System and method for price analysis and negotiation
View Patent ↗Systems and techniques for management and negotiation of prices of goods purchased from a vendor. Pricing information is collected by a purchaser. This information reflects factors influencing pricing of components used by a vendor and intended for use in products sold to the purchaser. The pricing information is processed to develop models that can be used to compute expected prices for components. The models and other available information are then used to compute target prices for components. When a price quotation for a product is received from a vendor, the price quotation is analyzed, and the quoted price is compared against an overall target price generated by identifying the components making up the product and adding the target prices for components and elements making up the product. If the quoted price exceeds the target price, the price quotation is rejected. Negotiations may then be undertaken to resolve the pricing differences.
1. A system for price analysis and negotiation, comprising:
a server for receiving and processing pricing data relating to components to be purchased, the server being operative to:
receive and maintain pricing information relevant to determining appropriate pricing for a component;
analyze the pricing information to generate a pricing model employing factors influencing appropriate pricing for the component as inputs;
generate a target price for the component utilizing the pricing model; and
analyze a price quotation received for the component by comparing the price quotation for the component against the target price for the component and rejecting the price quotation if it exceeds the target price for the component, wherein negotiated prices achieved after rejection of quoted prices are stored for use in generating models to be used in a future period.
2. The system of claim 1 , wherein price quotations are received for components as part of a comprehensive list of price quotations for components supplied by a vendor, the list of price quotations identifying proposed prices for components during a period, and wherein the price quotations are stored for use in generating models to be used in a future period.
3. The system of claim 1 , wherein the server communicates notifications of price rejections to a vendor providing the price quotations and to responsible parties associated with the purchaser.
4. The system of claim 3 , wherein the server analyzes the pricing information to identify supply and demand information, pricing trends and technological factors influencing appropriate pricing and incorporates such information in the pricing models.
5. The system of claim 4 , wherein the server analyzes price quotations and negotiated prices for past cycles to identify pricing trends.
6. The system of claim 5 , wherein the server identifies potential and actual savings achieved by rejection and negotiation of component prices exceeding target prices.
7. The system of claim 6 , wherein the server has access to a product specification database hosting product specifications, each product specification identifying components used in a product, and wherein the server analyzes the product specification information and purchase information for products to identify potential and actual savings resulting in negotiation of prices for particular components.
8. The system of claim 7 , wherein the server is operative to generate a target price for a product by examining the design specification to identify components and value added activities comprising the product, to retrieve or generate target prices for each component and value added activity and to assemble an overall target price for the product by based on the target prices for the components and value added activities.
9. A method for price analysis and negotiation, comprising the steps of:
receiving pricing information by a server relevant to determining appropriate pricing for components to be purchased and maintaining the pricing information in storage accessible to the server;
controlling the server to generate one or more pricing models based at least in part on the pricing information, each pricing model being applicable to one or more of the components;
utilizing the server to select a pricing model applicable to a component;
utilizing the server to select factors influencing appropriate pricing for the component as inputs to the selected pricing model;
generating a target price for the component based on the inputs; and
utilizing the server to analyze price quotations received for components by comparing the price quotations for a component against corresponding target prices for the components and rejecting a price quotation if it exceeds the target price for the component, wherein negotiated prices achieved after rejection of quoted prices are stored for use in generating models to be used in a future period.
10. The method of claim 9 , wherein the step of carrying out communications to receive pricing information includes receiving and maintaining periodic price quotations from one or more vendors, the periodic price quotations comprising comprehensive lists of proposed prices for purchases of components during a purchasing cycle, and wherein the price quotations for a current cycle are used in computing target prices for a future cycle.
11. The method of claim 9 , wherein the pricing information used to create the pricing models includes supply and demand information, pricing trends, and technological factors influencing appropriate pricing.
12. The method of claim 11 , creation of the pricing models includes analyzing price quotations and negotiated prices for past periods in order to identify pricing trends.
13. The system of claim 12 , further comprising controlling the server to identify potential and actual savings achieved by rejection and negotiation of component prices exceeding target prices.
14. The method of claim 13 , wherein controlling the server to identifying potential and actual savings includes controlling the server to analyze product specification and product purchase information to identify component purchases and wherein overall component purchases for different components are taken into account in identifying actual and potential savings resulting from price rejection and negotiation.