In this use case cost administrators can automate the execution of supplier cost updates with necessary approval workflow bringing numerous advantages to businesses, like saving a significant amount of time and effort spent on manual data entry and approval processes, minimizing errors and ensuring accuracy in cost updates while enhancing transparency and accountability by providing a clear audit trail of all cost updates and approvals.
Use Case Situation Description
User Role:
Cost Administrator
Business Objective:
Supplier cost updates are passed by way of a Distribution Price Book and are commonly referred to as DBC or Distri Book Cost. These costs are passed at the supplier's discretion and normally passed on a specific cadence (monthly, quarterly, semiannual, annual). As a Distributor, you may have inventory on your shelf that was purchased over time at several different costs and there is a need to blend the actual cost to come to a static cost by which the margin can be calculated.
Complication:
· Cost changes can happen frequently.
· Cost changes can occur outside of normal cadence due to market conditions, transportation cost changes or other factors.
Capability Needed:
· Ability to use a blended cost that takes into account inventory currently on shelf.
· Real-time pricing updates based on new cost input triggers and recalculation logic
· Connection to ERP or other system to execute price change based on new Distri Book Cost.
Benefit:
· Increased efficiency with automatic update of DBC (Distri Book Cost)
· Increase accuracy of blended cost via automation and process simplification
· Increased margin with accurate blended inventory cost
· Reduced margin compression with reduction in manual errors in figuring and implementing adjustments for logistics costs.
KPI:
· Reduction of cost exceptions from supplier.
· Increased margin based on accuracy of blended cost
· Efficiency and error reduction: cost of manual errors, process costs