(Solution) CIPS ROSHN Negotiation Process
In this integrated assessment, a focus on a formal negotiation plan has been pursued. This is through the focus of Roshn organisation which is a Saudi Arabia’s largest real estate development company owned by the Public Investment Fund for KSA, has Vision 2030 supplier sourcing management strategies. The firm’s procurement department relies on a model outlined by Bailey et al that provides a rigorous approach to preparation and analysis in order to get better bargains. Hence, the Roshn internal supplier data collection and external market research to create accurate supplier risk and sourcing plans.
A variety of tools is applied, such as the Kraljic Matrix that is used to sort suppliers. The key findings note that different training activities include negotiation simulations and skills to prepare and help procurement officers for the journey. Another key finding ius that detailed planning and analytical structures accompany objectives and concession tracking. Another key finding note that supply relations are strategically classified on issues of risk and consequences as far as supply management is concerned. On a continuous basis, repetition and necessarily sequenced post negotiation reviews improve processes gradually for a successful negotiation plan.
From the findings and conclusions obtained, to maximise efficiency and optimise outcomes, it is recommended:
- Roshn standardise the Bailey et al procurement framework.
- Regular training will develop negotiation mastery, and the Kraljic Matrix will tailor strategies per supplier importance.
- Sourcing strategies should evolve through market reviews. Building long-term, trusting partnerships will foster competitiveness beyond transactions.
- Clear metrics measuring initiatives’ success will empower data-driven process adjustments.
- Adopting these practices will enhance Roshn’s sustainable sourcing in support of Vision 2030 goals.
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Description
Solution
Negotiation
Negotiation is a mutual business interaction between or among people and organizations in an attempt to reach desired goals, resolve conflicts or avoid controversy. It encompasses collaboration, negotiation, and part of agreeing to reach agreeable terms that will benefit all persons of interest. In procurement and supply context, negotiation aims at acquiring resources at the best rate, at the same time maintaining and developing supplier relations.
The negotiation model developed by Bailey et al is a strategic model particularly in procurement and supply. The model outlines three key stages: Pre-negotiation Preparation, Negotiation/Interaction, and Post-negotiation Follow-up.
- Pre-negotiation Preparation: This stage is very important since it creates a platform that facilitates negotiations. It covers the collection and evaluation of inside and outside context data including things like suppliers’ capacities, estimate of future demand, historical price information, regulative requirements and the likes (OPR, 2021). There are also the analyses of stakeholders as well as the bargaining power which is done by applying some tools like Mendelow Matrix, Porter’s five forces model and Kraljic Matrix as far as the supplier market power is concerned. Key issues and/ or risks are as follows while strategies are planned as follows. Moreover, the roles in the team are assigned and the schedule for the meeting and its organization is developed.
- Negotiation/Interaction: This is phase involves bargaining such that different parties talk in order to come to the agreement. It entails getting the most out of a situation by controlling confrontation, finding solutions, and cobbling rapport (OPR,2021). The most important requirements are the possibility of continuous, open, and trustful communication in the inter-organizational relationship, market knowledge, and the systematic assessment of the counterparty.
- Post-negotiation Follow-up: This stage keeps the customers on the right track and look at how to resolve any issue that may be remaining after the contract has been signed. The follow-up phase is critical since it preserves the supplier relations, and at the same time deal with contractual issues.
The implementation of the Bailey et al. model in ROSHN itself highlights strong prospects for achieving advanced procurement sourcing strategies by mapping a significant investment in technology and infrastructure into Vision 2030 in Saudi Arabia. This structured approach is helpful to ROSHN of accomplishing its mission of delivering sustainable communities through the strategic positioning of suppliers and management of contracts.
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Executive Summary
This assignment talks about the effective negotiation of procurement and supply. It includes at the beginning a brief about ROSHN company and its commercial department and what each function’s role. It also talked about the importance of procurement planning that assists in securing the best deals for the company. In addition to a specific category of spend that is commonly procured within the procurement function. Then it referred to the definition of the negotiation and what are the skills that any negotiator must have. It talked in details about the stages of negotiation and the importance of having a preparation stage, negotiation stage, and a post-contracting stage and what each of these stages include from activities need to be fulfilled in order to have a successful project. Moreover, there has been some information regarding the negotiation process within the approval cycle of procurement and how the negotiation is crucial prior approaching the market with a request for a quotation/proposal and what might impact any negotiation process such as PESTLE and Porter’s Five Forces elements. At the end, there has been some recommendations to enhance the knowledge of the current procurement officer at ROSHN along with nominating CIPS courses for any employee works in the procurement department. This report findings identify negotiation plan in procurement and supply management as essential for achieving value for money outcomes and leveraging in property sector where the organisation has based their operations. Also, this report has found that the Post-COVID global economic recession has elicited a reduction in overall performance of the property sector specifically in the real estate. Therefore, for ROSHN, limited resources have been identified as an issue impacting on the organisation success. This inform on the need for a detailed negotiation amongst the organisation different stakeholders to guarantee their continuity in business. The negotiation plan identified in this report is in alignment with various sourcing strategies, terms and conditions and stakeholder relationship. As part of this integrated report, the obtained findings and conclusions inform on the best practice of developing the negotiation plan. This is by following the phases of preparation, test, propose, bargain, agree and close. In all these identified stages, different tools and techniques can be used with all stakeholders relationships enhanced. Further, for achieving an optimum success in negotiation for design services, ROSHN would manage to achieve BATNA and MLA for best resources to be attained. From the findings and conclusions presented, there are different gaps noted affecting success of the negotiation plan. In order to fill the identified gaps, ROSHN can pursue various recommendations. These recommendations include implementing detailed plans with all stakeholders involved. Also, innovation and technology need to be introduced to be part of their negotiation process and successfully merged. An elaborate documentation is also important to be part of the negotiation plan with any conflict of interest mitigated. Also, depending on ROSHN target in terms of stakeholders, it is important to customise their negotiation plan.(Solution) New CIPS APPR Advanced Level 6 Final Assessment
- In conclusion, the findings in this report indicate that Woolworths is currently using Ariba and SAP systems. This study covers the annual spend of Woolworths, the portfolio of Woolworths, their Category and Risk Management.
- Based on the study, Woolworths have to reduce their annual costs, and this may be supported by automation of as many processes as possible and this will also improve their efficiency and effectiveness levels.
- Woolworths also has made significant efforts in categorising its products and managing supply and other risks by having a wide pool of suppliers.
- Further, the introduction of online shopping has greatly boosted their market reach and their competitiveness.
- Woolworths also has to consider grouping all its purchases into categories. This will greatly ease the amounts spent on buying individual items since bulk purchases allow for great discounts due to the economies of scale.
- Further, category management will ensure that the entire supply chain is managed effectively and efficiently with minimal instances of supply chain disruptions.
- Woolworths also must prioritise its stakeholders and acknowledge the role that each stakeholder plays and how this contributes significantly to the overall growth of the firm.
- Stakeholders have to be informed and involved when major decisions are to be made as this will enrich the strategies, contributions and suggestions brought forward.
- Stakeholder analysis is also key to maintain the stakeholder relations which improves not only the reputation of Woolworths but also the market share of Woolworths. This gives them a niche in their market.