Mostafa Ayman

NEGOTIATIONS
This document illustrates the negotiation process, providing a detailed explanation
of most of the application’s screens. Additionally, it covers the 1-stage and 2-stage
sourcing processes. With a Detailed-Explanation for most of the Application’s
Screens
 Mostafa Ayman
Table of Contents
 What Is Sourcing? .............................................................................................................................................. 2
Create Negotiations ............................................................................................................................................... 4
1.Negotiation types ............................................................................................................................................... 4
Negotiation types .................................................................................................................................................. 5
2.Negotiation Template ......................................................................................................................................... 5
3.Negotiation Style ................................................................................................................................................ 6
Negotiation creation ........................................................................................................................................... 8
1-Cover Page ...................................................................................................................................................... 8
2-Overview ........................................................................................................................................................ 9
2-2 Schedule Controls: ..................................................................................................................................... 10
2-4 Requirements ............................................................................................................................................. 12
2-5 Line Control ................................................................................................................................................ 13
2-6 Response controls: ..................................................................................................................................... 14
2-7 Collaboration Team .................................................................................................................................... 15
2-8Abstract....................................................................................................................................................... 16
3-Rrequirments.................................................................................................................................................... 17
4- lines ............................................................................................................................................................... 22
5- Suppliers .......................................................................................................................................................... 24
 Mostafa Ayman

Negotiations
 What Is Sourcing?
 The process of identifying and evaluating suppliers of goods or services,
and selecting the most appropriate supplier.

 What are the Benefits of Sourcing?

 It allows them to negotiate the best price and quality of the purchase.
 The sourcing team helps ensure that chosen suppliers maintain a
high level of performance.
 Sourcing specialists ensure that if the primary suppliers face problems
and cannot fulfill the contract requirements, alternative providers can
replace the main ones.

 Fundamentals of sourcing
-Supplier selection:
 This involves identifying potential suppliers and evaluating them based on
factors such as quality, cost, delivery, and other criteria.
-Negotiation:
 This involves negotiating terms and conditions with suppliers, including
pricing, delivery, and other terms of the relationship.
- Contract management:
 This involves managing the relationship with suppliers and vendors, including
the creation and maintenance of contracts, the monitoring of performance,
and the resolution of any issues that may arise.
-Supplier relationship management:
 This involves building and maintaining strong, productive relationships with
suppliers, which can help to ensure the long-term success of the sourcing
relationship.

Overall, the fundamentals of sourcing involve a range of activities that are

designed to identify and select the most suitable suppliers and vendors for
an organization, and to manage those relationships effectively to achieve
 Mostafa Ayman
desired outcomes.

 Important Roles for sourcing

1. Category manager
ORA_PON_CATEGORY_MANAGER_JOB

 For Creation, management, and award of negotiations.

2. Supplier Bidder
ORA_PON_SUPPLIER_BIDDER_ABSTRACT

 Management of negotiation responses

3. Sourcing Project Collaborator

ORA_PON_SOURCING_PROJECT_COLLABORATOR_ABSTRACT
 Collaboration with the creation, management, and award of negotiations.
 Enabling a subset of functions performed by category managers
 Mostafa Ayman

Create Negotiations:

1.Negotiation types
An organization can send potential suppliers a (RFI), (RFQ) or (Auction):
I. Auction
 Imagine that a manufacturer of automotive parts is looking to sell a
large machine that he doesn't need anymore.
 Rather than selling it through a traditional process, the
manufacturer decides to hold an auction, So Potential buyers can
participate.
 When the auction is over, the manufacturer will sell the parts to the
highest bidder
II. RFI: stands for "Request for information”:
 it’s a document or a process used to gather information from many
suppliers. to narrow down the list of potential suppliers, before
committing to a Request for Proposal or Request for Quotation.
 An RFI includes a list of specific questions or topics that the company
would like to know more about.
 The purpose of an RFI is to gather information about a particular
product, service, to see if it will meet the needs
 Mostafa Ayman

III. RFQ stands for "Request for Quotation”

 RFQ is a document that an organization submits to one or more

potential suppliers eliciting quotations for a product or service
 IT enable buyers to collect quotes from suppliers for complex and hard to
define items or services, such as made-to-order manufacturing or construction
projects. The RFQ process is generally the longest of the negotiation processes.

