Cost Avoidance Agent
Handles supplier price change requests and negotiates outcomes within defined procurement authority.
Monitors the procurement inbox for supplier price change requests and evaluates each against price history, contract terms, and raw-material index movement before acting on a decision within defined authority. Outcomes are written back to the ERP and logged to the supplier profile.
- 1–3%
Cost defended
Of the spend the agent sees, 1–3% of price increases are blocked or reduced that would otherwise have hit your costs.
Monitors the procurement inbox for supplier requests
Reads every inbound price change request as it arrives, covering proposed changes to price, minimum order quantities, and payment terms. No in-scope request is left unprocessed.
Assesses whether the proposed change is justified
Checks each request against the supplier's contract position, price history, and the movement of the relevant raw-material index. Determines whether the requested increase is proportionate to underlying market conditions.
Negotiates with suppliers within its delegated mandate
Sends the opening response, handles counter-offers, and runs the exchange to resolution for requests inside its authority threshold. Escalates to the category manager when a request exceeds that threshold.
Updates agreed pricing in the system of record
Writes accepted rates back to the ERP at the point of resolution so active purchase orders reflect the agreed terms immediately.
Logs the outcome against the supplier profile
Records the negotiation history and final agreed terms to the supplier record so the commercial file reflects what was discussed and what was decided.
- Trigger
Supplier price change request arrives in inbox
A supplier submits a request to the procurement inbox or supplier portal message queue covering a proposed change to price, minimum order quantity, or payment terms.
- Step 1
Retrieves the supplier file and contract position
Pulls the supplier profile, price history, active contracts, purchase volumes, and raw-material material mapping from the supplier information management system and ERP. Produces a consolidated view of the current commercial relationship that feeds directly into the proportionality calculation.
- Step 2
Computes proportionality and classifies the request
Compares the supplier's requested change percentage against the weighted movement of the relevant raw-material index for that supplier's commodity mapping. Checks the computed delta and spend impact against configured business rules to produce an ACCEPT, NEGOTIATE, or REJECT classification. Escalates to the category manager when the request falls above the agent's delegated authority threshold or when business rules cannot produce a clear classification.
- Step 3
Runs the negotiation exchange with the supplier
Sends the initial ACCEPT, NEGOTIATE, or REJECT response directly to the supplier via the procurement inbox or supplier portal. Handles counter-offers and follow-on correspondence, tracking each round against the original request and the authority boundaries, until the supplier confirms acceptance or the parties reach a defined resolution. Logs each exchange in a structured negotiation record attached to the request.
- Step 4
Writes agreed terms to ERP and supplier record
Updates the price condition records in the ERP (Infor LN/M3/CloudSuite, Dynamics 365, IFS Cloud, or SAP S/4HANA) to reflect the accepted rate. Records the full negotiation history, including each counter-offer and the final agreed terms, to the supplier profile in the supplier information management system.
- Resolution
Agreed pricing live, outcome filed
The accepted rate is written to the ERP and active purchase orders reflect the new price. The supplier profile holds the full negotiation transcript as the audit record for the resolved request.
Supplier price responses sent without human effort
so that procurement staff are not pulled into routine back-and-forth on tail-spend requests, and can direct their time toward strategic sourcing and supplier escalations that require judgment.
Price changes accepted only when proportionality checks out
so that cost increases unsupported by raw-material movements are rejected or negotiated down, protecting margin on spend categories that would otherwise absorb unjustified inflation.
ERP pricing updated at point of resolution
so that purchase orders and cost rolls reflect agreed rates immediately, removing the lag between a negotiated outcome and an accurate system-of-record price.
- Read/write access to the ERP
- Connects to the ERP (e.g. Infor LN/M3/CloudSuite, Microsoft Dynamics 365, IFS Cloud, or SAP S/4HANA) to read open purchase orders, contracted pricing, supplier volumes, and material mappings, and to write back updated pricing on accepted changes. Without this connection the agent cannot execute decisions or keep pricing records current.
- Procurement inbox access
- Reads supplier price change requests directly from the procurement email inbox or supplier portal message queue. This is the agent's primary trigger: without inbox access it cannot detect incoming requests or send negotiation responses.
- Supplier and contract master data
- Pulls supplier profiles, price history, and contract terms from the supplier information management system or contract repository (e.g. Ivalua, Jaggaer, or a dedicated contract module within the ERP). Used to assess proportionality between the supplier's proposed increase and underlying raw-material movements and to determine what falls within autonomous authority.
- Commodity and raw-material price feed
- Reads current and historical raw-material index data from a market data feed or internal commodity tracking table. Required to compute the weighted raw-material delta against the supplier's claimed increase percentage. Without it the proportionality check cannot run.