Risk Reduction via Good Bargaining

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Risk Reduction via Good Bargaining
The Risk Inefficiencies of Bad Bargaining
1. The Risks of Not Bargaining
2. The Risks of Not Bargaining Well
3. The Risks of Poorly Structured Negotiated
Relationships
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Somewhere along the line, I figured out my job.
My job is to use up your funding.
Auto Industry Buyer
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The Toyota Way Principle 11 Respect your
extended network of partners and suppliers by
challenging them and helping them improve.
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Part of the Aligned Business Framework agreement
includes a commitment by Ford to phase in
up-front payments for engineering and
development costs substantial investments the
supplier previously had to shoulder until a part
or component system was launched. The up-front
money comes with a condition suppliers must
commit to bring their leading-edge technology to
Ford first. The promise is a critical part of
the automakers strategy that will enable it to
bring more innovative products to its customers.
American Executive Magazine September, 2006
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Its a win-win.Were de-risking the proposition
for our suppliers, and theyre bringing us their
best technology.
Andrew Hinkly Executive Director Americas
Production Purchasing Operations. Ford Motor
Company
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Share the Risk, share the gain...
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Share the Risk, share the gain...
3 Year Rolling Average
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Share the Risk, share the gain...
3 Year Rolling Average
5 Year Rolling Average
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The Pledge
1) I assign my negotiating rights to the committee
2) I will not talk about the following price,
acres, etc.
3) I will not sign contract until approved by
grower group
4) Built in opt-out clause
Other keys
- Outside negotiation expert
- Make them feel like negotiators
- Constant hand-holding
- Cultivate key growers
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Risk Reduction via Good Bargaining
Thank You.