Parts and Materials Pricing Variance Playbook

Pricing variance is one of the most common MRO leakage sources:

• equivalent items are purchased under different SKUs
• vendor pricing is inconsistent and not updated
• markups are hidden or not disclosed
• buyers choose convenience over price because comparisons are hard

This playbook installs a beginner-safe pricing variance operating system.

What you will install

1. SKU normalization and “equivalent item” rules
2. Vendor price list governance and update cadence
3. Markup visibility requirements
4. Price variance reporting and review cadence
5. Contract and catalog updates based on evidence

Step-by-step operating system

Step 1: Normalize what you can

Start with:

• top vendors
• top items by dollars
• items with repeated purchases across sites

Normalize:

• manufacturer part numbers
• units of measure
• equivalent item groups

Step 2: Require usable price files

Beginner-safe:

• quarterly vendor price file refresh
• effective dates must be explicit
• freight and fees must be explicit

Step 3: Make markups visible

Require:

• materials lines itemized on invoices
• markup percent disclosed
• caps where possible

Step 4: Review variance monthly

Monthly (30 minutes):

• top price variance items
• top vendors driving variance
• actions: catalog updates, vendor negotiation, item standardization

Templates

A) Equivalent item group template (copy/paste)

Copyable template (TEXT)
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Equivalent Item Group

Group name:
Primary item:
Approved alternatives:
Manufacturer part numbers:
Units of measure:
Notes:

B) Price variance review table (copy/paste)

C) Vendor markup disclosure requirement (copy/paste)

Copyable template (TEXT)
Copy
Materials Markup Disclosure Requirement

- Materials must be itemized (part, quantity, unit cost).
- Markup percent must be disclosed on each line or as a clear schedule.
- Any markup above the cap requires written approval.