Supply chains that take advantage of diverse suppliers are often cited as being more agile, resilient, innovative, and sustainable. They are credited for promoting consumer trust and driving competition.
When municipal and county governments need significant facility and infrastructure updates, but don’t have the funds available, they must identify new and creative ways to cut costs.
For example, Turner County, Georgia, needed to control expenses and upgrade its facilities and infrastructure to ensure its residents receive vital services. They began by analyzing the county’s energy and operational costs.
It’s easy to hear a buzz word in the industry and make assumptions. However, what happens when those assumptions prove incorrect? And what happens when those assumptions are the bedrock under which a sourcing contract is being shaped, priced and a customer/service provider relationship is developed?
Knowing the behavioral history of a supplier prior to negotiations is essential to understand the reasons why a supplier is likely to offer optimal prices and service level agreements (SLA).
In the past, siloed and in-person negotiations often revealed insights about supplier behavior, but these insights were usually ignored because there was no empirical way for a sourcing professional to capture, share, and leverage this behavioral data cross-functionally.
Imagine a scenario where a zealous sourcing manager at a Fortune 100 company is in negotiations with a new middle-market regional landscaping services provider. The negotiation is for a seven-figure annual landscaping and maintenance contract at their regional corporate park.
Nobel laureate Richard Thaler understands the “human” side of economics. He’s a founding member of behavioral economics and most recently won the 2017 Nobel Prize in Economics Sciences.