NoticeablePRO
Elevating decisions. Changing outcomes.
National account price arbitrage model
The decision this model makes
You negotiated national agreements because scale should buy a better price. Two things then happen that nobody checks. Divisions keep buying locally on product the agreement already covers. And on some lines the national price is worse than what the local distributor would have quoted this quarter.
Both failures are invisible for the same reason. The agreement is a document, the local quote is an email, and the purchase order records neither.
There is no report in the business that compares the price you paid to the price you had already negotiated, which means compliance is assumed and value is assumed with it.
The uncomfortable half of the number is the second one. A national agreement is assumed to be the floor, so nobody tests it, so the lines where it stopped being the floor stay unfound. An agreement nobody audits is a price nobody negotiated.
Bought locally at a disadvantage on product an agreement already covers. The fastest of the four to fix — it is a purchasing instruction.
On-agreement lines where the local distributor net is better. The line nobody checks, because the agreement is assumed to be the floor.
The agreement carries delivery terms the invoices do not reflect. Small, clean, and recoverable by an accounts-payable change.
The volume rebate attached to these agreements. Real money on the same base, credited to the rebate capture model.
Want more detail?
The rest of this model — the data sets it runs on, the cause split, the working behind the reference figure and a sample output — goes out by email. Two fields, nothing else.