Negotiation types

RFQ Can be One-stage or Two-Stage

 Standard (One-stage):
 Technical proposals are submitted and evaluated.

 Two-Stage:
 Stage 1: Technical proposals are submitted and evaluated.
 Stage 2: Shortlisted suppliers submit commercial quotations.
 Ensures both technical capabilities and commercial terms are met.
 Use Case: Complex projects, high-value procurements requiring detailed
assessment

2.Negotiation Template
 Negotiation Template provides default data for many attributes, for
example addresses or invited suppliers.
 You still can modify some of these attributes when creating the new
negotiation document.
 Mostafa Ayman
 To access and use a Template, you must have access to the
Procurement Business Unit under which the template was created

3.Negotiation Style
 You can use a negotiation style to control the look of the document, and
change Document Display Label.
 You can Enable or Disable Some Features, such as proxy bidding,
terms instructions.
 Mostafa Ayman
To Edit Styles:
Setup and Maintenance >> Offering: Procurement >> Functional Area: Sourcing >>
Task Manage Negotiation style
 Mostafa Ayman
On Our Example we will create 2 stage RFQ in details

Negotiation creation

1- Cover Page

 Cover page is optional, it’s like a word document, you can edit it as you like
 You also can insert variables:
To represent values that are used throughout the document which will
be entered at a later point during document creation or modified at any
 Mostafa Ayman
time, to ensure that values are always synchronized

2-Overview
Divided into
 Header
 Tabs (General, Terms, Collaboration Team, Project Tasks, Abstract)
 Mostafa Ayman

2-2 Schedule Controls:

Control the negotiation timeline.

 Preview Dates:
• During the preview stage, suppliers can view the negotiation
but not enter any responses.
• You can choose to Preview the negotiation immediately as
soon as it’s published or set a preview date.
 Open Dates:
• You can choose to Open the negotiation immediately
as soon as it’s published or set a Future date.
• On this date, Negotiation will be opened for responding.
 Close Date:
• You must specify a close date.
• Once it’s reached, no more responses are accepted.
 Award Date:
• You can specify an award date, but it is just information for the
suppliers and Application will not enforce this date.
• You can award the negotiation at any time after closing it.
 Mostafa Ayman

2-3 Negotiation controls:

● Response visibility:
Response visibility controls when suppliers can see information
from competing responses.
● Open:
Supplier can see the response information of other suppliers, while the
negotiation is active.
● Blind:
Suppliers can only see the best bid value (if allowed).
It’s a checkbox ☑ Display best price in blind Negotiations in Configure
Procurement Business Function Task.
● Sealed:
• Buyers cannot see any responses until they are unlocked.
• Suppliers cannot see any response information of other suppliers,
until the responses are unsealed.

● Negotiation layout / Response layout / Contract terms layout:

Control the general appearance of the document for printing
 Mostafa Ayman

2-4 Requirements
Requirements are questions presented to participating suppliers to get
the important information which the company needs.
● You can use questions and qualification areas that have been defined
in Oracle Supplier Qualification as requirements.
Supplier responses to requirements can be assigned scores for use when
evaluating among competing responses.

● Enable weights:
○ If Enabled, Negotiation Requirements will be weighted also.
● Display scoring criteria to suppliers:
○ If Enabled, Suppliers will be able to see the Scoring criteria which was
made by the negotiation creator.
● Default maximum score:
○ The highest score value that any supplier can get.
○ it’s just a default, and can be overridden when creating the
actual requirement.
● Enable team scoring:
○ A user with a role of “Category managers” can add other
members to collaborate in the Negotiations, they will be called
Collaboration Team.
■ Once a negotiation is closed and the scoring phase is opened and set to
manually scoring, The Category manager can choose members of
Collaboration Team to be at Scoring Team.
○ They will be assigned to specific responses to score, and can’t view any
other response.
○
 Mostafa Ayman
2-5 Line Control
You use the line control section to specify whether price tiering is available
for the negotiation lines. You also specify how line rank is calculated and
indicated.
● Price tiers:
The available price tiers depend on the negotiation outcome.
If the outcome is a standard purchase order, you can only use
Quantity-Based price tiers.
If the outcome is a blanket purchase agreement, you can use either
Quantity-Based or Price Break.
If you select none, you cannot create any price tier.

