Course: Tendering Procurement and Negotiation skills, Dubai 4-8 December 2016

I am currently in damp old London Town, but in a couple of weeks I shall be off to Dubai to run Tendering, Procurement and Negotiation skills.

We have run this a couple of times already this year and the reception has been good - well I know I would say that but it has.

It is a bit of a "Ronseal" course - it does what it says on the tin.

Dubai is great in December - particularly the shopping.  Even if the exchange rate has not been in favour of sterling recently.  Hopefully the course content will help get over the shock.  Hope to see you there.

Marmite and Brexit

So the great "Marmite dispute" between Unilever and Tesco is over, but what did we learn?

There is a "Remain" analysis here at the Independent , an over from the FT here, and a Brexit analysis here at the Sun.

There is an interesting analysis that shows both sides suffered reputational damage (Marketing Week), but that of course is what promotional budgets are there for.

What we can be clear about is that this negotiation will be going on between Unilever and ASDA (and Morrisons etc.) and between P&G and Tesco (and ASDA, Morrisons etc.).  In fact they go on all the time.  This particular spat was very nicely timed for me because I had just been discussing with delegates a hypothetical similar battle between Tesco and Coca-Cola.

Unilever will be trying to maintain their profit margin, which is about 10%.  Tesco will be doing the same on a profit margin of about 1.7% (which is way down from the 5% or so it was earlier in the decade).  So on the face if it Unilever has lots of room to deal with material cost rises caused by the falling pound/euro exchange rate.  But why should it?  It's stock price will be in part based on the strong margins, so accepting lower margins would be a doubly whammy. 

Tesco of course in this cannot afford to absorb 15% price rises, and gets to look like the good guy looking after customer interests.

This negotiation between the 2 will go on all the time - it is just rather public this time, though interestingly the resolution is not as public as the spat.

Over time prices will rise - the weak pound means that imported raw materials will increase in costs, and products Unilever makes overseas will cost more when imported (they have no reason to reduce their internal transfer price and reduce profits elsewhere).  The public will pay more. 

Another factor is that the big discount competitors (Aldi, Lidl, Netto) are European and so their own brand products (if made in the EU) will also cost more in sterling.  Despite the competition, all the supermarkets have an interest in prices going up, none can afford to absorb the exchange rate impact, and none of their suppliers will do so either.  The size and speed of the drop means that currency hedging will only have limited some of the impact, and only for a limited time.

So what is the impact?  Sterling has fallen about 15%, but in any manufactured goods the cost of materials is only part of the total cost (maybe half or two thirds) so if products are made in the UK we might expect prices to go up 7.5% or 10%, and if imported 15%. 

In addition petrol and diesel prices should rise because oil is priced in dollars. Luckily (in a way) most of the pump price is tax and so the increase will not be 15% or anything like that.

Overall some commentators who know supermarkets are saying prices will on average rise by about 5%, which is low compared to the drop in sterling.  Efficiencies, competition, UK costs and other factors will keep it low.  Inflation will rise - for a year.  Assuming that there no further drops in sterling then this will be a spike in inflation unrelated to consumption and demand, which is why the Bank of England seem rather relaxed about it.

What does it mean for Buyers?  It means overseas products will be more expensive.  And that I wish I had bought my Euros for next month's holiday in France a month ago rather than waiting.  And bizarrely, I might be taking my own wine to France!

Negotiation in the Public sector

Negotiation is one of the key skills in business, but it has been mostly excluded from EU public procurement - until now.  The new regulations move negotiation from a "only if you have to" route to a potential alternative to a standard restricted tender.

The intention is clearly to try and get some better value, and to shake things up a bit in the bidding process. 

