for transparent purchased parts price analyses at the push of a button
To succeed in price negotiations with suppliers, buyers need to back up their position with facts and figures, meeting their partners on an equal footing. Careful preparation ahead of such meetings is particularly important for high-cost parts. Ideally, the purchasing department should be familiar with the relevant price structures, based on detailed purchased parts price analysis runs in advance of the negotiations. Such cost analyses are essential for open book negotiations that bring transparency to the table, as both parties can make their case backed up by facts and figures. With FACTON EPC and FACTON EPC Content, companies can run purchased parts price analyses to bring transparency and openness to the negotiating table.
What is the maximum price we can pay for a purchased part? Is the quoted price justified? – Fact-based answers to these questions are crucial for successful negotiations. The times when comparable market prices served as a benchmark are long gone. With FACTON EPC, purchasing departments have access to accurate price information and cost analyses that can be understood by everybody without the need for specialist technical knowledge. Such evaluations are particularly important for expensive parts where the price has a significant impact on the cost of goods sold (COGS) and the return on sales (RoS).
Successful negotiations based on facts and figures with FACTON EPC purchased parts price analysis
With FACTON EPC and FACTON EPC Content, companies can run purchased parts price analyses to bring transparency and openness to the negotiating table. The cost analyses are based on calculations along the BoM structure and take into account production processes, once-off and exceptional expenses as well as detailed overheads.
Each cost parameter is separately evaluated by the cycle time calculator that comes with the FACTON EPC software. FACTON Content enables operators to include material prices, the cost of production processes, other expenses and overhead costs in the calculations, maintaining transparency.
Software for both technical experts and non-technicians
Thanks to the well-structured system behind FACTON EPC, such purchased parts price analyses are not the reserve of technical experts. Employees with limited technical knowledge are able to compile and interpret the data, and calculate best-practice prices by means of a user-friendly cycle time calculator. Fast and precise cost analyses thus become available to all staff members who need them.
Cooperation with suppliers
For suppliers, the best-practice price serves as the target price. When both parties have access to accurate and transparent information regarding cost drivers and other cost-relevant factors, they are in a position to meet in workshops to define offer prices and identify actions aimed at reducing costs on both sides. Such workshops often reveal that suppliers are themselves unaware of their cost weaknesses at corporate, product, or process levels. In cooperation between the buyer and the supplier, such weaknesses can be eliminated to the benefit of both parties.
In order to ensure that meetings with suppliers lead to long-term agreements that are favourable to both parties, having detailed costing figures for parts at hand is a highly recommended strategy. Proper validation and transparency of the cost analyses are the crucial factors here. FACTON EPC assists users to ensure that the submitted analyses meet these criteria and provide an accurate picture of the costing structures.