This article will provide an overview of how to approve an individual cost type in the Cost Analysis tab. This can be done by any of the approving teams. Either the Buying or the Sourcing team.
The main table in the Cost Analysis tab represents the rolled up values for each BoM tier row level - for example, this means you will see a rolled-up value for the entire stone table, not just a single stone:
- Cost type - represents BoM tier categories.
- Pre-approved - shows a value from the sourcing grid. Sourcing grids allow an Enterprise retailer to pre-agree costs with their Vendors of Record.
- If your Vendor’s Bill of Materials (BoM) tier can successfully index against your Sourcing grid then you will see Pre-Agreed cost in the column.
- If a BoM category contains components that are not on your grid or Tether to Grid is turned OFF, you will see the (!) icon because Atelier is not able to provide a pre-approved value.
- Quote - the cost that the vendor has input for this cost submission.
- Difference - If the vendor overrides the value for the Sourcing grid, the retailer is able to easily understand any difference to pre-agreed costs. The difference % with the arrow indicates the total cost is % over the pre-approved cost.
- Guide - shows the % difference between the vendor’s cost and the Guide (eg. an industry standard, internal pricing goal). This field is not visible to the vendor.
- Tether to Grid - Enterprise retailers and their vendors agree to certain parts of the Bill of Materials in the Cost Submission being automatically driven by pre-agreed costs (Sourcing grids). When this feature is enabled (ON), costs can change as a function of Sourcing grid component cost changes and the cost price will be adjusted automatically.
💡 Understanding Tether To Grid
Read more here to learn how to configure Guide costs and ensure your buyers and sourcing team members always have a benchmark to use during the cost approval process here.
- BoM Tier Approval Status - both the Buying and Sourcing teams can change the approval status on a BoM tier row-level or apply changes to all (All Status). The BoM tier level approval does not have any relationship with the overall product approval status. The changes to the approval status won’t notify the vendor. This is to save the vendor from receiving too many notifications. The vendor is only notified upon product level Cost Approval (see below).
💡 Did You Know?
You can even approve product level with BoM Tier rows showing rejected, this is because you may not agree to the diamond costs but you are making up the difference on metal and labour, and are happy to approve the overall Cost Submission.
- Cost Percentage - the Dynamic pie chart allows buyers to easily see how the cost of the product is split into the BoM tiers it’s made up of, and how the vendor profit relates proportionately to the total piece cost.
Team permissions
Only members of the Buying or the Sourcing team can change the approval status on the BoM Tier Row level. Once the status is changed (approved or rejected) it will be saved in the dropdown for future reference, however it won't have an effect on the overall Cost Submission approval. The Buying and the Sourcing team members can change the status back from accepted to rejected and override each other previous decisions. All activities will be displayed in the Activity Log.
Vendor visibility
At this point, the Vendor won't see any updates regarding the BoM Tier Row level approval. The Vendor won't receive any notification until the overall Cost Submission has been approved or rejected by the Buying or the Sourcing Team (bottom right section).