What concerns me is that the Public Sector might be de-skilled in commercial negotiation.  Now as a trainer, de-skilling is generally accompanied by the sound "Ker-Ching", but in this case I don't have something to sell (at least not yet - we are talking about it).  To me there has got to be a risk that skilled commercial negotiators who did this all day long in the private sector part of the business will have  a real advantage over Public Sector buyers.  Training would help (I would say that, wouldn't I) and so would bringing in people from the private sector (though there are problems with that), but the sort of skill and expertise needed to match the private sector is going to take a long time to build up.  Obviously the regular CIPS negotiation competitions will provide some people with the appropriate battle scars.

I wonder what this will mean, and I don't have any easy answers.  Does it mean that buyers will avoid these routes?  Or that they will try them and be burned?  Or will there just be lots of questions?

I am interested in people's views - and later in the year I hope to be involved in some suitable training targeting public sector buyers.  And possibly private sector sales teams too.  Lots of things in the air.

More books

As has been hinted at in previous posts, I now have the go-ahead for two new books - The Quick Guide to Purchasing Management, and the Quick Guide to Purchasing Negotiation.  They will probably come out in that order because I have more notes for the former than the latter.  I suspect there will be more interest in the Negotiation book, but I hope I am wrong.
The books will be shorter than Excellence in Public Sector Procurement, but are intended to be in depth studies rather than general introductions.  They will be applicable to both public and private sector Purchasing. 

The timescale for publication relies on me writing them, but I am hopeful that both (or at least one) will see print this year.  That might seem slow, but so am I and so is the print publication cycle. We have not yet decided on whether will be electronic editions, and that probably depends on the Kindle sales we have achieved for other books - which I shall not find out about until March or so.

I might trial some sections of the books hear, so please feel free to comment and improve them ahead of publicaction.

Commercial Skills training for Schools

On Monday 4th April 2010, we are piloting a new course called Commercial Skills for Schools.
It is aimed at Teachers, governors and school administrators who, facing up to the new realities of school funding, want to improve their commercial skills so that they can get more for less, and get more income into the school from their commercial activities.
This is the first pilot, and if it is successful we shall be looking to launch it from May 2010.
Of course if it is not successful, we shall have to regroup and learn the lessons from the pilot.

This will be a commercial offering, but the primary driver is to help schools to strengthen their financial position. Anyone interested, please drop me a line.

Dilbert's course in Comparing

Anyone who has attended one of my training courses will know that I think that Scott Adams' Dilbert cartoon is not only very funny, but very imformative. (and used by permission of Scott Adams himself, in case you were worrying).

Scott Adams also has a blog, which is generally more serious than the cartoon (not a high bar), where he often raises sensitive and/or controversial issues and floats some quite radical ideas. I am sure he would be pleased to know that I don't agree with everything he writes (I suspect he would be dissapointed if people did), but one of his recent posts I think is really on the money.

He suggests a course in Comparing alternatives. The aim is to make people better at resolving disagreements, and generally make the world more effective. In particular it would allow us to see through some of the standard rhetorical tricks used by politicians of all stances and (I hope) have more sensible debates on policy.

The agenda he suggests here would also be very useful training for business. In both management as a whole, and for procurement in particular, I think being able to conduct sensible comparisons - and to understand valid and invalid arguments - is absolutely essential.

A good grounding in formal Logic is really rather helpful in negotiations as well. An extremely useful free resource for this is available on Itunes - a 6 part programme called Critical Reasoning for Beginners, from Oxford University. It is also available on the Oxford University website as both audio and video podcasts here. It is delivered by Marianne Talbot.

Twittering Meetings

I was talking to a colleague who described a recent meeting between two rather traditional multi-national organisations. On the face of it there was an imbalance in the meeting between the host company who had 6 people in the meeting, and the visitor who only had 4. You would expect therefore that, allowing for individual skill and experience levels, that the hosts would be in the stronger position – being in their own offices and having greater resources available.

In fact the opposite applied. The reason? The visitors were live twitter feeding the meeting back to their colleagues in offices across Europe. So while the hosts were drawing on the 6 people in the room, the visitors were able to draw the experience and knowledge of about 20 people all across Europe.

