MAXIMIZING PURCHASING POWER:
TECHNIQUES FOR PRICE, COST, AND TOTAL VALUE

May 28-29, 2008 NEW DATE
Instructor: Thomas Tanel, C.P.M.
14 CEU Hours Awarded

WHY YOU SHOULD ATTEND
Today, purchasing, procurement, contracting, and supply management professionals must be the most progressive group in the company. All systems, techniques, and operations theories must be dynamic and responsive to the very latest changes. Simply put, to remain competitive in a fast-paced, global economy, your forecasting strategies and analytical skills must be top-notch. Worldwide competitive pressures require a greater contribution from the purchasing and physical supply function and suppliers to improve the organization's relative position on quality, price, technology, and responsiveness. Maximizing Purchasing Power: Techniques for Price, Cost, and Total Value can be your road map to achieving your most critical organizational objectives.
Maximizing Purchasing Power is a highly concentrated seminar that discusses price, cost, and total value analysis theories in the choice of goods and services—those which you may have purchased in the past and those you are considering for the future.
One of Purchasing's key functions is to determine the "right price.” But what exactly is the:
• Right Price?
• Fair and Reasonable Price?
• Total Cost of Ownership?
• Best Value at the Lowest Overall Cost?
How are these analyzed and determined? What “should cost” techniques are most applicable? Where do you begin?
You will find the answers you need in this valuable seminar. The comprehensive material presented in Maximizing Purchasing Power is both practical and job-specific, as well as relatively easy to apply.

WHO SHOULD ATTEND
This course is designed for procurement professionals who want to learn the applications of statistical and financial techniques for analyzing purchasing problems. It offers a practice-intensive learning experience to anyone responsible for selecting suppliers, negotiating prices and fees, and purchasing goods and services. Maximizing Purchasing Power is recommended for new buyers, senior buyers, procurement staff analysts, contract administrators, commodity and sourcing specialists, purchasing agents, and managers.

WHAT YOU WILL LEARN
You'll find out how to determine which data you need, which mathematical formulas to use, and which cost, price, and quality factors you must consider.
You'll analyze purchase history records, forecast price and market trends, determine total costs of ownership, analyze fixed and variable costs, conduct best-buy analyses, and utilize financial statement analyses of prospective suppliers for qualification of bidders.
You'll also learn how learning curves, break-even analysis, target costing, and life cycle costing can help you make far more accurate estimates of cost and value.
The information is not only useful to establish cost improvements, but also to determine which purchasing techniques, i.e., value analysis, negotiation, purchase agreements, are the greatest contributors to cost improvements. The information may also be used to determine which types of goods and services are sensitive to various purchasing techniques and whether or not individual buyers are more or less effective in negotiating agreements. Successful purchasing and procurement depend on good buys, while good buys result from good analysis techniques.
This seminar emphasizes applications and practical ways to help you on the job and to put your new-found knowledge to work for your organization. Purchasing and supplier management are changing dramatically. New approaches and methods offer opportunities to cut costs, reduce waste, avoid non-value added activities, and increase the chance to buy at the lowest overall cost for the best value. Plan to attend this exciting seminar, Maximizing Purchasing Power, to find out how these positive results can be yours.
Please bring a portable calculator or PDA to the course.
Throughout the program you will work out challenging situations through various exercises, under the tutelage of your instructor.

THE 12 KEY BENEFITS OF ATTENDING THIS
SEMINAR
Your CATTAN seminar leader will walk you, step by step, through scores of actual purchase decisions. You'll become practiced in the techniques you need to:
1. Evaluate any purchase using the appropriate mathematical formulas.
2. Realize the importance of price-cost information sources.
3. Identify the “best buy” for a given purchase through price and cost investigation.
4. Negotiate total cost of ownership more effectively with supplier and contractors.
5. Use forecasting and trend analysis techniques to better understand future market conditions.
6. Improve inventory management using Economic Order and Purchase Quantity techniques.
7. Show a measurable contribution to the bottom line due to more effective purchasing decisions and a deeper understanding of the economics of the marketplace.
8. Improve the return on investment from every purchasing dollar and your total spend.
9. Gain a working knowledge of the methods, techniques, and formulas for analyzing purchasing decisions.
10. Select the supplier, the product or service, and the solicitation package that best meet the organization's needs and budget.
11. Put the latest analytic tools to work—during the seminar, in small group project sessions.
12. Conduct informed negotiations with greater confidence and certainty.