● Rank indicator:
Select how Ranking will be displayed.
Best or trailing: Only the Best is Shown
1,2,3: Numeric Ranking (1-3).
○ No Indicator: No Ranking Shown.
 Ranking Method
Supplier Response is ranked using the price
alone.
 Multi attribute Scoring:
You can Add Line Attributes to score them.
If this option Enabled, Responses to line attributes are also used when
evaluating response rank.
If disabled, you cannot score line attributes.

● Allow Alternate Lines:

● Each line in the negotiation, Supplier can put a response to it.
If Yes, Supplier can respond with an additional line.
● To suggest alternate responses such as a different price
breaks, cost factors, or different UOM.
● The category manager can award business to one of these lines.
 Mostafa Ayman
2-6 Response controls:
- Control which application features are available to the supplier, and how
supplier responses are handled.

1-Restrict to invited suppliers:

If enabled, only the suppliers which were included on the invitation list
can participate.
● They can be added through invitation list in the supplier
if not enabled, no restrictions happen.
Any supplier can search for Open Negotiation that’s associated with a
business unit he has access to.
He can access the negotiation and place a response.
2-Allow suppliers to select lines on which to respond:
Example, if there’s a large negotiation with many lines covering many
different product types.
If Enabled, Supplier will be able to respond only to the items lines
he provides.
If Disabled, He will have to respond to all lines.
 Mostafa Ayman
3-Allowing Multiple Responses Per Round
Every Supplier is allowed to have a single response per round.
If Enabled, Supplier can submit multiple responses within the same round.
Supplier can be forced to submit a response that is:
 Lower than the supplier's last response.
 Lower than the current best price.
4-Displaying the Best Price to suppliers:
In a blind negotiation that allows multiple responses within the same
round, it will be a good idea to display the best price, so the supplier
knows how much to reduce the response price to become competitive
again.
If Enabled, This can be done.
5-Display Transformed Amount to Suppliers:
Suppliers may be qualified but may have some hidden costs such as
logistics cost due to supplier location, This is considered as internal costs.
6-Transformed amount is the sum of the response amount and these
internal cost factors.
If Enabled, Suppliers can see this Transformed Amount.
If Disabled, Supplier sees no adjustment to the bid amount.
■ But it will still be calculated, and Supplier Rank will be based on it.

 2-7 Collaboration Team

 A user with a role of “Category managers” can add other members to
participate in the Negotiations, these members are called
Collaboration Team.
 With giving this member Full access or scoring only or view only.
 They can have access to do actions over the entire life of the
sourcing, This can include documents from the initial creation
through the award process.
 Mostafa Ayman

2-8 Abstract
● Abstracts are negotiation summaries that you post on your external
website for suppliers.
( ‫)صفحة االبستراكت صفحة مفتوحة يقدر اي حد يخش يشوفها م الزم يكون ليه يوزر علي السيستم‬
● Suppliers then can read information about negotiations without having
to log in to the application to view information.
○ During the negotiation open period to inform suppliers about the
negotiation and how to participate.
○ After negotiation is awarded to publish an award notice to an external
web site.
● The Synopsis field where the negotiation is described, is what
suppliers see when they view the negotiation abstract.
● It’s just a checkbox named ☑ Abstract , We Can Enable it from Task-
Manage Negotiation Styles
Then a New tab called Abstract will Show up.
 Mostafa Ayman
Then from Configure Procurement Business Function Task, select: Configure

Abstract listing
VV

FROM MORE DETAILS ANYONE CAN SEE NEGOTIATION PDF

 Mostafa Ayman

3-Rrequirments
 These are Questions to the supplier, to ask for more information about the
company itself
 Who can answer this?
Supplier himself or The Collaboration Team Members.

