Take full advantage of the Bill of Material (BoM)
A purchasing organization in the building materials sector used WTP and Bill of Material data to gain insight into the true cost drivers behind private label products. By analyzing raw materials and product cost structures, the company established a fact-based framework for discussing price levels and price increases with both private label and A-brand suppliers. The BoM approach has now become a standard part of supplier collaboration and annual negotiations.
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 a number of 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
he 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, the coming annual discussions, these outcomes from the WTP calculations will be used as a guideline.
And 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.
Do you have a use case involving WTP?
If so, please share it with our Customer Success team! In that way, we can motivate and inspire each other.