Negotiation Techniques with Cost Breakdown

Cost-breakdown negotiation is one of the most important steps of procurement maturity level 3. Understanding the supplier's production processes and cost components quickly gives the buyer the knowledge and ability to see the opportunities in the supply chain.

What we will cover

• The logic of cost breakdown: Understanding production processes and cost components, and correctly assessing the supplier's competitive advantages
• Tender cost breakdown format: A cost breakdown completed in the format prepared by the buyer, and moving to different levels of depth over time
• Tracking component changes: Monitoring changes in cost components together with the supplier
• Long-term fixed price: Assessing whether to ask for a long-term fixed price
• Price changes in the contract: Turning price changes into contract clauses
• Analysing a price increase request: Analysing, with transparent criteria, a price increase request (CPI) that arrives a year later

Case study

Cost-breakdown negotiation is worked through line by line on a real case — the purchase of a 12-litre bucket. After the training, teams start benefiting from the advantages of using a cost breakdown in their next tender.

A single Tuesday-morning session, 4 hours, hands-on; all you need to bring is your laptop. The cost breakdown lays the foundation for the Cost Control System and Negotiation modules — taking them in sequence is recommended.