Supplier prices keep changing
Track price changes and their effect on costing and margins.
01 · What is usually happening?
A supplier raises the price between the quote and the delivery, or between two orders for the same item. Purchase finds out when the invoice arrives.
Sales has already quoted the customer at the old cost, so the margin quietly disappears.
The question people usually ask“Why did the price change?”
The more useful question“Which items moved, by how much, and which quotes does that put at risk?”
02 · Common causes
- 01Prices are agreed on a call and not written
- 02Rates are not compared with the last order at the time of PO
- 03Sales quotes from an old cost sheet
- 04There is no review of the rates of the top materials
- 05Market movements are noticed late
- 06Price changes are not shared with sales and planning
03 · What to check now0 of 6 checked
04 · What good looks like
- 01The price is written on every PO.
- 02A new price is compared with the last one before it is accepted.
- 03Top materials are reviewed every month.
- 04Sales sees cost changes the same week.
- 05Open quotes are checked when a cost moves.
05 · Where this connects
This rarely stays in one department
What it can lead to: Margin on orders already quoted is lost without anyone deciding to lose it.
Start from a problem
Work flows left to right, top to bottomKEYMost important for manufacturing
These support every part of the business
Problem
Supplier prices keep changing
Usually connected to
How it spreads
- Purchasing & Suppliers
What it can lead to: Margin on orders already quoted is lost without anyone deciding to lose it.
lamplamp could compare each invoice price with the PO and the last order.
06 · Related processesPurchase requirement to material received
08 · lamp
lamp could keep this moving
lamp is not available yet. These are things it is being built to do.
- lamp could compare each invoice price with the PO and the last order.
- lamp could list the open quotes that a cost change puts at risk.
- lamp could tell sales when a key material moves.
- lamp could show the monthly price trend for your top materials.
Does your business handle this differently?Tell us what we have missed: a cause, a check, or a better way of handling it.
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