DBS: Benchmark and Target Pricing Functionality

Overview

Some distributor customers may be contractually obligated—or otherwise committed—to achieve specific cost savings on goods or services for their clients. DB Sourcing supports these goals by allowing users to define and utilize Benchmark Price and Target Price values throughout the Quote-to-Order process.

This functionality helps ensure compliance with customers’ savings expectations at various stages, including:

  • Initial supplier selection
  • Bid comparison
  • Proposal preparation
  • Purchase Order submission

In addition to displaying this information, DB Sourcing calculates and displays the variances between cost and sell prices. This allows users to easily determine if they need to:

  • Solicit additional bids
  • Adjust margins to meet the customer's target savings

Definitions

  • Benchmark Price: The current or historical amount a customer has paid for an item.
  • Target Price: The amount a customer would like to pay for the item moving forward.

Setup Instructions

For DB Distributor Customers

To take advantage of Benchmark and Target Price functionality, customers using the DB/d back-office system must first configure two User Defined Fields (UDFs) at the item level.

Steps to Configure UDFs:

  1. Navigate to:

    Accounts Receivable > Setup > User Defined Fields (A/R, S2)

    Create two new fields:

    • Field Type: Item
    • Field Length: 12
    • Field Description Length: 20

Once the User Defined Fields (UDFs) for Benchmark Price and Target Price have been created (e.g., fields 0010 and 0020 as shown in the screenshots), the corresponding field numbers must be provided to DemandBridge Support. This step is necessary to complete the configuration of your DB Sourcing instance.

After this configuration is complete, users can begin populating Benchmark and Target Price values for items. These fields will appear in the Custom Item Master, alongside any other item-level User Defined Fields.

While these are freeform text fields, numeric values with no more than two decimal places are recommended for DB Sourcing calculations display features to function as intended. Additionally, it is recommended to enter value in terms of EA/1 pricing, regardless the UOM in which an item will ultimately be sold. This is because these values are multiplied out in DB Sourcing by the Total Extended Quantity of an item to convey Extended Benchmark Price and Extended Target Price, relative to Total Cost, Total Sell, etc.

EQ Distributor

Prior to being integrated with DB Sourcing, EQ Distributor users already had a field within Item Maintenance called “Competitor’s Price” that served the same purpose as the “Benchmark Price” concept. To that end, Competitor’s Price = Benchmark Price as it relates to DB Sourcing. An additional field called Target Price was added to Item Maintenance.

DB Sourcing Features

When both a Benchmark Price and a Target Price have been defined for an item, DB Sourcing will automatically recognize and display this information throughout the Request for Quote (RFQ) process.

Note: These fields are read-only within DB Sourcing and cannot be edited during the RFQ workflow.

Where Benchmark and Target Price Appear

  • RFQ Creation

    During the initial setup of an RFQ, the Benchmark Price, Target Price, and Target % (the percentage difference between the two) are displayed when:

    • Entering product specifications
    • Selecting suppliers to invite to the job

Prepare/Send Proposal – When viewing and applying margin to vendor bids, additional columns containing metrics such as extended Target Price (“Ext Target Price”) and percentage variance to Target Price (“% Var. To Target Each”) are shown to help users make sure they’re proposing pricing that will meet their customers’ needs. Blue highlighting within these columns indicates that prices are below the desired threshold while red means they’re too high. Additional columns containing other useful data (e.g. $ Variance to Benchmark Price) are hidden by default but may be shown by hovering over the column headers, expanding the “Columns” menu, and checking the boxes to enable columns of interest.

PO Preparation

When preparing a Purchase Order, DB Sourcing displays the same Benchmark and Target Price UI elements that appear during proposal creation. This ensures that any last-minute adjustments to cost or sell price are made with full visibility into the customer's Benchmark and Target Price expectations.

This helps maintain alignment with customer savings goals right up to the point of order submission.

Reporting

DB Sourcing includes a built-in Cost Savings Report, accessible via the “Reports” navigation link. This report can be exported to Excel and provides valuable insight into savings performance.

The report displays both dollar and percentage variances between:

  • The Awarded Total Sell Price
  • The Extended Benchmark Price
  • The Extended Target Price

This allows users to track cost savings achieved on any items ordered through DB Sourcing.

Need Help?

For more information on how to take full advantage of these features, please contact our team by submitting a support request through the DemandBridge Service Desk or by emailing us at support@demandbridge.com.

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