The tender saved 8%. Eighteen months later the part costs more.

Unit price is the one number in procurement measured precisely, owned by one person and recognised immediately. That is exactly why it moves while total cost doesn't.

By Steve 5 min read
Abstract bridge artwork for The tender saved 8%. Eighteen months later the part costs more.

A supplier switch closes at eight per cent below the incumbent’s price. The saving is calculated, signed off and reported. Eighteen months later the category costs more than it did before the tender, and nobody can point to the month it happened. This is one of the more reliable patterns in mid-market buying, and it has very little to do with negotiating skill. It happens because the invoice price of a bought-in item is measured precisely, attributed to a single owner and recognised immediately, while almost everything else that item…

Keep reading for free

Create an account to read the rest.

The whole library is free. No card, no subscription, no trial that quietly ends. An account simply lets us know who we are writing for, and opens every article from here on.

  • Every article, in full, at no cost
  • New articles published every weekday
  • Takes about twenty seconds
Create a free account I already have one

Free means free. We will not charge you for the library, and you can read as much of it as you like.

Important: General information only. Rialto Bridge articles describe patterns and considerations that may apply to a business; they are not financial, legal, tax or accounting advice, and they take no account of your particular circumstances. Consider your own situation and seek advice from a qualified professional before acting.

More on Operations

Scroll to Top