Volatile purchasing markets also require purchasing analytics from sales colleagues
The current sharp rise in raw material and energy prices is expanding the role of purchasing controlling: supporting sales discussions with customers through precise purchasing information. But how can sales arguments be supported and improved in this regard?
The rising purchase prices of recent months in all raw material and energy-related markets are alarmingly clear in the measurement of material cost development in WebCIS 4.0, the controlling information systems from SoftconCIS. Which product groups, suppliers, or materials are affected by these massive price increases and to what extent? How much of this is due to the increasingly strong US dollar exchange rate? WebCIS 4.0 displays all price effects on the purchasing markets quickly, precisely, and comprehensibly at the touch of a button. What is effective in the income statement, and what is already visible as a carryover effect in the next year? How do purchasing planning scenarios need to be adjusted in order to assess future cost risks from best and worst case scenarios? Professional purchasing controlling based on a transparent information platform is an essential organizational foundation for every purchasing department in these times.
Volatile purchasing markets require sales action
The speed and extent of cost increases in purchasing are putting sales under enormous pressure to act. How can the cost increases in the purchasing markets, which are reflected in production costs, be clearly communicated to customers so that, in the end, there is mutual acceptance of higher sales prices? It is no longer sufficient for sales to argue for blanket price adjustments in line with general wage increases. Customers demand detailed, transparent calculations showing which cost drivers influence which products. This means that sales faces the same problem as purchasing: fast, comprehensible measurements of cost developments as they result from accounts payable postings. However, it is not enough to refer to general price indices for the entire product range. No, customers expect proof for their products of how raw materials, energy, transport, and personnel costs have developed and what the future expectations are on the purchasing markets.
Transparency of purchasing also in the sales bill of materials
With WebCIS 4.0, all requirements from both a purchasing and sales perspective are already met. For purchasing, the following applies: All conceivable measurements of price changes, whether rolling, as a comparison with a specific date, in the transition to calculation prices, in retrospect, or as scenario-based planning, are important for purchasing decisions. For sales, the following applies: All purchased materials must be maintained in the bill of material structure with their usage quantities. This allows the entire purchasing spectrum, including all price changes and influencing factors, to be transparently displayed in aggregate form on the bill of material header. This is an indispensable source of information for sales meetings. It is the only way to show each customer exactly how the current raw material and energy markets are affecting their product range.
Sales questions and answers at the touch of a button
Enriched with information such as monthly sales volumes and sales prices, WebCIS 4.0 can now answer questions at the touch of a button, such as:
› Are the changes in sales prices in line with the changes in purchase prices?
› What minimum price adjustments must be achieved in sales to offset the cost increases in the raw material, energy, and transport markets?
› What price expectations are evident in planning scenarios and how should sales respond to them?
In summary, it can be said that an analytical view of the volatile developments in the purchasing markets is of existential importance for sales discussions with customers in many companies. Sales staff must consider how to incorporate purchasing price and cost analyses into their arguments. Those who have information transparency at their fingertips are in a good position.
“Purchasing without purchasing control is like flying a plane without a cockpit,” says Werner Güntner, Managing Director of SoftconCIS.
