{"id":2717,"date":"2009-08-05T19:18:00","date_gmt":"2009-08-05T19:18:00","guid":{"rendered":"https:\/\/www.certitrek.com\/nlpa\/2009\/08\/05\/whitepaper-wednesday-how-suppliers-go-above-procurements-head\/"},"modified":"2021-08-12T08:13:54","modified_gmt":"2021-08-12T12:13:54","slug":"how-suppliers-go-above-procurements-head","status":"publish","type":"post","link":"https:\/\/www.certitrek.com\/nlpa\/blog\/how-suppliers-go-above-procurements-head\/","title":{"rendered":"How Suppliers Go Above Procurement&#8217;s Head"},"content":{"rendered":"<p>Welcome back to another installment of Whitepaper Wednesday here on the Purchasing Certification Blog. Today, I\u2019ll be reviewing a whitepaper entitled \u201cValue Creation Scorecard\u201d from Toolbox For Finance.<\/p>\n<p>Once I read the first words of this whitepaper, I knew I had to review it. It started out as such:<\/p>\n<p>\u201c<strong>The Challenge<\/strong>: Efforts to increase the share of wallet are often hampered by the customer\u2019s procurement organization, which focuses on \u2018price\u2019 for specific transactions rather than overall \u2018value creation.&#8217;\u201d There Procurement goes again\u2026hampering the poor supplier\u2019s ability to achieve \u201cincreased share of wallet.\u201d<\/p>\n<p>The entire whitepaper is dedicated to helping suppliers develop a strategy for getting their procurement counterparts to not push so hard for lower prices. In fact \u2013 and by coincidence \u2013 the topic is very similar to what I\u2019ve just covered in the Suppliers Negotiation.<\/p>\n<p>The whitepaper is based on a case study of a supplier, named \u201cBaker,\u201d who \u201clacks the strong \u2018corner-office relationships necessary to communicate the value it can bring to the relationship. As a result, account managers end up discussing the value and savings it can deliver with purchasing professionals who are rewarded primarily for driving down unit costs.\u201d<\/p>\n<p>The whitepaper reveals Baker\u2019s strategy for countering the <a href=\"https:\/\/lms.nextlevelpurchasing.com\/course\/view.php?id=10\">procurement negotiation<\/a> tactics that it is facing: \u201cTo get beyond procurement, Baker develops a scorecard built back from the customer\u2019s key performance indicators. Baker and the customer jointly identify specific goals for each of five performance areas.\u201d<\/p>\n<p>Now, is <a href=\"https:\/\/www.certitrek.com\/nlpa\/news\/purchasing-articles\/supplier-performance-management\/\">measuring supplier performance<\/a> giving a supplier the upper hand in a negotiation? Absolutely not! It is a <a href=\"https:\/\/lms.nextlevelpurchasing.com\/course\/view.php?id=6\">purchasing best practice<\/a> for getting the supplier to continually improve its performance and, as a result, your company\u2019s profits.<\/p>\n<p>However, how the scorecard is created makes a difference when it comes time to negotiate. Just consider this excerpt: \u201cA bit of advantage, however, does accrue to Baker as the \u2018first mover,\u2019 as it can work with the customer to define the scorecard metrics in a way that is sure to underscore Baker\u2019s strengths. Suppliers can realize a strategic advantage by being a first mover, as it is in the process of defining the scorecard inputs that a supplier can influence customers to define the value to the supplier\u2019s strengths.\u201d<\/p>\n<p>While openly collaborating on goals and measuring performance is recommended for any strategic <a href=\"https:\/\/lms.nextlevelpurchasing.com\/course\/view.php?id=36\">supplier relationship<\/a>, a supplier intentionally influencing a biased scorecard in this manner is questionable at best and unethical at worst, in my opinion. And apparently, suppliers expect more out of a performance evaluation program than just the privilege of continuing business and improving their own metrics: the whitepaper quotes a Baker executive who indicates an expectation for a bigger share of the business and higher prices.<\/p>\n<p>Wow! Interesting to hear how sellers think, isn\u2019t it?<\/p>\n<p>The whitepaper continues an analysis of the benefits of this sales approach. Of course, it couldn\u2019t resist one last potshot at Procurement on the last page of content, saying \u201cthe customer\u2019s purchasing posture must be open to the possibility of non-price negotiations. In the hands of Purchasing, the <a href=\"https:\/\/lms.nextlevelpurchasing.com\/\">Supplier RFP Scorecard<\/a> will simply be used to exert additional price pressure.