Procurement Lessons from the Apprentice TV programme

The UK version of the Apprentice two weeks ago featured their annual ‘procurement’ task, where the teams are sent out to buy a fairly random list of items and negotiate the best possible price. It actually demonstrated some useful procurement and negotiating truths.

First of all, planning is key in any process and every negotiation. One team planned well and had identified 8 of the 10 items before leaving the hotel. The other team had trouble identifying any items sources and in the end they were keen to just ‘get out on the road’ as if being mobile would somehow magic up the answers.

Gavin’s team still doesn’t even know what half the items are. They’ve found light bulbs – in Teddington, an hour out of London.  Natasha starts by saying £20 is the maximum they can pay. No, the guy says. £30. No. £40. No. Within seconds they’re up to £80 and Vincent has stepped in. (That’s one problem with the ‘lowball’ initial offer – you can look pretty stupid if the supplier just says ‘no’, and you’ve probably annoyed them too).

Natasha is upset that Vincent interrupted her.  “I could have done more negotiation.”  Yes, but you were negotiating UPWARDS Natasha!!

Vincent thinks he’s done a great deal as he negotiates 25% off the price of the steak (so most CPOs would be chalking that up as a 25% saving in their savings measurements), but he’s actually paying 40% more than the other team! (Which nicely demonstrates the difficulty of measuring savings properly unless you have access to quality market price benchmarking data).

That’s where Silver Bullet Associates can help. We regularly see supplier’s prices and negotiated discounts so we can quickly help you benchmark your deals and qualify your negotiated savings against the market best.

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