What 15 Part Numbers for the Same Battery Cell Actually Costs You

If your company has acquired two or more brands, there is a reasonable probability that somewhere in your combined vendor master, the same component — the same physical part, sourced from the same supplier — appears under multiple part numbers, multiple supplier entries, or both.

This is not hypothetical. It is the default outcome when brands are acquired and their procurement systems are integrated at the financial reporting level but not at the data level.

Here is what it costs.

The mechanics of fragmentation

When Brand A acquires Brand B, the ERP integration project typically focuses on financial consolidation: chart of accounts alignment, intercompany elimination, consolidated P&L. The vendor master is treated as a downstream concern.

Brand A’s procurement team uses their system. Brand B’s procurement team continues to use theirs. The part numbers are different because they were assigned independently. The supplier entries are different because the supplier relationship was set up separately by each brand’s procurement team — sometimes with the same legal entity, sometimes with different entities in the same supplier’s corporate family.

For a commodity like a battery cell — a component used across multiple product lines in power tools, outdoor equipment, and small appliances — this means each brand is negotiating independently with the same upstream supplier. None of them know what the others are paying. The supplier knows what all of them are paying.

What the supplier can see that you cannot

A tier-one component supplier selling into multiple brands of the same conglomerate has complete visibility into the conglomerate’s total demand for that component. They receive purchase orders from each brand separately. They see the volume. They see the pricing each brand has negotiated. They see which brands are price-sensitive and which are not.

The conglomerate’s procurement teams, working from their independent systems, cannot see the aggregated picture. Brand A’s buyer knows what Brand A pays. They do not know what Brand B pays, or what Brand C pays, or that the combined volume across all three brands would qualify for a tier-three pricing bracket that none of them is currently accessing.

The supplier uses this information. Not necessarily in bad faith — volume pricing is a standard commercial tool. But they use it.

The number

I cannot give you an industry-wide average because the data does not exist in an aggregated, auditable form — which is itself the problem. But the mechanism is clear: every percentage point of pricing difference between what a consolidated negotiation would yield and what fragmented negotiations produce represents real money, multiplied by every component, every supplier, and every brand in the portfolio.

For a conglomerate with $500M in annual direct materials spend, a 2% improvement from consolidated negotiating leverage is $10M. A 1% improvement is $5M. These are not heroic numbers. They are the lower bound of what is available when you can actually see your own spend.

What entity resolution does

Entity resolution is the process of determining, across fragmented data sources, that these fifteen part numbers represent the same physical component, and that these seven vendor master entries represent the same legal counterparty.

Once that resolution exists, the aggregated spend picture becomes visible. The consolidated volume becomes negotiable. The pricing variance across brands — what Brand A pays versus what Brand B pays for the same component — becomes auditable.

Without entity resolution, the data exists. The insight does not.

The organizational friction

Procurement leaders at large conglomerates generally know this problem exists. The friction is organizational, not analytical. Each brand’s procurement team has its own targets, its own supplier relationships, and its own system of record. Centralized visibility requires someone with authority over all of them — or a data layer that sits above all of them without requiring organizational restructuring.

The second option is the practical one. Restructuring brand-level procurement organizations takes years and creates political risk. Building a cross-brand intelligence layer that surfaces the aggregated picture without changing who makes the buying decisions takes months.

That is the problem Forseti was designed to solve. Not to replace the procurement organization, but to give the CPO a view that the organization’s structure currently prevents.