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Harry Hough, PhD, founder of the American Purchasing Society

Harry Hough, PhD, founder of the American Purchasing Society

Editor’s note: Dr. Hough is a frequent contributor to this blog

There are many types of requisition forms. Very simple standard generic types are available from your local stationery supply store, and they may be adequate for very small organizations. Better requisition forms are usually custom designed for a particular organization. Forms may be screen generated by the computer or more commonly, until recently, printed hard copy. Now there is even a requisition designed for a Web server.

The best requisition form contains spaces for essential information in logical sequence. It includes separate spaces or sections for the requestor and for the buyer. Line spacing should be regulated for keyboard use without the need to adjust every line or the spacing should be adequate for hand writing.

Hard copy generic forms are usually single copy, but good paper requisition forms should provide a copy for the requestor as well as for the buyer. Printed numbered forms provide good control and a handy reference for both requestor and buyer. The form should contain a space for the date of preparation, the date the requestor would like the material or service performed, and spaces for the date of any necessary approval. Spaces for the name of issuing department, the name and telephone number or extension of the requestor, and the name of the person authorizing the purchase should also be included.

Most forms have a space for the supplier, but the best forms indicate that the space for the actual selected supplier is reserved for use by the purchasing department. A separate space for a suggested supplier may be provided for the requestor’s use, but only the authorized buyer should be the person who makes the final selection. This often is a subject for dispute, especially when engineers or other technical people feel they are the only ones capable of making an intelligent choice about a supplier’s capabilities.

A good requisition form should use the same sequence for spaces as the purchase order. It is used by the buyer as a source document for P.O. preparation; therefore, it should have spaces for payment terms, F.O.B. point, and name of carrier as well as delivery address. The best requisition form contains printed instructions on the reverse side to help the requestor fill it out. If a manual system is in use, a third copy of the form is helpful. The original and a copy are sent to purchasing for processing. Once the order is placed, purchasing returns a copy to the requestor with delivery date information. This avoids phone calls from the requestor wanting to know the status of the request.

Valery Zelixon, Managing Director SupplierEvaluations.com

Valery Zelixon, Managing Director SupplierEvaluations.com

Editor’s note: Valery Zelixon is a frequent contributor to this blog.

Creating a successful source base outside of your native environment is a daunting challenge that businesses manage in variety of ways. Solutions range from having a fully owned subsidiary to completely outsourced operations. Whatever solution you choose, building an on-going trust with your supplier base is crucial to successful enterprise. Given the fact that the cost of inventory can be as high as 80% of your total product cost, managing source base is as critical to your bottom line as growing the revenue.

Building trust

Prepare for the long haul. Traditionally, supplier selection process involves a careful review and evaluation of potential supplier operations, especially seek strategic source suppliers. This means sending skilled procurement auditors to meet the supplier management, review of the manufacturing and quality management processes, understanding the logistics, getting to know the social practices.

All of the above takes the knowledge of the local culture and customs, understanding of the body language, negotiation styles, and knowing how to interact with the decision makers. All of this knowledge cannot be gained by reading a book. In some cultures it takes a long time to build a working relationship. China, for example, which has become the manufacturing choice for much of the world’s economic powers, building “guanxi” is often more important than the actual details of the current deal being negotiated.

For potential customers, having choices of bona fide is critically important. Strategic tools like supplier verifications and factory audits, especially for small and medium size companies, can spell the difference between success and failure.

www.supplierevaluations.com

What can supplier verification do for you? Essentially, it is one of many checks you need to go through to become comfortable dealing with a given supplier organization. Simple verification will confirm the business ownership information, business registration details and export license. In countries like China one must have a license to sell outside the country. It was recently revealed that Chinese companies hire unemployed actors to pose as their western managers. Business verification will help you avoid traps like that.

Factory audits and supplier inspections is yet another tool to help you make the right choice before extending significant funds. You would want someone you trust to help you inspect the company by paying them a visit, review the paperwork, interview the management, look at manufacturing facility and report back the findings. Someone who knows the culture can read a lot of signs a foreigner would not be able to read.

