Getting To More Accurate Contract Pricing
As a supply chain leader, you spend many hours finding the best contracts, tiers and prices for the products you purchase. So, it’s frustrating when you get an invoice and find that a price is incorrect. Maybe your organization didn’t get assigned to the right tier, or maybe it’s still the old pricing even though a new deal has been inked. You or your team then spend more hours investigating the error, contacting the supplier and getting the problem fixed. Whew.
Distributors find these problems equally frustrating. After all, their customers trust them to make sure the pricing on their invoices is correct – and blame them when errors occur (even if it’s a last-minute price change or even a one-off write-in change to a contract requirement). To ensure pricing accuracy, both suppliers and providers must invest in a well-coordinated contract administration process – a resource-intensive investment that sucks up resources from other supply chain priorities.
Building The Three Critical Pillars
That’s why my organization, along with leaders from manufacturers, GPOs and health systems, has been working on issues related to contract administration and pricing accuracy for many years. We believe that price synchronization – meaning that all trading partners including the manufacturer, GPO, distributor and provider agree on what the price should be for a product going to a specific customer – is built on three critical pillars.