\u201d<\/p>\n<p>While it gets me a little mad to think that suppliers want to use supplier scorecards to raise their prices, there is so much value to understanding the <a href=\"https:\/\/lms.nextlevelpurchasing.com\/\">Negotiation Checklist<\/a>\u00a0that will be used against you.<\/p>\n<p class=\"p1\"><span class=\"s1\"><a href=\"https:\/\/lms.nextlevelpurchasing.com\/\"><b>NLPA Learning<\/b><\/a><b>:<\/b>\u00a0Looking for authoritative procurement templates, tools, webinars, and more? Stop trying to create resources from scratch and start taking advantage of having exactly what you need right at your fingertips in\u00a0NLPA Learning.<\/span><\/p>\n","protected":false},"excerpt":{"rendered":"<p>Welcome back to another installment of Whitepaper Wednesday here on [&hellip;]<\/p>\n","protected":false},"author":12,"featured_media":4076,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[1],"tags":[],"class_list":["post-2717","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-procurement"],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v19.13 - https:\/\/yoast.com\/wordpress\/plugins\/seo\/ -->\n<title>How Suppliers Go Above Procurement\u2019s Head - NLPA<\/title>\n<meta name=\"description\" content=\"The whitepaper reveals Baker\u2019s strategy for countering the procurement negotiation tactics that it is facing: \u201cTo get beyond procurement, Baker develops a scorecard built back from the customer\u2019s key performance indicators.\" \/>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.certitrek.com\/nlpa\/blog\/how-suppliers-go-above-procurements-head\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"How Suppliers Go Above Procurement\u2019s Head - NLPA\" \/>\n<meta property=\"og:description\" content=\"The whitepaper reveals Baker\u2019s strategy for countering the procurement negotiation tactics that it is facing: \u201cTo get beyond procurement, Baker develops a scorecard built back from the customer\u2019s key performance indicators.\" \/>\n<meta property=\"og:url\" content=\"https:\/\/www.certitrek.com\/nlpa\/blog\/how-suppliers-go-above-procurements-head\/\" \/>\n<meta property=\"og:site_name\" content=\"Next Level Purchasing Association (NLPA)\" \/>\n<meta property=\"article:publisher\" content=\"https:\/\/www.facebook.com\/NextLevelPurchasing\/\" \/>\n<meta property=\"article:published_time\" content=\"2009-08-05T19:18:00+00:00\" \/>\n<meta property=\"article:modified_time\" content=\"2021-08-12T12:13:54+00:00\" \/>\n<meta property=\"og:image\" content=\"https:\/\/www.certitrek.com\/nlpa\/wp-content\/uploads\/sites\/5\/2020\/11\/nlpa-images-086.jpg\" \/>\n\t<meta property=\"og:image:width\" content=\"1600\" \/>\n\t<meta property=\"og:image:height\" content=\"1067\" \/>\n\t<meta property=\"og:image:type\" content=\"image\/jpeg\" \/>\n<meta name=\"author\" content=\"Galo Matagay\" \/>\n<meta name=\"twitter:card\" content=\"summary_large_image\" \/>\n<meta name=\"twitter:creator\" content=\"@nextlevelpurch\" \/>\n<meta name=\"twitter:site\" content=\"@nextlevelpurch\" \/>\n<meta name=\"twitter:label1\" content=\"Written by\" \/>\n\t<meta name=\"twitter:data1\" content=\"Galo Matagay\" \/>\n\t<meta name=\"twitter:label2\" content=\"Est. reading time\" \/>\n\t<meta name=\"twitter:data2\" content=\"3 minutes\" \/>\n<script type=\"application\/ld+json\" class=\"yoast-schema-graph\">{\"@context\":\"https:\/\/schema.org\",\"@graph\":[{\"@type\":\"Article\",\"@id\":\"https:\/\/www.certitrek.com\/nlpa\/blog\/how-suppliers-go-above-procurements-head\/#article\",\"isPartOf\":{\"@id\":\"https:\/\/www.certitrek.com\/nlpa\/blog\/how-suppliers-go-above-procurements-head\/\"},\"author\":{\"name\":\"Galo Matagay\",\"@id\":\"https:\/\/www.certitrek.com\/nlpa\/#\/schema\/person\/72d094fab77892483dfa6e061cb27eaa\"},\"headline\":\"How Suppliers Go Above Procurement&#8217;s Head\",\"datePublished\":\"2009-08-05T19:18:00+00:00\",\"dateModified\":\"2021-08-12T12:13:54+00:00\",\"mainEntityOfPage\":{\"@id\":\"https:\/\/www.certitrek.com\/nlpa\/blog\/how-suppliers-go-above-procurements-head\/\"},\"wordCount\":604,\"publisher\":{\"@id\":\"https:\/\/www.certitrek.com\/nlpa\/#organization\"},\"articleSection\":[\"Procurement\"],\"inLanguage\":\"en-US\"},{\"@type\":\"WebPage\",\"@id\":\"https:\/\/www.certitrek.com\/nlpa\/blog\/how-suppliers-go-above-procurements-head\/\",\"url\":\"https:\/\/www.certitrek.com\/nlpa\/blog\/how-suppliers-go-above-procurements-head\/\",\"name\":\"How Suppliers Go Above Procurement\u2019s Head - 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