The main purpose of the pricing functionality is to simplify the process of obtaining the price from your supplier. This is done by allowing you to enter price, discounts, and additional costs in the way you receive the information from your supplier, no matter whether you receive it via EDI/MHS or by any other means. The only mandatory place to enter the price from the supplier is on the combination of the purchase part and its supplier.
Note: When entering a purchase requisition and specifying the supplier, you can use the List of Values to see all available suppliers for the purchase part and the price specified for the combination of the purchase part and its supplier.
Note: You can use charges on purchase orders. Examples are charges for transportation, insurance, customs, and service fees. Each charge is entered as a line on its own. You can read more about charges in the document About Charges/Landed Costs.
If you have agreed with your supplier that you have discounts and/or additional costs for everything you buy from him/her, you can enter this directly on the supplier record. These terms will be overridden if you have entered terms with a higher priority. (See the tables below.)
Purchase groups are used for grouping purchase parts and are defined separately for each purchase part. The groups are entered as basic data in IFS/Purchasing.
The purchase group can be used for entering discounts and additional costs from a specified supplier. For the combination of supplier and purchase group, you can define discount and additional cost; these terms will be used for all purchase parts bought from the supplier if the purchase part is connected to the purchase group. This is valid unless there is information entered with a higher priority.
The price list is basically defined for the combination of purchase part and its supplier. In this list, you can enter a minimum quantity along with price, discount, and additional cost. You also must specify a valid starting date for each line. This functionality takes only the present purchase order line into account and, consequently, retrieves the terms from the line with the appropriate quantity.
This information can be entered from a price catalog message received via EDI/MHS.
Supplier assortments are used for grouping parts from a supplier. The assortments are usually defined by the supplier. With the use of supplier assortments, it is possible to group inventory registered purchase parts, non-inventory registered purchase parts, as well as no-number parts, in purchase agreements. One advantage with the supplier assortment concept is that you can use one purchase part even though you have several suppliers for the part, and the suppliers can give you different discounts and additional costs.
A supplier assortment should only be used for grouping purchase parts and/or no-number parts to one (1) supplier. The supplier assortments are set up as basic data in IFS/Purchasing and are then used for grouping purchase parts with similar conditions regarding discounts and additional costs. Supplier assortments can never be site specific, but they are valid for all sites entered in the purchase agreement.
There are two main types of supplier agreements, purchase agreements, and blanket purchase orders.
A purchase agreement is a general supplier agreement to be used for all applicable purchase order lines, i.e., all manually and automatically entered purchase orders. The purchase agreement will serve in the background and as a basis for the price on applicable purchase order lines. A purchase agreement will, of course, only be used if it is in a status that allows purchasing for the applicable purchase order line. It is possible to include both purchase parts and supplier assortments to a purchase agreement.
A blanket purchase order is a type of supplier agreement that is used for supplier agreement releases. The supplier agreement release will automatically create a released purchase order with one order line. No authorization nor confirmation will be needed for this type of purchase order since your company already has negotiated the details in the blanket purchase order with the supplier.
You can read more about supplier agreements in the document About Supplier Agreement.
The price on a purchase order line is selected depending on the data entered. The prices are chosen in the following order of priority:
| Prio | Description |
| 1 | Site-dependent price per part step pricing and supplier from purchase agreement. |
| 2 | Site-dependent price per part and supplier from purchase agreement. |
| 3 | Site-less price per part step pricing and supplier from purchase agreement. |
| 4 | Site-less price per part and supplier from purchase agreement. |
| 5 | Price per part from supplier for purchase part, if there is a purchase agreement for the supplier assortment. |
| 6 | Price per part per price list on supplier for purchase part. |
| 7 | Price per part from supplier for purchase part. |
You can always change the price manually on the purchase order line.
There are some exceptions from this list of priority. The first is when there has been a supplier agreement release or an order quotation leading to the purchase order line. Then, the price from the quotation will be used for the purchase order line. If the purchase order line is a result of a supplier agreement release, the price from the connected blanket purchase order will be used. The second exception is when a condition code handled part is entered on the purchase order line. In this case a price entered on the Supplier for Purchase Part/Condition Code Pricing tab will be used for the purchase order line. If no price is entered for the condition code, the order of priority above is used to retrieve a price.
