This article will provide an overview of how to approve your vendor's cost submission on Loupe. This is relevant for both for the Buying and the Sourcing team approval.
Cost Approval Process
The purpose of the entire Cost Approval process is to provide a fair and equitable way of trading for an Enterprise Retailer and their supply chain. The principle is of transparency building trust, ensuring a robust & durable partnership for both retailer & vendor.
- In Linesheet, Retailer changes the Linesheet status from “Selected” to “Confirmed”. Once a product in Linesheet is Confirmed, Loupe will automatically request the Vendor of Record to complete the Cost Submission.
- The Vendor of Record receives a notification requesting a cost submission for the product. In the meantime, the Retailer can access the empty Cost Analysis tab on the product details page and send if necessary remind the Vendor of Record to complete the cost submission.
- The Vendor of Record submits a unique Cost Submission for each size of the product and each purchase method (a single cost submission can be saved across multiple sizes and purchase methods).
- The Retailer receives a notification and reviews the Cost Submission.
- The Retailer accepts or rejects the Cost Submission (Sourcing team approval is mandatory, Buying team approval is optional).
Cost approval status
Once a Cost Submission has been requested for a size, a coloured tab will appear beneath that size. In each product detail page you can review the Bill of Materials and the Cost Analysis to appraise the product’s total value.
There are five statuses for retailers:
- Not Submitted (grey) means either the product is still on Selected status in the Linesheet or that the Vendor has not finalised the Cost Submission yet.
- Submitted (amber) means that the Vendor has finalised the Cost Submission but the Retailer has not approved it yet.
- Approved (green) means that the Cost Submission has been approved by the Retailer's Sourcing team.
- Rejected (red) means that the Cost Submission has been rejected by the Retailer's Sourcing team and the Vendor will need to resubmit it.
- Withdrawn (black) means that the product was previously submitted but the Vendor has made a change to the submission or chosen to withdraw it, and is yet to finalise the changes.
Bill of Materials (BoM) Tab
The BoM view will change as a function of cost submission. Here is how it looks before the Cost Submission:
BoM after Cost Submission
After the vendor submits a cost breakdown, the following consequences apply:
- A new section displays a dedicated metal table
- A new section displays a dedicated labour section
- Any other affected BoM sections will display the additional information added during the cost submission
- All sections display component cost
- Warnings & difference indicators relevant to pre-agreed components costs
Types of Warnings
- This BoM category cannot be indexed against your grid. This may be because it is missing on your grid or the price has not yet been agreed
- This BoM category can be indexed against your grid, however, the grid does not currently hold an approved cost (vendor is yet to quote or retailer yet to approve)
Cost analysis Tab
At the end of the process both vendor and buying company will have a clear view of the cost of the raw materials, the cost to create the product, and the over-cost (vendor profit) of every product:
Pre-Agreed Cost Indicators
Green indicator - displays when there is a percentage difference between the quoted value by the vendor and the pre-agreed price in the Sourcing grid, and the cost is lower than pre-agreed
Red indicator - displays when there is a percentage difference between the quoted value by the vendor and the pre-agreed price in the Sourcing grid, and the cost is higher than pre-agreed
Now you have understood the tool & the high-level process it helps to manage, please read through all the relevant documentation to help you navigate specific sections.