● Examples of requirements might be:

- The number of years the supplier has been in business.
 Mostafa Ayman
- The supplier's business structure (public or private).

1- Evaluation stage
Technical: refers to first stage or one stage
Commercial: refers to 2nd stage or stage 2
Requirement

For Multiple choice Value:

● We can add another Question to be asked if the supplier chooses it.
● We can Set it as a target Value, and Choose to Display target to the
supplier or not.
 Mostafa Ayman
For Text Value:

● Maximum Score:
○ It’s The highest value which a supplier can get, when scoring his responses.

● Response:
○ Optional: Suppliers do not have to respond.
○ Required: Suppliers must reply.
○ Display only: Suppliers can view but do not have to respond.
○ Internal: for The Collaboration Team to view and score.

● Weight:
○ The Sum of All Requirements must Equal 100.
○ If weights are not Enabled, the application uses the maximum score
field to limit the maximum score allowed for each requirement.

● Score:
○ For Automatic Scoring, We have to Add Values and score every single one.
○ For Manual Scoring, We must specify a maximum score, if there is no
default.

● Knockout Score:
○ A minimum score that all responses must meet or surpass, Otherwise
the supplier won't be qualified.
● Calculating Score For Each Requirement=
𝑆𝑐𝑜𝑟𝑒
○ 𝑅𝑒𝑞𝑢𝑖𝑟𝑒𝑚𝑒𝑛𝑡 𝑊𝑒𝑖𝑔ℎ𝑡 *
 Mostafa Ayman
𝑀𝑎𝑥𝑖𝑚𝑢𝑚 𝑆𝑐𝑜𝑟𝑒

● If the Requirement Type is Multiple choice with multiple selections:

Evaluation For two stage RFQs, requirements can be defined to a technical requirement section or a commercial requirement section.
Stage

Requirements in the technical section are unlocked, unsealed, viewed and scored during the technical evaluation stage.

Requirements in the commercial section are unlocked, unsealed, viewed, and scored during the commercial stage. The requirements
in the commercial section cannot be unlocked until the technical evaluation stage is completed.
 Mostafa Ayman
4- lines

● Here you describe the items and services you want to purchase.
● Required Fields vary depending on the Negotiation Outcome.
Start Price: the Price at which responses to the negotiation should begin.
Suppliers will be forced to enter a price lower than the Start Price value.

● Current Price:
When you enter the current price, The Application Will calculate the savings.
It will be useful later when analyzing competing responses.
● Allow Alternate Lines:
Allows the supplier to respond to the original line, and be able to add an
Extra line to suggest more information such as a different set of price
breaks, cost factors, or UOM.
● Manage Default Lines Details
 Mostafa Ayman
Negotiations Line Attributes:
● You can make Negotiation more detailed, In Negotiations Lines you
ask for more information.
● We can also Enable Weight for Every Attribute, but Multi attribute
Scoring Must be Enabled.
● Line Attributes weight is Separated from Requirement Weights, So
Each one of them must equal 100, but at the end they will be
calculated together to get the overall score.
There’s no Manual Scoring here, So we have to Add a list of values
from which the supplier can select, other than that list isn’t
accepted.

Cost Factors:
 Identify additional costs which may be associated with the item or
service, Such as customs duties, storage, or transportation.
 You can identify these costs with your negotiation line and
include supplier responses into the total cost of the line when
analyzing responses.
 In Overview, if internal cost factors Disabled, Cost Factors will show up
in manage lines but it won’t be added to the new line.
 If the outcome is a Purchase Agreement, You can use price breaks and
price tiers to negotiate pricing structures.
 Mostafa Ayman
5- Suppliers

● You can select an existing supplier, or Register a new one.

● If you choose supplier contacts that have an active user and access to
the supplier portal, he can create and submit their responses.
○ He will get notifications with information about the
negotiation and are invited to participate.
○ If the response control: Restrict to invited suppliers is
enabled, only suppliers on the invitation list can
participate.
○ If you select a supplier site, then for that supplier, only contacts
registered for that site can view and participate in the
negotiation.

6-Review