Price Negotiation and Cost Saving – Standard Operating Procedure

1) Purpose

To establish guidelines for conducting effective price negotiations with suppliers and implementing cost-saving initiatives within the pharmaceutical purchase department.

2) Scope

This SOP applies to all procurement activities involving price negotiation, supplier agreements, and cost-saving strategies.

3) Responsibilities

Procurement Manager: Responsible for overseeing price negotiations and cost-saving initiatives.
Procurement Team: Responsible for executing price negotiations and identifying opportunities for cost reduction.

4) Procedure

4.1) Supplier Evaluation:
4.1.1) Evaluate potential suppliers based on quality, reliability, pricing, and terms.
4.1.2) Prioritize suppliers that offer competitive pricing and align with organizational goals.

4.2) Market Analysis:
4.2.1) Conduct market research to understand pricing trends, market conditions, and competitive landscape.
4.2.2) Identify benchmarks and leverage market insights during price negotiations.

4.3) Negotiation Strategy:
4.3.1) Develop a negotiation strategy based on supplier capabilities, volume requirements, and cost-saving opportunities.
4.3.2) Set negotiation objectives, including target pricing, terms, and conditions.

4.4) Negotiation Process:
4.4.1) Initiate negotiations with selected suppliers to achieve mutually beneficial agreements.
4.4.2) Discuss pricing, discounts, payment terms, and other contractual terms to optimize value.

4.5) Contract