The discount and additional cost on a purchase order line is selected depending on the data entered. The priority is in accordance with the following table.
| Prio | Description |
| 1 | Site-dependent discounts and additional costs per part step pricing and supplier from purchase agreement. |
| 2 | Site-dependent discounts and additional costs per part and supplier from purchase agreement. |
| 3 | Site-less discounts and additional costs per part step pricing and supplier from purchase agreement. |
| 4 | Site-less discounts and additional costs per part and supplier from purchase agreement. |
| 5 | Discounts and additional costs from supplier assortment step pricing from purchase agreement. |
| 6 | Discounts and additional costs from supplier agreement assortment in purchase agreement. |
| 7 | Discounts and additional costs per part per price list on supplier for purchase part. |
| 8 | Discounts and additional costs per part from supplier for purchase part. |
| 9 | Discounts and additional costs for the purchase group. |
| 10 | Discounts and additional costs from the supplier. |
The exceptions are, as for the case with retrieving the price, supplier agreement releases releases and purchase order lines from order quotation. You can always update possible discounts and additional costs manually on the purchase order line.
If there is a purchase agreement for the supplier assortment, the price will be retrieved from the combination of the purchase part and its supplier and not from the price list. In the table below, you can view an example of where the terms are retrieved when there is a supplier assortment valid for the purchase order line. The figures in the Prio column refer to the above table.
| Prio | Window where the values are entered | Price | Discount (%) | Additional Cost |
| 6 | Supplier Agreement/Supplier Assortment | - | 15 | 0 |
| 7 | Supplier for Purchase Part/Price List | 90 | 2 | 3 |
| 8 | Supplier for Purchase Part/General | 100 | 8 | 0 |
| 9 | Supplier Discounts (Price group) | - | 10 | 0 |
| 10 | Supplier | - | 5 | 5 |
| Values retrieved to the purchase order line | 100 | 15 | 0 |
If there is a purchase agreement, or a price list, and the discount and/or additional cost is set to zero (0), this value will be retrieved to the purchase order line. On the other hand, if the discount and/or additional cost is retrieved from supplier for purchase part, or from the purchase group, and the value is zero (0), the system will go on searching until it finds a value for the discount and/or additional cost that is not zero (0), i.e., the discount could be retrieved from the supplier for purchase part and the additional cost from the supplier if the additional cost is zero (0) for the combination of supplier and purchase part per purchase group.
Example of discount and additional cost retrieval to purchase order line when the additional cost is zero (0) for the combination of the purchase part and its supplier per purchase group:
| Prio | Window where the values are entered | Price | Discount (%) | Additional Cost |
| 8 | Supplier for Purchase Part/General | 100 | 8 | 0 |
| 9 | Supplier Discounts (Purchase group) | - | 10 | 0 |
| 10 | Supplier | - | 5 | 5 |
| Values retrieved to the purchase order line | 100 | 8 | 5 |
The Consolidated Price feature allows you to consolidate demands to achieve better prices. The feature calculates the price that the buyer will obtain by accumulating all quantities from all purchase orders lines on one order. You can start this feature when you are preparing the purchase order. It is an optional step. You can use this feature when working in a single site scenario (all lines are to be delivered to the same site) or when working in a multi-site scenario, in which you take advantage of centralized purchasing using one central purchase order that contains lines of goods that will eventually be received by different sites. When the consolidated price calculation is done, you have the option to accept or reject the results. If you accept the results, the system will then update the prices on the order lines.
The logic and preference order to retrieve the applicable price, discount and additional cost is similar to the descriptions above, except that you will use the accumulated quantity for the whole order.
Lines that have the price freeze flag activated will not be considered in the consolidated price calculation.
The purchase order reports present the accumulated quantities on a single line. The purchase order reports are purchase order, purchase order work copy, purchase order changes, purchase order changes work copy.
External service orders are exempt from the normal pricing functionality. The external service order line will always retrieve its price from the external service prices setup. Any purchase agreements, prices per price list, and similar items will not be considered in the pricing.