PracticeOct 2026
Raw-material price clauses: stop claiming late
A quarterly routine that turns index movements into claims an OEM buyer can check in minutes.
Most OEM contracts let a supplier revise prices when steel, aluminium or copper move past a trigger. The money is rarely lost because the clause is missing. It is lost because nobody watches the index against every clause, the claim goes in a quarter late, and the evidence is thin when it does.
The routine
- List every clause. For each OEM: the index named, the base value, the trigger (often a percentage move) and how often revisions are allowed.
- Check the index every month. Compare the current average against each clause's base. Flag any clause past its trigger.
- Work out what is due. Raw-material weight per part, times the change in price, times parts shipped in the period.
- Build the evidence. The clause extract, the index values, the bill of materials and the dispatch register, in one pack.
- Claim in the same quarter, and track it until a revised PO or credit note arrives.
Illustrative example
Steel per part 2.40 kg
Index change ₹3.44 per kg
Parts shipped 1,84,000
Due 2.40 x 3.44 x 1,84,000 = ₹15.2 lakh
Figures are illustrative. Use the formula in your own contract.
MethodOct 2026
Fix the process before you add AI
Most lost money sits in waiting and handoffs, not in the work itself.
A claim that takes twenty minutes of actual work can take three weeks to leave the building, because it waits in inboxes between purchase, accounts and the commercial team. Putting AI on top of that only makes the waiting faster to record.
Sort every step into one of four
- Delete it. Approvals and handoffs that add nothing.
- Plain software. Lookups, formulas and reconciliations that follow fixed rules.
- AI. Reading contracts, matching documents, drafting letters.
- A person, with the evidence ready. Anything that commits you to an OEM or involves large amounts.
In most plants, more steps land in the first two buckets than people expect. Do that sorting before you buy any AI tool. Then give AI one job: the one at the step where work waits.
Working onOct 2026
Margin by part number: what we're building
One record per part, so every loop knows the cost, the price and the contract behind it.
Most suppliers know their margin by plant, not by part. The drawing lives in engineering, the quote in a spreadsheet, the price in the ERP and the price clause in a PDF. We are building a single record per part number that brings these together: drawing, quote, should-cost, actual cost, selling price, contract terms, engineering changes and margin.
Every recovery loop reads from this record and writes back to it. It is the first thing we set up with a new client, and it is what makes margin by part number possible.
