We buy the same item at different rates

The purchase manager usually hears about this through a phone call or a last-minute request. No rate history, each buyer negotiates alone. A usable fix starts with evidence and one person accountable for the next decision.

What it looks like

• The purchase manager has to search the purchase order and goods receipt file before answering a routine question.
• No rate history, each buyer negotiates alone.
• Staff cannot locate the acknowledged PO and goods receipt note for the latest case.
• People spot the gap after a production need is discovered after the supplier can no longer deliver on time.
• The open case has no documented owner, due date or proof of closure.

Why it happens

The specific failure is left unchecked. No rate history, each buyer negotiates alone. If there is no recorded owner for that condition, the effect travels to the next team.

The work and its evidence move separately. Supplier calls and PO records often show different promised dates or conditions. Purchase cannot act early on an unconfirmed commitment.

A later hand-off exposes the gap. The store, buyer and production planner may each keep a different view of incoming material and its priority.

The less obvious cause: A control may exist on paper but still fail in practice. Test whether someone actually performs this check: check whether freight, tax and payment terms explain apparent differences.

Find the first failed hand-off before changing staff targets. A completed register alone cannot prove that physical work happened.

What to check first

1. Compare invoice rates for the same grade and unit across recent vendors. Compare dates, quantities and references. Mark an unconfirmed difference as unverified. Finish the first pass in under 30 minutes and name the missing source if needed.
2. Check whether freight, tax and payment terms explain apparent differences. Record the affected item or party and the person who can verify the detail. Finish the first pass in under 30 minutes and name the missing source if needed.
3. Review who accepted rate changes and which quotations were current. Mark each exception open, waiting for evidence or resolved, with a named next owner. Finish the first pass in under 30 minutes and name the missing source if needed.

How to fix it

1. Start with one live case. Compare invoice rates for the same grade and unit across recent vendors. Keep the source reference before changing the record.
2. Make the control explicit. Keep a dated item-rate history including landed cost. Put the rule in the register or sheet that staff already use.
3. Set a second guardrail. Review price variance before approving repeat orders. Confirm the exact grade, rate, quantity and due date before asking a supplier to change a commitment.
4. Assign the next decision. The purchase manager records the action and its due date. A separately authorised person signs off changes affecting money, safety or customer terms.
5. Review the open list. Start with items affecting today or tomorrow. Keep third-party commitments separate from completed actions.
6. Check whether the rule holds. For four weeks, count open purchase lines with no reliable promised date or unresolved difference. Reopen repeat cases and identify where the control failed.

Copy this supplier commitment and exception register into a register or sheet:

Retain the source reference and limit access to authorised staff.

A worked example

Illustrative example only. A fabrication unit pays ₹74 and ₹83 per kilogram for the same grade on separate POs. Start by locating the source that would verify these amounts or quantities. The purchase manager records the exact exception, gives it an owner and checks the next relevant event. This example shows how to structure the decision. It does not claim that a business achieved a saving or avoided a loss.

How you know it is fixed

• Completeness: Count open purchase lines with no reliable promised date or unresolved difference at the same time every week. Record the count and the oldest item, rather than just saying things are better.
• Timeliness: Check whether the assigned person took the next action before the agreed cut-off. Keep missed dates visible instead of replacing them silently.
• Proof of closure: Sample three closed cases and locate the acknowledged PO and goods receipt note. A tick without supporting evidence is still an open control gap.

When it is more serious

Unexplained variances suggest fraud or sustained pricing errors. Hold irreversible decisions until the material facts are verified. For contracts, tax, wages or legal rights, retain source documents and consult a qualified adviser. Repeated exceptions after four reviews may require changing the control.

This works if someone does it every day. In most businesses, that someone is you.

Questions people ask

What should we check before taking action?

Compare invoice rates for the same grade and unit across recent vendors. Keep its date and reference. Then compare it with the acknowledged PO and goods receipt note; if they disagree, record the difference before changing either one.

Who should own the next action?

The purchase manager should own the open item. The person authorised to change money, a technical standard or a customer commitment must still approve that decision.

Can we run this control without new software?

No. Start with a shared sheet or register containing the reference, owner, promised date, status and evidence. Once those fields are reliable, decide whether a system connection is worth setting up.

When is the issue serious enough to escalate?

Unexplained variances suggest fraud or sustained pricing errors. Keep supporting records and get specialist help where relevant.