Regaining Competitive Bids Brings New Life to Hoffman Engineering

Purchasing teams up with Human Resources to "Close the Back Door"

According to the Purchasing Department, leaving money on the table was fast becoming a way of life at Hoffman Engineering. Before any bid found its way to Purchasing, it was a "done deal" thanks to valuable information that Hoffman's own employees had provided the supplier's salesperson without understanding how it would undermine the company's bargaining position. It was only after the company regained the capability to obtain competitive bids that a healthy cost savings pumped new life into the bottom line.

Hoffman's "shot in the arm" was a team approach to buying and a unique training program by Benedict Negotiating Seminars. The program teaches participants how to deal with the concept of "Back Door Selling," a subtle fact-seeking process used by highly skilled salespeople to build a supplier's leverage and divide the Engineering and Purchasing Departments. Developed by Robert Benedict, a national negotiating specialist, the workshop evens up the training between these salespeople and a company's engineers and other non-purchasing staff.

"Bob Benedict identified the situation we were having, gave it a name and offered a highly workable solution," according to Betty Jackson from Hoffman's Human Resources Development (HRD) Department. Jackson and two Purchasing employees attended the "Train the Trainer Workshop." She then took a "top-down" strategy by first presenting the program to management, after which the department heads suggested that all their employees take the course.

The "How to Prevent Back Door Selling" program was sponsored by the Purchasing Department, which was concerned about being reduced to issuing purchase orders rather than negotiating the best deal for the company. However, the HRD Department also played a major role in the planning and implementation of various sessions to ensure cross-company teamwork. Participants have included employees from these Hoffman departments: production, information technology, sales and marketing, finance, human resources, shipping and receiving, and maintenance.

"We've realized that all of us have to be sensitive about how easy it is to innocently or inadvertently give out information that can be improperly used when making a deal," stressed Mary Riches Taylor of Hoffman's Purchasing Department. By working together more efficiently, the company has discovered that information is a powerful bargaining chip to use (or lose) before a bid reaches the negotiation table.

There's more from Lockheed Martin and Dean Foods about the effectiveness of the "How to Prevent Back Door Selling" program. Many others have comments about this seminar, too.