Negotiating with the economy in mind

The economy is always the pink elephant in the room. No matter our function, we have to look at our decisions based on current and future economic conditions. The recession has created an interesting phenomenon in the area of sourcing and supply chain management. On one hand the number of purchasing transactions and the dollar amount of actual purchases has decreased dramatically following sluggish demand for goods and services. Yet, the pressures of cost cutting and negotiating better prices have increased dramatically. Some less sophisticated buyers may have felt that we have lost our leverage in negotiating with suppliers. Lower quantities mean higher prices, right? Not all the time. The economy is forcing everyone, buyers and sellers alike, to look for new ways to capture value. Creativity is key, especially in an unsettled economy.