As you become more involved with selected supplier over time, supplier evaluation will be key to know what you are getting out of this relationship.

Valery Zelixon is a founder and managing partner at www.supplierevaluations.com.  Follow Valery on Twitter, connect on linkedin or become a fan on Facebook.

Robert Menard, Certified Purchasing Professional, Certified Professional Purchasing Consultant

Robert Menard, Certified Purchasing Professional, Certified Professional Purchasing Consultant

Editor’s note:  This is Part V in a series of eight that will explore Sustainability and green purchasing’s leadership role.  Part I explains how Sustainability is driven by the cost savings of green purchasing, Part II deals with the heart of Sustainability, energy and fuels, Part III with the 3Rs of Reduce/Reuse/ Recycle and  Part IV with construction and facilities in green purchasing.

In concert with the American Purchasing Society, I am developing a green procurement course that will have far more extensive material available in online, print, and CD media.  We will update quarterly so companies can build on successes.  We will offer discounts to those who sign up early so send me an email at RobertMenard@RobertMenard.com stating your interest and I’ll respond with particulars. 

Chemical/Environmental management is another area in which the touch points for purchasing can be many or few, scattered or continuous.  Because of this broad spectrum, we will concentrate on those areas in which purchasing is most likely to be involved such as Polices and Procedures of a program and awareness of the pushback so as not to micro-manage the program. 

Purchasing’s supply chain position means that it is involved in the Chemical/Environmental management program.  The data contained in material safety data sheets (MSDS) from suppliers is the starting point for creation of Policies and Procedures.  Techniques for calculating Green House Gas (GHG) or “carbon footprint” as well as conversion to dollars, numbers, and Sustainability gains are available in the up coming online course on Green Procurement. 

Policies

These bullet points are steps to writing a Chemical/Environmental supplier management policy. 

Suppliers shall:

  • Proceed cautiously in all issues affecting the environment
  • Detect as early as possible, identify, and evaluate potential environmental risks
  • Take appropriate measures to mitigate those risks or eliminate them when possible
  • Continuously develop and improve a Chemical/Environmental management system to minimize their impact on the environment
  • Reduce energy and water consumption as well as the use of non-renewable natural resources

 These bullet points are steps the minimum of a supplier Chemical/Environmental Sustainability program management policy. 

Procedures
Click here for online or CD/print media versions of "Green Purchasing" course

Click here for online or CD/print media versions of "Green Purchasing" course

 

  • Hazardous materials (hazmat) that present a danger to the environment shall be identified, labeled and managed to ensure safe handling, movement, storage, recycling or reuse, and disposal
  • Emergency procedures shall be written and implemented should accidents occur that could present an environmental danger
  • GHG emissions, in particular CO2, must should be identified, monitored, reduced, and treated as required prior to discharge
  • Waste of all types must be identified and reduced, reused, or recycled whether by process improvements, materials substitution and resources conservation initiatives
  • Emissions of noise, dust, odor, particles and any others local pollution shall be minimized
  • Suppliers are encouraged to design products with a minimal environmental impact throughout their lifecycle, taking into account the Life Cycle impacts from the conception, production, transportation, usage, and disposal 

Because the nature of Chemical/Environmental management is so controversial, purchasing pros must take into consideration the great and growing pushback by business and the public against what can be considered as extremism.  In February of this year, Conoco Phillips, BP America, and Caterpillar quit the U.S. Climate Action Partnership, a coalition of more than two dozen giant energy companies and environmental groups.  Within days, the state of Texas announced a suit against the EPA’s GHG ruling, citing “tainted data” and warning that Texas’ economy could suffer as a result.  

