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As an ERP consultant for ADIFO, specialized in the nutrition industry, people often ask me whether it is possible to adjust the price of commodities during the intake, based on the quality? Thanks to MILAS, based on Microsoft Dynamics 365 for Finance and Operations, the answer is yes.

Commodities that are used in the nutritional supply chain, such as wheat or soy, will have varying levels of quality upon delivery. Unfortunately, this quality is not known until the intake. It is therefore of strategic importance that your ERP solution can support a process of automatic premium/discount generation based on the available lab results. We call it: Quality based pricing. This MILAS Module is now also available in the newest release, based in Microsoft Dynamics 365 for Finance and Operations.

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Quality based pricing in MILAS

To illustrate the challenge, imagine that we have a purchase contract for wheat with a protein content of 13%. During the intake, we take a sample for analysis. Once the results are in, the quality turns out to be worse than expected (only 12 % protein). This process can be automated by integrating MILAS with BESTMIX Quality Control.

This wheat with 12% protein will be taken in and added to the stock. The purchase contract balance will be updated correctly and a discount will be generated automatically towards the supplier to compensate for the quality drop. When MILAS, based on Microsoft Dynamics 365 for Finance and Operations, issues the purchase documents (for example a self-bill invoice), there is a detailed quality-based price reduction attached to the invoice. Thanks to this process, the supplier is aware of the reasons for the price adjustment.

The advantages of an automated quality-based pricing process

The benefits of this solution are obvious:

  • A significant reduction of accounts payable processing costs (no need to adjust the price manually based on the quality difference)
  • Savings caused by accurate discount matching (invoice will be matched with the PO - because of automatic generation)
  • Correct stock and contract balances
  • Less discussions with your commodity suppliers because of the full traceability of discount parameters
  • No chance for human errors thanks to a robust integration between MILAS and BESTMIX Quality Control for the receipt process

Thanks to the quality-based pricing modules in MILAS, based on Microsoft Dynamics 365 for Finance and Operations, the day-to-day tasks can be reduced to a minimum. Instead of spending time on repetitive administration, your employees can focus on improving your business without having to worry about making human errors.