Now, there are a number of issues raised by this. One is a certain level of politeness, because while the hosts were talking the visitors were busy tapping away on Blackberries sharing information with other people (and no doubt doing other things). This could certainly be seen as rude. But then again I am of a certain generation, and I am told that to people in their 20s this is actually perfectly normal. There is also a question of whether the visitors were paying due attention to the discussion going on around them while they fiddled with their technology.

Another issue is about security, and whether confidential information about a high level meeting was accessible to third parties if they were in some way able to access the feed. An important issue, but one that is increasingly common anyway as use of ICT becomes ever more prevalent.

Certainly the consequence of the meeting was that the visitors were able to draw on evidence not actually available to the people in the room, and were able to have suggestions and ideas tested live by a wide community of people who would be effected by the decisions. In previous times, the decisions would have been made in the room, carved in tablets of stone (or at least memos), and then distributed to the masses. Now the people involved could have an input and course correct the meeting as it happened, without having to take time out from their daily activities. As a result, not only will the decisions made be more robust and tested, they are also more likely to be implemented because the people delivering them have been involved in their construction. Action started the moment the meeting wrapped up, rather than sometime after the minutes were written, circulated and then forced through by the project leader.

Now this is in a staid, traditional industry – not media, ICT or creative industries. As my colleague said, one party was in the 1980s, one party was in the 21st century. There are issues to be worked out, but I think we are going to see a lot more of this style of working. Of course one of the drawbacks is that only the people in the room were able to go on the post meeting celebratory bar crawl….

2009/10 Training programmes

We are delighted to announce that we shall be running our own training programmes in 2010, starting on 22nd February with Market Research for the Chemical Industry, at The Heath Runcorn (with Robert Milner Associates).
The next day 23rd February 2010 we shall be running Chemical Industry Purchasing and suppy Chain Management, also at the Heath.

At a date to be arranged we shall be running "Beat the Buyer" a half day course focussing on sales and purchasing negotiations (in conjunction with NBA4Business).

In the remainder of this year we have;
Purchasing, Negotiation and Cost control 19-23rd October 2009 in Kuala Lumpur, and
Professional Purchasing Skills, 8th-12th October 2009 in Dubai, and
Complete Course in Purchasing Management, 13th - 17th December 09 in Cairo.

In addition we have a full programme of international training programmes in 2010.

The Complete Course on Purchasing Management
15 - 19 February Kuala Lumpur
The Complete Course on Purchasing Management
16 - 20 May Cairo
Purchasing Management Master Class (Certified Purchasing Professional)
5 - 9 July Vienna
The Complete Course on Purchasing Management
26 - 30 July London
Purchasing Management Master Class (Certified Purchasing Professional)
2 - 6 August Geneva
Purchasing Management Master Class (Certified Purchasing Professional)
1 - 5 November London
The Complete Course on Purchasing Management
29 Nov - 3 Dec Kuala Lumpur
Purchasing Management Master Class (Certified Purchasing Professional)
20 - 24 December Kuala Lumpur

Beat the Buyer - 14th October 2009

We are delighted to announce a new joint development with NBA4Business - a negotiation skills Workshop entitled "Beat the Buyer". This is part of a very reasonably priced series of 5 workshops which are being held at the award winning Shine Business Centre in Leeds - more details here.

Nick Bramley is an experienced saleman and trainer, and I will be bringing my expertise as a buyer to give people an opportunity to practice negotiation skills in a realistic setting. This is a unique opportunity to see negotiation from the viewpoints of both the Buyer and the Seller.

Prices for the workshop start at a very reasonable £75+VAT. Booking through NBA4Business .

Improved Buying Negotiations Course

Paul will be running a one day training course for the Engineering Employers Federation Sheffield Association on 18th October 2007, at Broomgrove House in Sheffield. The course is open to both members and non-members of the association for only £240 + VAT. For further details please contact EEF Sheffield on 0114 2680671, or click the link in the title above.