At the heart of the issue is the authority of EPA to regulate GHG in automobile emissions.  Texas argues that the EPA’s decision to declare CO2 and other GHG public health threats can’t be defended legally or scientifically.  Texas further cited the reliance by federal regulators on research by the United Nations Intergovernmental Panel on Climate Change and the Climatic Research Unit at Great Britain’s East Anglia University.  This research has largely been exposed as fraudulent and manipulated. 

The moral this story for the purchasing pro is that little of the Sustainability movement related to Chemical/Environmental management is settled science or politics.  Rather, a green purchasing program must pursue more proven, less contentious matters to make green purchasing gains in the Chemical/Environmental arena.

 

Steve Hague,  author, speaker, and Certified Purchasing Manager

Steve Hague, author, speaker, and Certified Purchasing Manager

Editor’s note: Steve Hague is a frequent contributor to this blog.

We all know that the internet contains a wealth of information on just about any subject you can think of.  Along with that information, there is usually some type of online business associated with either selling information related to the topic or products related to the subject.

 Car buying is certainly at the forefront of web sites associated with information, services, and of course products and there are thousands of these sites available to consumers. 

The question is can I really purchase a new car completely online ?  The answer is no as there are too many areas to be covered that require some type of personal communication. 

Also, any of the large sites such as CarDirect.com, Cars.com, Autobytel and others work through a dealership network.  Every new car sold in the U.S. must be purchased through a dealership by law.  That means that if you find a car on CarsDirect.com that you would like to purchase at the price advertised online, you can but you’ll still be buying through a dealership in your area. 

These sites are more like what could be called middlemen or broker sites. The sites advertise and get placed high in the search settings and the actual private dealerships pay the site so that if a consumer finds a vehicle he likes, he can click on the dealership to be contacted by them.  The actual sale then goes through the dealership and the sites get paid from the dealerships to be listed. 

While you may get a good deal buying this way, you’re more likely to get a better deal either doing the research yourself and contacting multiple dealers or through a non-commissioned auto buying agent such as ProAutoBuying.com.  

Click here for Bob's book and CDs

Click here for Bob's book and CDs

The buyer’s agent is a much more personal relationship and they do not have any allegiances nor do they get paid by the dealership.  This means they work and get paid from you and because of their contacts, information, and negotiating skills, they are typically the best way to get the best deal if you don’t have the time or willingness to haggle with car salespeople. 

So remember, it’s a good idea to research the vehicles you’re interested in using the internet. When it comes time for the actual negotiation and purchase though, do the work yourself or contact a buyer’s agent and you’re likely to get a better deal.

Editor’s note: This is the latest in a series of quizzes that test our knowledge as purchasing professionals.  

Robert Menard, Certified Purchasing Professional, Certified Professional Purchasing Consultant

Robert Menard, Certified Purchasing Professional, Certified Professional Purchasing Consultant

Before you blow off Green Purchasing as “touchy-feely”, try this eye opening quiz that highlights the cost reduction aspects of Sustainability

Write to me at RobertMenard@RobertMenard.com for the Answer Sheet.

1—–Which of the following is/are true about Green Purchasing? (Pick as many as appropriate)

a—–It usually costs money

b—–It usually saves money

c—–It is savings neutral

d—–It is too difficult to compute

 2—–Corporate Social Responsibility (CSR) gains are publicized pronouncements for many companies engaged in B2C commerce such as retailers and chain restaurants.  How does purchasing contribute to CSR successes?  (Pick as many as appropriate)

a—–Reduced energy consumption reduces carbon foot print and cost

b—–Recycling waste reduces the demand for new raw material and conserves land fill space

c—–Diversity in the work force and the use of local labor saves money

d—–Conserving fresh water saves money

 3—–Of these five major Sustainability initiatives, which does not fall directly under purchasing’s control? (Pick as many as appropriate)

a—–Electricity, motor, and power fuels

b—–Reduce/Reuse/Recycle

c—–Construction and Facilities

d—–Chemical and Environmental Management

e—–Corporate Social Responsibility

4—– Buying green energy costs more.  True or False

 5—–Rank these fuels in the order of most Btu intensive per dollar from greatest to least.

