Cost Reduction Approaches in Purchasing
24-25 June 2019, Kuala Lumpur – Malaysia
Cost Reduction Approaches in Purchasing:
The purpose of Cost Reduction Approaches in Purchasing program is to ‘dig-in’ into the many practices generally used and viewed as Top Notch in purchasing and procurement. Attendees’ can evaluate their current standing and begin immediate implementation of the crucial steps involved in order to achieve maximum total value for their respective organizations.
Since 40 to 60 percent of the total cost of sales typically revolves around purchased parts, components and supplies, purchasing holds a pivotal role in most organizations. Small and simple cost reductions gained in the acquisition of materials can have a great and positive impact on profits than equal improvements in other cost-sales areas of the organization.
Benefits of Attending Cost Reduction Approaches in Purchasing Training:
Upon completion of the training program, delegates will be able to:
- Understand and Examine the key features in spend profiles
- Understand and Evaluate costing reduction approaches and opportunities
- Understanding supplier pricing structures
- Apply purchasing strategic plans
- Develop common approaches in planning for negotiations
Who should attend?
This training program is highly recommended to a wide range of professionals but will greatly benefit:
- Contracts, Purchasing and Procurement Personnel
- Engineering, Operational, Project and Maintenance Personnel
- Any individual playing a crucial role in the planning, evaluation, preparation and management of purchasing, tenders, contracts that cover the acquisition of materials, equipment and services.
About The Trainer:
Jude Joseph is a Dynamic Speaker, Certified Corporate Trainer and Entrepreneur. He has acclaimed a lot of goodwill and accolades in the fields of education and corporate trainings by his High Impact Sessions.
Jude belongs to the new era of trainers in excellence. He is an Accredited Trainer from ACM International Academy (AIA), UK for ISO 17024:2012 Professional Programs, a Certified Trainer from Pembangunan Sumber Manusia Berhad (PSMB), Malaysia and also a Certified Training and Development Manager (Associate) from the Cambridge Association of Managers, United Kingdom.
Jude holds a Master in Business Management (Human Resource Management) and a Degree in Business Management. He also possesses certificates and experience in Communication, Hospitality, Emotional Intelligence, Logistics and Supply Chain, Human Resource (to name a few).
Over the last 23 years, Jude has worked with several organisations namely The Asian Institute of Chartered Bankers (formerly known as Institute of Bankers, Malaysia), Perak Branch, Kolej Syuen, Ipoh and Scania – Southeast Asia, Shah Alam holding senior positions in the areas of education, coaching, training and development, hospitality, logistics, supply chain, warehousing etc. whilst pursuing his passion in training and development.
Today, Jude teaches and trains a wide range of areas including management, communication, hospitality, travel and tourism, supply chain and logistics, human resource, emotional intelligence, purchasing and procurement etc. owing to his wide exposure in the various industries. These programmes are conducted by various training providers in collaboration with the Ministry of Human Resources, Malaysia.
Jude is appreciated for the positive energy and wealth of knowledge he brings to his programs. Owing to his down-to-earth approach, it is not surprising that participants (young or old) flock to him to share their experiences and to learn from him.
Cost Reduction Approaches in Purchasing Modules:
Module1: Continuous Improvement in Cost and Productivity
- How is purchasing viewed by other functions?
- What is a Purchasing Savings Model?
- What is Total Cost of Ownership?
- What is Cost Reduction Initiatives?
- The need to establish a Strategic Focus with Pareto Analysis on Cost
- Various Modern Methods of Analyzing the Spend
Module 2: Definition of Cost Reduction Approaches & Opportunities
- Developing Company Purchase Price Index and Comparing to External Indexes
- Understanding of Supply Marketplace and how Suppliers Price
- Best Practices in Cost Reduction
- Tactfully Resisting Price Increases
- How is Supplier Performance Measured?
- Exploring the various Cost Saving Methods
Module 3: Price Evaluation Methods
- Price Justification
- Price Analysis Methods
- The Competition that leads to price reduction and evaluation
- Cost Analysis Methods
- Elements of Cost: A Breakdown
- Developing “Should Cost”
Module 4: Why Negotiate?
- Successful Negotiations
- Negotiation Skill Sets
- Steps in Negotiation Preparation
- Methods of Persuasion Skills
- What Does Win/Win Really Articulate?
- Determining the Issues
- Rating & Valuing Issues
Module 5: Determination of the various Strengths & Weaknesses
- Know Your Options & Alternatives Better to Negotiated Agreements (BATNA)
- Analyzing the Other Side
- Negotiation Objectives
- Preparing the Negotiation Team
- Do’s & Don’ts for the Actual Negotiation
Module 6: Strategic Sourcing & Savings
- Definition of Sourcing
- What is a Sourcing Strategy?
- What is Strategic Sourcing?
- Procurement Savings
- Best Practices in Purchasing
Module 7: Strategies & Key Success Factors for Savings
- Reviewing Sourcing Contract Portfolio
- Cost Reduction Program
- Using Supplier as Resource
- Achieving realized savings – five key enablers
- Availability of spent amount data
- Cross Functional Co-operation
- Market Knowledge
- Creative Thinking
- Roles of Different Actors
Module 8: Planning & Preparing for Negotiation
- The importance of preparation
- Event Management – venue, room, time, day etc.
- Attendees – Who should attend?
- Setting Negotiation Objectives
- Identifying and Prioritizing Outcomes for both parties
- Understanding the Offer
- Defining the settlement range
- Information gathering & obtaining the facts
Module 9: Mitigating Risk by Contract Type
- Fixed Price Contracts
- Cost Type Contracts
- Time & Material Contract
- Blanket Purchase Order
- Framework Agreement
- Consignment VMI Agreement
- Letter of Intent
Module 10: Inventory Management Techniques
- Just in Time (JIT)
- Vendor Management Inventory
- Consignment Stock
- First-In-First-Out (FIFO)
- Inventory Turnover Ratio
- Economic Order Quantity
- Lead Time Reduction
- ABC Analysis
- Bulk shipments
- Payment Terms
- Optimizing Incoterms in Purchasing Decisions