Professional Purchasing Consultant, Certified Green Purchasing Professional

Editor’s Note:  This interview of Mary Walker, MBA, CPP, CPPM, CPSM, CPSD, CGPP, DTM stems from our years long  relationship in which I have come to admire, benefit by, and utilize Mary’s talents.  I am fortunate to call her a friend and proud to write this story about her. This interview is presented in question and answer fashion in two parts.  This is Part 1.  Click here for Part 2. 

Menard          Mary, you have earned many professional designations, been published in Purchasing magazine, and served in many capacities in the profession.  How did this journey begin?  What made you choose purchasing as a profession? 

MW     I was working for Kroehler Mfg. Co,  which was the largest furniture manufacturer in the world.  A job came open for the Purchasing and Inventory Control Manager’s assistance.  I applied and got the job. 

Menard          Tell me about other positions you have held.

MW     The best was when I was working as the Hoist Coordinator for Briggs-Weaver. I learned so much from my suppliers that it was like a continual education process.  It is critical in the hoist and crane business that the customer receives what is needed to do his job and getting the specifications accurately is a must.  Also I have worked as a material handling specialist.  This was putting together the needed components to make one shelf unit or hundreds. 

Menard          What are some of the job functions you enjoy? 

MW     Purchasing functions are many and that is what makes the work so interesting.  Every day is different.  Dealing with suppliers was the most enjoyable.  Whether it was a problem, expediting or finding information, you got to know these people all across the country.  

Menard          What are some of the job functions you do not enjoy?  

MW     Expediting, would me the one.  At times, I have had someone that did this for me, but then you miss out on getting to know your suppliers. 

Menard          You have joined professional organizations and earned many professional designations.  One is the American Purchasing Society How long have you been a member and what do you like about the Society? 

MW     I joined the American Purchasing Society in 1999.  I like the Society’s focus on continuing education and training; it is part of my inquisitive nature.  It offers the best opportunities.  

Menard          Well, you certainly are interested in learning as demonstrated by your pursuit of professional designations.  Your latest is attainment of the Certified Green Purchasing Professional (CGPP) designation.  What motivated you to pursue the CGPP? 

MW     It was a challenge.  When I join an organization or enter something new.  I am not content at just being a member or one in a group.  I want to know all there is to know and get all there is to get out of my participation.  It was a door opener in to my profession that I needed to open. 

I have never been into going green or sustainability.  At home, if it was up to me, I would probably dump everything in the trash bin.  I was really clueless in this area and wanted to know more.  I had no idea of the details and have a very different outlook on these processes than I had before.  

online training in purchasing, negotiation, and sales

Menard         You mentioned education and training opportunities.  Have you taken any of the Society’s online courses? 

MW     Yes, many.  It is a great way to learn and to get continuing education hours.  The best is that you can do it at your own time.  You can get in and out of the course easily to compensate for the time breaks you have available.

Robert Menard, Certified Purchasing Professional, Certified Professional Purchasing Consultant, Certified Green Purchasing Professional

On 28 November at 2 PM Eastern Time MyPurchasingCenter.com will sponsor a webcast on Purchasing Salaries–What They Are and How to Negotiate Them. 

 In the first part, Dr. Harry E. Hough, CPP, CPP, President of American Purchasing Society will present a preview of results of the Society’s Salary Report for 2012.  This is the third in The OfficeMax Professional Development Series: Your Career in Indirect Procurement. 

• About the American Purchasing Society’s Salary Report for 2012 
• What Affects The Salary Level
• How Purchasing Salaries Have Changed
• Comparing Normal Salaries With Real Salaries
• How Much Buyers Make
• How Much Purchasing Managers Make
• Purchasing Executive Salaries
• What’s Ahead

In the second part of the webcast, Robert Menard , CPP, CGPP, and CPPC, Author, Consultant, and Trainer, will discuss how to negotiate purchasing salaries.  The job search is as much about negotiation as it is about selling.  Buyers often are unable to negotiate well for themselves and may not possess the selling skills required. 

This webcast is the professional buyers’ equivalent of the advice to doctors, “Physician. Heal thyself!” Here are some of the most important points:

• When Does Job Negotiation Begin
• Establishing Value Before Price
• How and Why the Job Interview is a Live Test of Your Negotiation Skills
• Differences for New and Experienced Job Seekers
• Tips for All Job Seekers, New and Experienced

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