a—–Diesel oil #2

b—–Coal

c—–Natural gas

d—–Industrial oil # 6

e—–Electricity

 6—–Which of these is not an electrical energy savings device/measure? (Pick as many as appropriate)

a—–Soft start or ramp up frequency inverters for motors

b—–Shifting of peak demand to off hours

c—–Favoring fluorescent lighting over incandescent

d—–Using higher voltage whenever possible

e—–Motion sensor switches

 7—–Electric/fossil fuel hybrid cars are without doubt a greener alternative to traditional gasoline, diesel, and natural gas powered vehicles.  True or False?

 8—–Nuclear power is considered to be (Pick as many as appropriate)

a—–A sustainable power option

b—–Not a sustainable power option

c—–Subject of vigorous and ongoing dispute 

9—–Which of these benefits is not a direct result of “Reduction” (Pick as many as appropriate)

a—–It saves cartage cost to landfills

b—–It conserves landfill space

c—–It saves labor costs

d—–It saves fuel costs

Click here for online or CD/print media versions of "Green Purchasing" course

Click here for online or CD/print media versions of "Green Purchasing" course

 10—–Which is not a legitimate category of Reuse?  (Pick as many as appropriate)

a—–Reusing the product for its original purpose

b—–Reusing the product for a different purpose

c—–Recycling the product

d—–Reducing the demand for the product

 11—–How does Recycling save money? (Pick as many as appropriate)

a—–It minimizes the need for virgin raw material

b—–It does not save money

c—–It preserves resources

d—–Recycling is not always possible 

12—– Which of these do not constitute a Sustainable initiative? (Pick as many as appropriate)

a—–Reclaiming “gray water” (no sewage solids) and using for irrigation

b—–Reclaiming atmospheric precipitation rain, snow, sleet, etc) and reusing as process, fire protection, and even potable purposes

c—–Reclaiming storm water run off so that a high percentage of the  “natural state” is retained

d—–Combining sanitary with storm sewer waste

 13—–Early last century, oil was considered an “alternative” fuel to the existing coal, animal and mineral oils then is use.  Which of these are considered “alternative” fuels today? (Pick as many as appropriate)

a—–Solar/photovoltaic

b—–Wind

c—–Geothermal

d—–Tide

 14—–Which of these is not a “renewable”  fuel?

a—–Trash

b—–Biomass

c—–Wind

d—–Hydro

e—–Biogenic

So how did you do?  If not as well as you had hoped, click here for the online course, Green Purchasing and Sustainability.

Editor’s note: Stu Schlackman s a frequent contributor to this blog.

"Shorten your sales cycle & increase your win rate through competitive excellence"

"Shorten your sales cycle & increase your win rate through competitive excellence"

What are the attributes of great sales professionals? One is certainly having a positive attitude which we talk about in our book Don’t Just Stand There, Sell Something. It’s the formula we call OPERA which is being Optimistic, Persistent, Enthusiastic, Resilient and Affable.

Another important element is having the solid foundation of all the great sales training methodologies that are out in the market today such as how to prospect, present, ask questions and close. It’s about developing a strategic plan and knowing how to navigate through an account and understand who the decision makers are. It’s about knowing your company’s product and service offerings and being able to come up with the right solution for your customer. Last but not least it’s having the ability to influence and build long lasting relationship by developing trust with the customer. All these are a must for having a successful career in selling.

