Trends & Issues

Strategically Managing Supplier Price Increases

The negotiation process for supplier price increases should focus on strategic issues, rather than simply price. A company needs a negotiating strategy that is more about improving supplier performance than just trying to minimize costs. — By Sharon Ross

In an ideal world, procurement and supply chain managers would establish a framework early in the sell-buy relationship that focuses holistically on the supplier relationship. It is not just price that is important, though traditionally the goal has always been to negotiate the lowest price possible through a competitive process. Furthermore, the usual process would involve suppliers negotiating price increas....