Dynamic pricing is a relentless obstacle for manufacturers, and relying on manual processes to manage it is costing companies time and money. As raw material costs fluctuate and shipping rates shift by the day, traditional AP systems simply can’t keep up. Manufacturers still using spreadsheets or custom Oracle solutions are not only risking errors—they’re jeopardizing profitability.
This is where OpenEnvoy steps in, offering an automated, real-time solution that guarantees accurate pricing without manual intervention, transforming the way manufacturers handle dynamic costs.
The Problem: Dynamic pricing in manufacturing
Dynamic pricing refers to a pricing strategy that adjusts prices on real-time variables such as commodity market indexes or day-of logistics conditions. Manufacturers are particularly susceptible to two forms of dynamic pricing:
- Index Pricing Refers to adjustments based on commodity market prices (e.g., the cost of raw materials like steel, copper, or agricultural products).
- Day-of Conditions: Shipping rates or surcharges are based on real-time environmental or logistical factors (e.g., water levels affect barge costs, and weather conditions influence freight surcharges).
Traditional AP systems, such as Oracle EBS, do not have the built-in capability to handle these complexities automatically. Most companies either custom-build extensions within Oracle to track price changes or rely on spreadsheets to manually reconcile these fluctuations—both approaches are inefficient and prone to error.
Example: Manual Processes in Oracle EBS
In a typical manufacturing company using Oracle EBS for AP, managing index pricing might involve downloading commodity prices from external sources or tracking price fluctuations in a spreadsheet. AP teams would then manually adjust purchase orders and invoices—creating room for errors, delays, and pricing discrepancies.
Similar manual processes are needed for day-of conditions. If shipping costs fluctuate due to a real-time factor like the water level in the Mississippi River, AP staff must manually verify the updated shipping rates and adjust invoices accordingly. This labor-intensive process increases the chances of overpayments or missed adjustments, leading to inaccurate financial records.
OpenEnvoy Automates Dynamic Pricing for Accurate Invoices Eliminating Manual Work
OpenEnvoy eliminates these manual steps by integrating directly with external data sources through APIs. This real-time connection ensures the correct price is always reflected on invoices, whether due to index pricing or day-of logistics conditions. Let’s break this down:
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APIs for Real-Time Index Pricing: OpenEnvoy actively monitors pricing data such as commodity markets or indexes (e.g., copper or the cheese index). Rather than relying on manual downloads or spreadsheet entries, OpenEnvoy instantly updates purchase orders and invoices based on the latest market prices. This eliminates manual entry and ensures accuracy in the company's financial records, leading to faster approvals and reduced risk of overpayment..
Example: A manufacturing company purchases copper, and the price fluctuates daily based on a commodity index. Without automation, the AP team would need to manually track these changes, update purchase orders, and cross-reference invoices.
With OpenEnvoy, this happens automatically—APIs pull the latest copper price and adjust the financial records accordingly, eliminating errors and manual effort.
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Real-Time Handling of Day-of Conditions: Don't let fluctuating costs derail your profitability. Weather delays, tide changes, port congestion, sudden surcharges – OpenEnvoy handles it all. OpenEnvoy’s APIs automatically capture real-time data on shipping costs or surcharges due to environmental factors, such as fluctuating water levels or weather delays. This data is instantly reflected in invoices, ensuring that manufacturers only pay for the actual cost of logistics, not outdated estimates. This not only ensures accurate cost capture but also prevents budget overruns and eliminates the need for time-consuming manual adjustments.
Example: If a manufacturer is shipping goods along the Mississippi River, and a sudden drop in water levels increases shipping costs, OpenEnvoy’s APIs will capture this real-time data and adjust the invoices before they are approved. Without OpenEnvoy, this would require a manual process of verifying the updated rates and adjusting each invoice accordingly—a tedious task prone to errors. OpenEnvoy helps you avoid costly surprises and keeps your logistics spending in check.
5 Key Benefits Companies Realize When Managing Dynamic Pricing with OpenEnvoy
For companies navigating dynamic pricing challenges, OpenEnvoy provides five essential advantages that streamline AP processes and improve financial outcomes:
- Elimination of Manual Tracking: OpenEnvoy’s real-time API integrations eliminate the need for spreadsheets and manual updates, ensuring pricing adjustments are always accurate and current.
- Automated Real-Time Price Adjustments: OpenEnvoy continuously updates prices based on real-time data, removing the need for manual intervention and ensuring financial records stay precise.
- Improved Accuracy and Contract Compliance: By automating price updates, OpenEnvoy ensures invoices reflect accurate costs and comply with supplier agreements, reducing the risk of overpayments, disputes, and non-compliance issues.
- Increased Efficiency: By eliminating manual processes, OpenEnvoy allows AP teams to focus on more strategic tasks, speed up invoice processing, and improve overall operational efficiency.
- Seamless Oracle Integration: OpenEnvoy integrates directly with Oracle EBS, streamlining AP automation without requiring costly, custom-built solutions.
These benefits help companies manage dynamic pricing with less manual effort and result in improved financial performance.
For manufacturers, dynamic pricing presents a constant challenge, but it doesn’t have to be a manual headache. By leveraging APIs and real-time data, OpenEnvoy automates the complexities of index pricing and day-of logistical conditions, removing the need for spreadsheets, custom Oracle codes, and error-prone manual processes. Don't let outdated information hinder your business growth. Contact us today to learn how OpenEnvoy can improve your data accuracy and financial reporting.
