Forward Buying is a controversial retail concept. Buyers apply temporarily lower purchasing prices in order to accumulate extra stock; and stores often follow suit. Suppliers make attempts to counter the process, though often against better judgement. But what if the purchasing system could prevent Forward Buying in the future? How can you then safeguard the vital extra margin?
Recentes case

A major intervention in the processes

A supermarket group

A leading retailer is to implement a new ERP system, which will have major consequences for those processes that place purchase orders with suppliers. From now on, the purchasing volumes will be more or less automatically calculated instead of being determined off the balance sheet.


Major intervention

This major intervention in the ordering processes may deprive retailers of great advantages, due to them no longer being able to buy stock at discounted prices. This system is referred to as “forward buying”: purchases made at discounted prices are partially sold at regular prices, thus generating extra margin.


Complex calculation

The client requires assistance in calculating the old versus the new situation, in order to compensate the expected margin losses via prices and/or conditions in due time during the company’s negotiations with suppliers. This is an extremely complex calculation, requiring many factors to be taken into account. This client’s data are not of the required quality for this purpose, and numerous manual adjustments and checks will therefore need to take place.


Better agreements

Recentes organises the data management process and conducts the scenario calculations. The resultant information allows buyers to reach better agreements with their suppliers in due time, so the ERP implementation does not lead to unforeseen margin losses.

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