Ensuring customers are charged the correct Avendra contracted price is an important component of delivering complete supply chain assurance. Internal Audit Director Susan Young has been spearheading the Price Audit department for over two years. She explains how her team works to improve supplier performance and provide customers with greater peace of mind.
Q: At a high level, how does your team help ensure price accuracy?
A: Avendra’s Supplier Price Audit team is made up of six experienced staff members. Through a combination of both automated and traditional manual audits, our staff strives to ensure that each Avendra customer receives the correct, pre-negotiated price for every contracted item they buy.
Q: How do you assess risk in order to prioritize resources?
A: We ask ourselves what factors cause the most potential for pricing inconsistencies within the supply chain. Allocating time and resources to areas that have the most potential for discrepancy helps us deliver the most benefit to our customers. Because we deal with hundreds of suppliers, it’s essential that we have a systematic approach that deploys our resources against the areas with the most need. For example, a supplier whose prices fluctuate weekly has more risk for error than a supplier whose prices are set annually.
Q: How do you use technology to help automate processes?
A: Over the years, we’ve worked to find new and innovative auditing methods. One of the most effective tools we’ve developed is our automated Master Food Analysis program. Thanks to this program, contracted purchases made through master food distributors are automatically audited every month. This tool compares actual prices charged against the expected price, based on our contracts, to help ensure our customers are paying the correct prices.
Q: How do you audit regional suppliers?
A: Due to the complexity of the pricing structures and contracts that comprise our regionally based programs (e.g. fresh meat, seafood, dairy, produce and bakery) we have developed various methods to ensure customers receive accurate pricing. These supplier audits require our team to pay close attention to costing components that contribute to the final price. One of the tools we use is our Internal Controls Questionnaire. Using this, we are able to glean essential details from suppliers on aspects of their internal systems and controls. We use the information to better understand where and why problems occur, so that we can resolve issues more proactively.
Q: How do you handle a pricing error once it is discovered?
A: When a pricing error is found, the Price Audit team performs a root-cause analysis. Auditors work diligently to discover the nature of the problem and then dig deeper to understand why the particular problem occurred. This approach ensures customers are not only credited for any incorrect pricing instances, but also receive accurate prices in the future.
Q: How do suppliers benefit from Avendra’s price audit capabilities?
A: Enabling suppliers to improve the accuracy of their pricing makes for smoother and more lasting customer relationships, as customers have greater confidence in their suppliers’ pricing performance.
Avendra strives to add value for both customers and suppliers along every step of the supply chain. Moving forward, we will continue to improve and enhance our price audit capabilities in order to give our customers greater peace of mind and to help our suppliers build long-lasting relationships.