Supplier Network Fee Modeler

When an organization engages with suppliers for purchasing or invoicing via a supplier network, the cost of use to suppliers is often ignored. In many cases that’s a pragmatic approach. Low costs are unlikely to be passed on to customers if the supplier enjoys business process and customer relationship benefits. This is not always the case. If fees are excessive, the increased supply chain costs may well be passed back to the customer in one form or another. It is important therefore to understand what these costs are in order to assess the posible impact of excessive fees.

The supplier network fee modeler is designed to help assess the supply chain cost of one particular type of fee structure that applies charges in proportiuon to transaction value.

Based on a very limited amount of information, supplier spend and number of invoices, the supplier network fee modeller makes some high level assumptions about how spend is distributed across the supplier base and calculates what the supplier costs might look like. Have a go. (For anyone wishing to model a real situation, there is an advanced option that makes no assumptions.)

This modeler is based on the structure that Ariba uses and also uses their current published pricing but it is a generic model intended only to give an indication of what the implications of a value based supplier fee model might be.

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Important Disclaimer

The Supplier Network Fee Modeller attempts to be as accurate as possible based on information and content available via websites in the public domain, and the data provided is for information purposes only.  This site is provided by Purchasing Insight on an “as is” basis, and Purchasing Insight makes no representations or warranties of any kind, express or implied, as to the operation of this site or the information, content, materials, or products included on this site. You expressly agree that your use of this site is at your sole risk and the results of the calculations are presented here for you to draw your own conclusions.  Purchasing Insight reserves the right to modify at any time without prior notice these statements and the information contained on the site.