Art and Science

Many companies talk about the Art and Science when it comes to selling. Art being the selling skills and Science being the process to move the sales opportunity forward. We would like to introduce you to our Sales Intelligence System.  This system takes a look at the three critical components that are needed in sales today when approaching potential customers. They are:

  • IQ– the Intelligence Quotient for product knowledge, techniques and process to approach customers who have a need for a solution. The emphasis here is aptitude and the ability to know how to craft the right solution to the customer’s problem.
  • EQ– the Emotional Quotient is being aware of what is going on emotionally in a meeting between all parties involved. What are the feelings with the individuals interacting? Are they positive, negative or indifferent and how can this be influenced? You can call this intuition or people skills. It’s being aware of what is going on emotionally with the decision makers.
  • Personality Style– being able to understand the personality type of the customer to leverage and anticipate what is important to their temperament. We can gain insight into the person’s behavior based on the preferences of their personality style such as what they value, how they prefer to communicate and how they make decisions. 
Click for Bob's 3 CD set

Click for Bob's 3 CD set

What typically happens when we interact with other is that we size up what’s happening in a conversation from our perspective. We make judgments and evaluations of the other person based on what we are like and what we prefer. Therefore if the other person is not like us we formulate an opinion that is either positive or negative and sometimes indifferent. We consider them to be warm and friendly or possibly cold and unsociable. Our perceptions of others are not always accurate since we do not consider their preferences based on their personality style, but on our own preferences which quite often can be different. Our perception will impact our emotions which is how we feel about the other person. Our emotions will impact our behavior which will either be negative or positive, defensive or aggressive, proactive or reactive. Finally the way we behave will be directly proportional as to how the other person will behave towards us. So if we behave not that interested in the other person, they most likely will behave the same way towards us. This can all be avoided if we take into consideration that everyone is not always of the same personality style.

We believe that the only component of the Sales Intelligence System that can truly be altered is the EQ or as Dr. Michael Cox calls it People Skills and Emotional Intelligence which is the number one business skill needed today in the US. If we can better understand someone’s personality style we can improve our people skills and emotional intelligence (the EQ), which is critical in having a successful sales career. Remember that people buy from people!

If you want to better understand Emotional Intelligence we highly recommend Travis Bradberry’s book Emotional Intelligence 2.0 where he discusses the fact that emotional Intelligence is the only part of the three components that can be improved upon. We discuss and share with you how to apply personality styles to sales in our book Four People You Should Know.

Robert Menard, Certified Purchasing Professional, Certified Professional Purchasing Consultant

Robert Menard, Certified Purchasing Professional, Certified Professional Purchasing Consultant

Throughout my almost four decade career in business, the growth of foreign trade on an export and import basis has been remarkable for the amount and pace of change.  Over these years, we have witnessed nothing short of tectonic upheaval in economic terms.  One example is the migration of manufacturing jobs from west to east by the tens of millions.  

The economic structure of the western industrialized world has shifted away from making goods and more to delivering service. For the professional buyer, sourcing from so called “low cost countries” has long ago moved from common place to mandatory.  China is a curious and unique low cost source country. 

China 

This manufacturer to the world is also a leading economic power, surpassing Germany in 2009 to become the third largest country in GDP after the US and Japan.  China is not a “free market” country.  Rather, it falls into the State capitalism category

Its reputation for manufacturing prowess has attracted the attention of the rest of the world.  But Chinese suppliers must be developed and managed if the west is to optimize the foreign trade potential.  

Large international corporations often maintain sourcing offices in China.  This serves the Chinese supplier by building the relationship, educating the customer in Chinese culture and traditions, and getting the parties to better understand how the other reasons and decides.  For those who remember when US business started outsourcing to Mexico, the intellectual experience has parallels.  For instance, the Mexican employment rules seemed odd and inscrutable to me as an American but once I understood that the rate of pay was not near as important as the number of people working, the cultural barriers were easier to overcome.   

The sophisticated western customer western has business processes in place that the Chinese supplier does not fully understand. Some examples are supplier certification, supplier evaluation, quality, capacity, and financial audits, management policies, reference checks, plant visits, logistic verifications, and in today’s environmental sensitive world, RoHS  compliance and ISO 14000  registrations.  Instead, the suppliers trumpet their low prices. 

