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Amrendra Kumar Saha
- Experienced Procurement And Contract Management Professional
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Problem If a company wants to procure a product that lack any historical reference or bench marking is not available at all, how can I approach to suppliers and satisfy myself regarding price to be settled Adnan Sabir Specialist, Sourcing, Grameenphone Limited Response of A.K.SAHA Dear Mr. Adnan, Greetings As per your your query, it seems that the company is in process of new product/ items/ piece-parts first time and there is no previous history and Price bench marking. Under above situation, it is first step define and decide the technical requirements based on available technical information/ sample/ drawing and where such Product will be used. Try to provide maximum information available with company and Release the Request for information RFI or Expression of Interest EOI As second step scrutinize the data received in response of RFI/ EOI issued by company and thus start filtering the valuable information to create the Technical specifications and Commercial terms and conditions to release Request for Proposal RFP depending upon requirements of the company. As a third stage once the technical proposal submitted by several bidder meets the company criteria then select the first three / four bidder based on value based criteria used in Vendor Selection process . As a fourth stage also calculate the total cost of ownership TCO of the Product and select the top three or four bidder who have given the lowest financial bid. As a fifth stage , compare the highest Technical Bidder price and Lowest Financial bidder price to understand the Zone of Possible agreements ZOPA. Simultaneously try to calculate the Approximate quot to be costquot and start negotiation with Highest technical bidder for Matching with quot to be costquot If you are not able to calculate the approximate quotto be costquot then calculate the quot value based Pricingquot. Value based Pricing is the amount which your company will gain after procuring the Product. Now take the difference of Overhead margins and Value Based pricing, this difference will give the Idea of the Product price for which you can negotiate. In case if you are not able to calculate the Value based Pricing then try to know that how much value your company will loose , if the new product is not available in time. This Price is known as Opportunity Cost. I am sure the above exercise will solve your problem, because I have already done this exercise for which only sample was available. if you need any more assistance you may connect me at amrendreyahoo.co.in. Regards, A.K.SAHA
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