As an ERP consultant specialized in the nutrition industry I often get the question wether it is possible to adjust the price of commodities during the intake, based on the quality? Thanks to MILAS AX, the answer is yes.

Commodities that are used in the nutritional supply chain, such as wheat or soy, will be delivered with a varying level of quality. Unfortunately this quality is not known until the intake. Because of this it is of strategic importance that your ERP solution can support a process of automatic premium/discount generation based on the available lab results. We call it: Quality based pricing.

Quality based pricing in MILAS AX

To illustrate the problem, let us imagine that we have a purchase contract for wheat with a protein content of 13%. During the intake, we take a sample to be analysed. Once the results are in, the quality turns out to be worse than expected (only 12 % of protein). This process can be automated by integrating MILAS AX with BESTMIX Quality Control.

This wheat with 12% protein will be taken in and added to the stock. The purchase contract balance will be updated correctly and a discount will be generated automatically towards the supplier to compensate for the quality drop. When MILAS AX issues the purchase documents (for example a self-bill invoice), there is a detailed quality based price reduction attached to the invoice. Thanks to this process, the supplier is aware of the reasons of the price adjustment.

The advantages of an automated quality based pricing process

The benefits of this solution are obvious:

• A significant reduction of accounts payable processing costs (no need to adjust the price manually based on the quality difference)
• Savings caused by accurate discount matching (invoice will be matched with the PO - because of automatic generation)
• Correct stock and contract balances
• Less discussions with your commodity suppliers because of the full traceability of discount parameters
• No chance for human errors thanks to a robust integration between MILAS AX and BESTMIX LIMS for the receipt process

Thanks to the quality based pricing modules in MILAS AX the day-to-day tasks can be reduced to a minimum. Instead of spending time on repetitive administration your employees can focus on improving your business and you no longer have to worry about human error.