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Written by Skill Dynamics

7 Key Negotiation Skills for Supply Chain and Procurement

Two members of a procurement team negotiating contracts at desk in office.

Negotiation is key to business success. Successful negotiation involves good interpersonal and communication skills used together to bring a desired result. For procurement professionals, it’s a core skill that’s essential to be well practiced in. A good negotiator can ensure the right prices are secured, which makes a significant contribution to an organization’s success. Improved supplier relationships, sustainable competitive advantage, and managing conflicts effectively are all good outcomes of successful negotiations.

Some people have an innate ability to negotiate effectively, bringing a positive result no matter how challenging the negotiation may be. Not everyone is this fortunate, but the good news is that negotiation skills can be learned and practiced for better results. Modern e-learning training solutions such as scenario-based training videos, simulations and gamification has made the task of training employees and improving negotiation skills less complex.

Let’s take, for example, scenario-based training videos: through these training solutions, employees are able to witness real work scenarios they are likely to face. This helps them to know exactly how to react in challenging circumstances and which tactics to use to reach their objectives in a negotiation. Some of the key skills for a successful negotiation that our online negotiation training that we teach are:

Negotiation Preparation

Preparation is responsible for 90% of negotiating success. The more prepared you are preceding a negotiation, the more likely it is that the result of the negotiation will be acceptable for all parties. The most important things to do during preparation are:

  1. Make sure to have all the information that you can about the negotiation.
  2. Think about the negotiation process from beginning to end and try to prepare for any outcome – for example, thinking about what tactics the other person may use.
  3. Learn and understand the product or service you’re negotiating for
  4. Learn and understand the person with whom you will be negotiating.

The power is always on the side of the organization with the best information so don’t skip over this part.

Patience In Negotiation

Good negotiators are normally very patient. They focus mainly on getting an agreement on all the parts of the contract that the two parties have in common before they seek cordial ways to settle the other issues. It helps to prepare good questions to ask to clarify and understand each point being discussed to avoid confusion later.

Active Listening In Negotiation

Negotiators have the ability to listen attentively, with active listening needed to read body language as well as of course verbal communication. It is vital to listen to the other party to find areas for compromise. Experienced negotiators will spend more time listening to the other party and finding clues for further debate rather than defending their own viewpoints.

Emotional Control In Procurement Negotiation

It is important that negotiators can keep their emotions under control during the negotiation. Sensitive issues can naturally be tense to negotiate on, but allowing emotions to take control will undoubtedly worsen the situation for all involved.

Communication & Negotiation

Skilled negotiators must be able to communicate clearly and efficiently with the other party during the negotiation. If the negotiator does not state their case clearly, it can lead to misunderstanding and an unfavorable result. During a bargaining meeting, an effective negotiator must have the skills and tact to clearly point out their desired outcome.

Negotiation & Problem Solving

Employees with good negotiation skills have the capability to find a variety of solutions to problems. Instead of concentrating on their desired goal for the negotiation, a skilled individual will focus on addressing key issues, which if left unresolved, could lead to a breakdown in communication during the negotiation so it benefits both sides to shine a light on all potentially contentious issues.

Ethics In Negotiation

Ethical standards and reliability in a skilled negotiator stimulate trust for an effective negotiation to take place. Both parties in a negotiation must trust that the other side will keep up with promises and agreements. A negotiator must have the skills to implement his promises after bargaining ends as ethics in procurement is a key skill to learn.

Being a good negotiator requires a set of skills and knowledge to make sure that the required objectives are reached. To make this happen, it is essential to provide an effective training and development program and provide access to purchasing training for procurement and supply chain employees, allowing them to learn about the essence of procurement purchasing, negotiation, and the steps to follow. Increased competitive advantage and profitability are sure to follow from improvement in negotiation skills.

Review our extensive range of course content designed for every supply chain and procurement role in our course catalogs.

Skill Dynamics