ADDITIONAL BENEFITS OF ATTENDING THIS
PROGRAM

• Read a financial statement, and convert raw numbers into ratios that highlight meaningful relationships.
• Focus on different financial characteristics such as liquidity, profitability, and inventory turnover by using financial ratios.
• Understand the 8-step life cycle cost analysis procedure.
• Learn how to construct a break-even analysis chart.
• Utilize learning curve analysis and coefficients.
• Conduct make vs. buy or outsourcing acquisition decisions.
• Understand the application of payback analysis, rate of return analysis, and time-adjusted rate of return analysis in capital equipment or fixed asset purchases.
• Examine target costing techniques and target pricing tools.

MAXIMIZING PURCHASING POWER:
TECHNIQUES FOR PRICE, COST, AND TOTAL VALUE
PROGRAM AGENDA

Section 1 INTRODUCTION AND PURCHASING
ANALYTICS
• Type "O" versus Type "P" Purchasing Department
• Improve Profitability through Better Purchasing Decisions
• Power through Informed Negotiation
• Forecasting and Understanding the Marketplace
• A Quick Study in Economics and Strategic Purchasing
• Key Business Indicators and Sources

Section 2 FINANCIAL STATEMENT ANALYSIS
• How to Get Financial Statements
• Financial Reports and Understanding Them
• Financial Ratio Calculations and Performance Relationships
• Financial Statement Evaluation Categories
• Financials and Due Diligence

Section 3 PRICE ANALYSIS AND SOLICITATIONS
• Definition of Price Analysis
• Importance of Price-Cost Analysis
• Price Analysis Processes and Techniques
• Target Pricing and Market Indexes
• Types of Solicitation Packages and RFIs
• RFQ/RFB/RFP Methods of Solicitation
• Preparing and Evaluating RFQs/RFBs/RFPs
• Solicitation Do’s and Don’ts

Section 4 BEST-BUY INVESTIGATION AND
TECHNIQUES
• The Difference between Price and Cost
• Application of Discounts to Price
• Equivalent Unit Costs
• Market Basket Pricing Review
• Fixed Margin Pricing, Rate of Return Pricing, and Breakeven Analysis
• Price Escalators, Alternative Pricing Mechanisms, and Sample Language
• Service—Major Cost Elements
• International Landed Cost Optimization

Section 5 PURCHASE QUANTITY ANALYSIS AND APPLICATION
• Purchasing Manager's Decisions
• Inventory Decision Costs
• Replenishment Lead Time Components
• Economic Order and Purchase Quantity
• Order Point Systems
• MAD Formula and Service Levels
• Service Levels, Costs, and Safety Stock

Section 6 COST ANALYSIS AND BREAKDOWN
RATIONALE
• Major Cost Elements
• Sources of Price-Cost Data and Information
• Analysis of Costs
• Elements of Cost—Key Factors
• Supplier Cost Breakdown
• When to Perform Cost Analysis
• Input for a Cost Buildup and Internal Estimate
• Six Basic Elements that Affect Cost

Section 7 IMPROVEMENT AND EXPERIENCE CURVES
• The Learning Curve
• The Use of the Learning Curve in Purchasing
• When to Use the Learning Curve
• Using Learning Curve Coefficients

Section 8 TOTAL COST OF OWNERSHIP (TCO) PROCESS RATIONALE
• Priceberg and TCO
• Typical Supplier Cost and Price Structure
• TCO versus Total System Cost
• TCOP Report
• Supply Base Management Costs
• Supplier Cost of Ownership—Assessment
• Activity Based Costing-TCO Impact

Section 9 EXAMINATION OF TARGET COSTING AND TARGET PRICING
• Target Costing Process
• Target Cost Breakdown and Impact
• Target Costing Techniques and Tools
• Identification of Areas to Improve
• Target Pricing and Cost Model Example

Section 10 BREAK-EVEN ANALYSIS AND USAGE
• Why Do Break-Even Analysis?
• Constructing a Break-Even Chart
• Computing Sales Value Only
• More Reasons for Using Break-Even Analysis
• Break-Even Analysis Tips

Section 11 MAKE-OR-BUY ANALYSIS AND OUTSOURCING DECISIONS
• How Make-or-Buy Investigations Originate
• Make versus Buy Analysis
• Cost and Resource Analysis in Make-or-Buy Decisions
• Reasons for Outsourcing
• Types of Unit Rate Structures
• Financial Terminology Applicable to Outsourcing

Section 12 FIXED ASSET ACQUISITION AND CAPITAL EQUIPMENT BUYING
• Life Cycle Cost and TCO Calculations
• Capital Equipment Total Cost Analysis Procedure
• Buy, Rent, Lease—Comparative Analysis
• Payback Analysis and Rate of Return
• The Present Value Concept
• Recommended Reading

This seminar will be held at the Suburban Golf Club, Union, NJ. See driving directions on page 14.

This seminar will be held at the Suburban Golf Club, Union, NJ. See driving directions