Playbook
Cost Change Review Playbook
Supplier cost updates can create margin pressure quickly, especially when product files, price lists, quotes, and customer exceptions are reviewed in separate spreadsheets. This playbook outlines a simple workflow for validating cost changes, identifying exposure, and deciding which prices need action.
Why supplier cost updates get messy
Step 1: Validate the cost change
Confirm that the supplier file is internally consistent before using it to evaluate pricing action.
Step 2: Identify margin exposure
Review the cost change against the current approved price, new cost, active margin, minimum margin guardrail, target margin, category expectations, and existing price list coverage. This comparison helps identify where margin is already exposed and where a cost increase may create a new exception.
Current approved price
Use the most current approved operating data available.
New cost and active margin
Use the most current approved operating data available.
Margin guardrails and category expectations
Use the most current approved operating data available.
Existing price list coverage
Use the most current approved operating data available.
Step 3: Prioritize the review
Not every cost change deserves the same attention. Start with the items that have the greatest margin, customer, demand, or operational exposure.
Step 4: Add demand and commercial context
Price changes should consider recent sales movement, category demand, customer sensitivity, inventory position, and competitive pressure where those inputs are available. This context does not make the final decision; it helps reviewers understand the likely tradeoffs before approving an action.
Step 5: Choose an action
Approve price update
The proposed change is supported and ready for the approval or publication process.
Hold for review
More commercial, customer, or category input is needed before deciding.
Monitor
The cost movement does not require immediate action but should remain visible.
Escalate
The margin or commercial exposure needs a designated senior reviewer.
Keep current price temporarily
Maintain the approved price for a defined period and record why.
Update price list effective date
Align the approved change with the date it should reach operating systems.
Step 6: Publish approved outputs
Export decisions
Prepare the approved output in the format required by the next system.
Update price lists
Apply approved prices and effective dates to the correct operating list.
Inform quoting teams
Make sure active quote workflows use the right approved pricing context.
Retain the record
Keep the source cost, review decision, owner, rationale, and effective date.