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Ask any executive what they want their salespeople to do, and it's invariably to sell value - read, generate profitable sales. Ask that same executive what they charter their buyers to do, and they'll tell you it's to cut costs. Therein lies the dilemma: Two directly opposite philosophies at the negotiating table, creating a huge business obstacle. That obstacle is the buyer, whose sole marching order is to cut cost at purchase, not to value the deal. From a buyer's perspective, if the person signing your check gives you price-slashing working parameters, that's what you do - no matter what it costs.
The end state is that the supplier cuts corners and delivers poor quality to make a profit, or goes out of business because they can't make a profit. Either way, the buyer ultimately loses.
To fix a problem, the cause must be understood. Buyers are given simple orders - cut costs. Worse yet, they are given a fixed objective - say, cut costs by 10 percent. There are many things fundamentally wrong here.
* The implied end state is to cut costs.
* By fixating on price, there is no pre-sale qualification process to investigate the vendor's businessworthiness. Is there a list of references proving the supplier's ability to commit to what was promised when it was promised?
* The buyer has absolutely no leeway to think outside the box
* maybe a vendor has a product that is actually 10% higher in price, but reduces production costs by 12% and returns by another 30%, while providing a means of turning inventory two times faster. Custer was offered a Catling gun (and didn't take it) before making his last stand.
* Some vendors, fearful of losing the account, will actually drop the price by 10% - even if it becomes unprofitable. Once a few vendors participate, everyone else had better get on board. And the quality...