Walk into the negotiation with a number you can defend.
For manufacturing and process buyers whose input prices move weekly while contracted rates move yearly.
Who it's for
Mid-to-large manufacturers and process businesses that buy raw materials or components against last year's benchmark, while steel, polymers, packing, or energy re-price underneath the contract.
Typically championed by
The shift
A cost engineer builds a clean-sheet for a handful of A-items once a year. It is stale within weeks. The tail never gets a number. Buyers walk into the room anchored on the supplier's quote.
The book stays current as inputs move. Buyers walk in with a defensible number, not last year's spreadsheet. The same number the negotiation used is the number AP can enforce.
How it works
A live should-cost on your item master, BOM, paid history, and the driving indices, then the same number travels into sourcing, negotiation, and contract watch. Agents recommend. Your buyer still awards and commits price.
- Step 1
Map each item to its drivers
Item master, grade, net weight, BOM, and paid history land from your ERP exports. Each item maps to the index that actually moves it, with a defined pass-through and lag.
- Step 2
Build a clean-sheet you can open
Material, conversion, freight, duty, and a margin band, each line with a source and an as-of date. No unexplained numbers.
- Step 3
Rank the recoverable gaps
Live should-cost versus contracted or PO price, ranked by rupee impact, classified as recoverable or justified.
- Step 4
Arm the event, then the human decides
The Sourcing Agent drafts the RFx, landed-cost comparison, and negotiation brief. Your buyer awards. Contract terms then watch every inbound invoice.
Modules & sub-capabilities
Spend & Category
A current view of what is spent, with whom, and where price variance or tail spend hides. Feeds which items get a should-cost first.
Live Should-Cost & Rate
Clean-sheet stack per item, material line re-priced on index ticks, full derivation a buyer can defend in the room.
Sourcing & Landed Comparison
RFx drafted from the spec. Bids normalised to landed cost against the live should-cost, not headline quotes.
Negotiation Brief
Gap by cost line, target and walk-away ranges, talking points that regenerate the morning of the meeting.
Contract Term Watch
Extracted price, rebate, and escalation terms checked against every PO and invoice. Off-contract leakage flagged before payment.
Trust & governance
A person still commits the price
The agent drafts the case and the brief. Award, price commit, and contract signature stay with your buyer.
Every line has a source
Driver, assumption, and as-of date sit on each cost line. Overrides are captured and used to calibrate the next run.
On your stack, not a new ERP
Reads item master, BOM, PO history, and index feeds you already have. Writes back only through sanctioned channels.
Proved on your baseline
Shadow-mode against a cost engineer's manual should-cost on A-items before the number is used in a live negotiation.
Agents deployed for this module
These are the named agents we deploy when Should-Cost is the production module for your business problem. Each agent is a job we deploy for you. You do not buy software and install it yourself.
Should-Cost & Rate Agent
Live should-cost you can defendA live should-cost you can defend, not last year's benchmark.
See how we deploy thisSourcing Agent
Landed-cost award, human decidesRun the event on landed cost, not headline quotes.
See how we deploy thisRelated case studies
A listed auto-components buyer walked into steel and polymer negotiations with last year's clean-sheet.
The recoverable input-price gap was visible before the event, not after the award.
A metals processor contracted annually while the driving indices moved weekly underneath the price.
Live should-cost versus contracted price sat on the same item, ready for the next conversation.
An FMCG pack-buying team assembled negotiation briefs by hand the night before each RFx.
Buyers entered the room with a brief from their own consumption, not from the converter's quote.
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Frequently asked questions
No. It reads item, BOM, and PO history from the ERP you already run and recommends a number. Your ERP stays the system of record.
The material line re-prices when the driving index moves, within a modelled lag. It is not an annual spreadsheet.
No. A human still awards the event and commits the price. The agent drafts the comparison and the brief.
Item master, BOM or spec, 12 months of PO price history, and the commodity or FX series that drive your A-items. CSV exports are enough for an assessment.
We run the agent in shadow against your own history and, where you have them, a cost engineer's manual should-costs. You see coverage and material-line error before you use the number in a live negotiation.
Should-cost sets the number used in sourcing and the contract. Invoice-match then flags any bill that drifts from that number. Same vendor, same item, one trail.