In an era of inflation, Buyers often find themselves disempowered, navigating through price hikes and hoping to avoid excessive increases. The perception that achieving savings is beyond their reach can be pervasive. But should this sentiment prevail?
The resounding answer is: No. In fact, I’m nearly certain that the answer is a resounding No, once you understand the transformative potential of Open Book Cost Models Buyers possess the ability to push back, combat inflation, and reclaim their cost-saving prowess. However, this requires the arsenal of tools, data-driven insights, strategic leverage, specialized training, and the support of their management. So, what are these essential tools that Buyers require? The linchpin is undeniably Open Book Cost Modeling. As for the vital data that Buyers crave, it’s the realm of Data-Driven Knowledge-Based Cost Modeling, preferably embracing the transparency of open book models. Where lies the leverage needed by Buyers?
It’s seamlessly woven into the fabric of open book cost modeling, where these models evolve into actionable quotes. These quotes facilitate resourcing and offer maximum leverage, reigniting the flame of successful negotiations. Regarding necessary training, it’s encapsulated within a comprehensive 3-phase training model that guides Buyers through systematically applying open book cost models to their parts and expenditures. This process proactively uncovers savings, identifies waste, and empowers them to execute impactful negotiations. Even in the event of negotiation setbacks, the solution is straightforward: resourcing the supplier based on the open book cost model. It’s an attainable approach. Where do the seeds of success expectations for Buyers originate?
The executive management team holds the key and the responsibility to empower their Buyers. This pivotal journey typically commences with a Chief Procurement Officer (CPO) or a Vice President of Supply Chain, supported by key director-level personnel who play an integral role.