Small to mid size western businesses  

The mid to small size western buyers cannot afford a sourcing office in China, nor are they willing to risk jumping on the low price.  The global recession has created a buyer’s market.  Low cost countries like India have seen the gains made by China and are redoubling their efforts so the western customer has more choices. 

Add to this mix the well publicized troubles that the world has experienced with Chinese products, both in quality and toxicity, and the western buyer is understandably cautious.  This is a perfect example of how a low price can create an enormously high, even fatal Total Cost of Ownership.  

Click here for online or CD/print media versions of "Green Purchasing" course

Click here for online or CD/print media versions of "Green Purchasing" course

The economic slowdown has softened demand thereby increasing the sales activity by Chinese suppliers.  I have received hundreds of such broadcast emails, many of which must be retrieved from the spam folder. They are all pretty similar inviting the customer to buy from them without expressing any knowledge of what the customer does, its needs, requirements and the like.  Their sole aim is to sell via the internet on the lure of price alone.  This naive and silly attempt to do business indicates the supplier’s philosophy of using a scatter gun to spray the entire western business world with tiny bits of irrelevant information in the hopes that some (however miniscule proportion) will respond.  They should be using the accuracy of a rifle in their marketing and sales efforts to carefully target the prospects and serve them in a way the customer understands. 

For the mid and small size western customer, the gulf to the Chinese supplier remains to be bridged. 

Agents 

Another form of contact, and a far more effective one, has been personal contact from Chinese agents who want to specifically target market sectors such as machine parts, rubber and plastics, consumer goods, and many others.  Typically, these agents claim to represent an associating of suppliers and claim that all the suppliers are fully qualified.  At the same time, they are not certain what the western customer’s qualifications standards are.  Price again appears to be the main qualification. 

These agents often want me to approach western customers to negotiate sales.  When I point out that the qualification issue must be proven, the negotiation starts to fall apart.  They invite me to come to China, visit the plants, interview the people observe the processes, and video record the entire month’s worth of activity. 

For those interested in buying from China, please contact me at RobertMenard@RobertMenard.com

July 25th, 2010 | Tags: , ,

 

Harry Hough, PhD, founder of the American Purchasing Society

Harry Hough, PhD, founder of the American Purchasing Society

Editor’s note: Dr. Hough is a frequent contributor to this blog. 

Assume a product has never been purchased before. It is then easy to send Request for Quotations (RFQ’s) to companies that are found in a trade directory or the telephone book. It is common to do this, but caution must be exercised before assuming competitive quotations are being obtained.

Large and small companies alike have policies that require buyers to obtain three or more bids before placing certain types of orders. Three valid bids may not be enough to really evaluate the marketplace and obtain a relatively low cost. What is worse, the bids received may be rigged without the buyer having any idea that he or she is being duped. Here is an example that was recently reported.

Click to see Bob's online training courses

Click to see Bob's online training courses

The buyer sent four RFQ’s to companies listed in an industry directory. The companies had addresses far apart and in different states. The company names were completely different. As it turned out one of the suppliers did not respond. When the buyer called to find out why, he was told that the reason for not responding was that another company on the list was bidding and that both companies were owned by the same people. The salesperson said that sometimes they give two different quotes, one from each company, but the salesperson didn’t want to do so in this case.

Because of a large number of mergers and acquisitions, the chance that companies are related is higher than ever. Buyers can be deceived because related companies can conspire to direct the business to one of them by offering an inflated price from the other. Of course, the same thing can happen if competitors agree to split business, but that is clearly illegal. In either case, the buyer believes a competitive quote is being obtained, when it is not.

Robert Menard, Certified Purchasing Professional, Certified Professional Purchasing Consultant

Robert Menard, Certified Purchasing Professional, Certified Professional Purchasing Consultant

Don’t you wonder how prices are established?  Pricing is the process of determining a dollar amount that a seller asks from a buyer.  Pricing factors include tangible considerations such as production costs, geographical market place, competitive market place, quality, service, and delivery specifications.  It is also affected by intangibles such as optimization, perceived value, and dynamics such as marketing and sales strategies. 

