employee from 01.01.2000 to 01.01.2005
Saint-Petersburg, St. Petersburg, Russian Federation
This work introduces a novel methodology for supplier negotiations that has been developed by the author through a critical analysis of current procurement management practices. The methodology is designed to optimize procurement processes and enhance business efficiency, and it incorporates the Total Cost of Ownership (TCO) at every stage. The structured negotiation process includes preparation, communication, proposal submission, selection, contract finalization, and a pioneering supplier incentive system using TCO-based bonuses and penalties. The methodology was tested in stainless steel procurement involving four suppliers and utilizes a novel performance evaluation system. The results demonstrate significantly improved supplier selection efficiency and TCO reduction due to the transparent, multi-stage negotiation process and incentives for enhanced product quality and logistics. This versatile methodology is applicable across various product categories and supplier numbers. The practical implications provide concrete recommendations for procurement optimization and improved business efficiency. Future research will focus on adapting the methodology to diverse industries and on a deeper analysis of TCO factors influencing procurement decisions.
tactical negotiations, Total Cost of Ownership, bonus and penalty system
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