Introduction
A purchasing organization for allied building materials suppliers would like to have more insight into the Bill Of Material, including the corresponding price changes.
Both Private Label and brand suppliers have had and are still having substantial discussions about price increases recently.
Approach with WTP
Using the BOM (Bill Of Material) form as a starting point, we helped the client request correct data from several Private Label suppliers and incorporate it into product calculations.
This provided insight into the raw material ratio of the private labels. And thus into the cost drivers and should-cost of this assortment.
Concrete results
The purchasing organization has taken the BOM form as the basis for product entry into the system. For all private-label products, the BOM form is sent to suppliers.
With the private label suppliers and the coming annual discussions, these outcomes from the WTP calculations will be used as a guideline.
Last but not least, the insights from the private label calculations are also used with the A-brand suppliers to discuss price levels and price changes.
