For many companies, fluctuating commodity prices and the resulting uncertainties when it comes to financial planning are among the most serious commercial risks. FACTON EPC enables them to keep track of volatile commodity prices in an efficient and transparent manner. Through price simulations and comparisons, as well as scenarios, they are in a position to adjust their quoted product prices as necessary.
For many companies, fluctuating commodity prices and the resulting uncertainties when it comes to financial planning are among the most serious commercial risks. Manufacturers who use large quantities of a certain material in their production (e.g. foundries) or who make products that contain materials subject to high price volatility (e.g. aluminium, rare compounds) are affected more than others. FACTON EPC assists companies in evaluating the effect of fluctuations in the price of materials and the simulation of commodity price changes.
Unless a company knows exactly how such changes affect its current product costing, it is at a huge disadvantage when it comes to negotiating with suppliers and customers. As a consequence, it might not be able to invoice certain extra charges at a later stage, or adjust its monthly invoices to compensate for increases in material costs. Knowing the effect of commodity price fluctuations on the production costs is particularly important for suppliers that operate in a "sandwich position".
FACTON EPC allows for the transparent tracking of market price fluctuations of materials and commodities, and subsequent scenario simulation for the adjustment of quoted product prices.
The standard module that comes with FACTON EPC enables companies to simulate the effects of material price increases and commodity prices in their costings, doing away with the manual updating of such charges for each manufactured part. At the push of a button, they can, for example, analyse deviations between agreed material prices from any costing scenario with the actual prices charged by suppliers or commodity traders. Armed with this information, they will be able to renegotiate prices.
For companies that are aware of their exposure to volatile commodity prices and who wish to include clauses in contracts with suppliers and customers that protect them against the impact, FACTON EPC is an indispensable tool to minimise the risk in relation to offers and long-term delivery contracts.