Questions involved in pricing

The process of establishing a price evolves from answers to many questions such as these.

  • How much are competitors charging for similar/identical goods and services
  • How do customers “value” the products/services
  • Should there be
    • a single price         
    • multiple price points
    • quantity discounts
  • Should prices vary by geographical areas (zone pricing)
  • Is a penetration pricing strategy appropriate
  • What brand image should the price convey
  • Is yield management appropriate

An efficient price is a price that is very close to the maximum that customers will pay. 

There are numerous terms and strategies in the selling world.   These are a few of the most well known.

Click here for online or CD/print media versions of "Green Purchasing" course

Click here for online or CD/print media versions of "Green Purchasing" course

Nomenclature

 

  • Effective price      the price the seller receives after accounting for discounts, promotions, and other incentives.
  • Price homogenization   This strategy limits the number of prices for all of a supplier’s products. The old five and dime stores of yore in which everything cost either 5 or 10 cents have been replaced by “Dollar” stores but the principle is the same.   
  • Loss leader          This has a price that is often below cost and would otherwise create a Robinson-Patman violation save for its retail consequences.  It usually creates a loss to the seller on that particular loss leader but it draws customers who likely will buy other related and higher margin items.   Think of hot dog buns and soft drinks on the fourth of July.  The chips, dip, hot dogs and burgers bought more than offset the leader “loss”.
  • Price/quality or “Perceived Value”  Perceived Value refers to the perception by consumers that a higher price means greater quality. This method of pricing was established in the 1970s with the introduction of Zantac to compete with Tagamet.
  • Premium or Prestige               This is the strategy of pricing near the high end of the range to attract status-conscious consumers.  Some well known examples of premium pricing are Rolex and Steinway. People will buy a premium priced product because of its perceived prestige.
  • Goldilocks     This is the practice of “gold-plating” a version of a product in order to make the next-lower priced option appear more reasonably priced; encouraging customers to buy business-class airline seats for their “value” compared to the pricier first-class fare.
  • Funnie Munnie     In this practice, price is not a single amount but consists of various choices such as monthly payments or number of payments. I like to use the example of private jet planes that are frequently priced in “per occupied seat per mile per trip” basis.  Another example is the $x/month.  This is a favored strategy of the dreaded car sales man.  “What monthly payment could you afford?”  That payment could cost you dearly.
Robert Menard, Certified Purchasing Professional, Certified Professional Purchasing Consultant

Robert Menard, Certified Purchasing Professional, Certified Professional Purchasing Consultant

Negotiating in English can be a challenge for most of us.  But consider the plight of those who negotiate with us whose native language is other than English?  Better still, suppose you are the one who must negotiate in a language other than your native English? 

That last question may be more hypothetical than actual because most Americans speak only English.  The issue of foreign language fluency has always been important and is gaining in influence as trade of global scope is so commonplace. As western businesses increasingly outsource to low cost countries, the foreign language fluency has assumed a greater prominence. 

The language of business 

The old joke is that someone who speaks three languages is trilingual, two languages is bilingual, and only one language is American. In reality, the US has always been the world’s most productive society.  The American GDP not only dwarfs that of all other countries.  When divided by the population, the comparison is even more favorable.  For example, the approximate 14 trillion dollar GDP of the US divided by our 305 million population yields a GDP per capita of almost $45 thousand.  By comparison, China has a GDP of almost 4 billion but a population of 1.325 billion which yields a per capita GDP of about $3 thousand, a mere six percent of the US.  

It is little wonder then that the rest of the world wants to sell and negotiate in English, the language of the biggest producer and consumer on earth. 

America TonightFor a whimsical radio insight on the subject of foreign negotiation, click AmericaTonightwithRobertMenard.mp3 to hear Kate Delaney, host of America Tonight, interview me.  America Tonight has the largest overnight listening audience, topping out at about 1.6 million.