The pressure for performance on people who have the responsibility for the purchase of goods and services is greater today than at any other time. As companies struggle with the rapid shift in technology and markets, purchasing professionals are finding themselves needing new and better skills, a better understanding of the cost structure of new and existing products and services and the ability to deal with new and different suppliers and technology. In the midst of this they find a management who are asking them to reduce costs as never before and who view them as a cost center. The burden on purchasing professionals is to find effective ways of reducing costs and above all the key role it plays as a profit center and how it will lead their organizations successfully through the continuing turbulent times.
PARTICIPANTS WILL LEARN:
- How uncovering deficiencies in supplier pricing practices can produce significant cost savings
- What the key cost drivers are and how to use them in negotiations
- Three new approaches to use in looking at cost and price
- How a knowledge of direct and indirect costs can uncover major cost savings opportunities
- Ways in which using the internet can identify hidden costs
WHO SHOULD ATTEND:
Purchasing and supply managers, buyers looking to gain a deeper insight into cost and price analysis and Managers responsible for the Purchasing function.
SPECIAL NOTE:
- Attendees should be instructed to bring hand held calculators to class with them.
WORKSHOP OUTLINE: COST/PRICE ANALYSISsm
TRADITIONAL BUYING METHODS
- QUOTATIONS
- BIDDING
- COMPETITION
- PRICE COMPARISON TECHNIQUES
DEFICIENCIES IN SUPPLIER PRICING PRACTICES
- DETERMINANTS OF COST AND PRICE
- OPPORTUNITIES TO EXPLORE IN SUPPLIER PRICING PRACTICES
- SET UP COSTS
- FIXED AND VARIABLE COSTS
- INDEXING
COMPETITIVE PRICING AND PRICING THEORY
- ITEMS THAT AFFECT PRICING PRACTICES
- THE MARKET PLACE
- WHAT AFFECTS PRICE
- HOW SUPPLIERS ESTABLISH THEIR PRICE
ESTIMATING TECHNIQUES
- MATERIAL COSTING
- WHERE TO GET COST DATA
- DIRECT AND INDIRECT LABOR
- ADMINISTRATIVE EXPENSES
- SETTING PROFIT LEVELS
ANALYSIS OF DIRECT AND INDIRECT COSTS
- THE LEARNING CURVE
- UNIT COSTS ANALYSIS
EXERCISE: COST CASE
DISSECTING FINANCIAL STATEMENTS
ZERO BASE PRICING
- SPECIFICATIONS - A KEY DRIVER
- WHEN TO USE THIS CONCEPT
- WHERE CAN THIS APPROACH BE USED
- HOW TO EMPLOY ZERO BASED PRICING
- SOME RESULTS YOU CAN EXPECT
- SOME TOOLS TO HELP THE BUYER
FUTURE COSTING
- WHAT IT IS AND WHEN TO USE IT
- REQUIREMENTS FOR ITS USE IN THE RFQ
PRODUCE LIFE CYCLE
- WHY THIS CONCEPT AFFECTS THE BUYER
- LIFE-CYCLE ANALYSIS
- PURCHASING STRATEGY USING THIS APPROACH
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