How do automotive suppliers recover missed margin from price changes?
What is missed margin?
Automotive suppliers recover missed margin from price changes by identifying where actual costs or commercial terms diverge from original pricing assumptions and taking corrective action before margin loss becomes permanent. This recovery can be contractual, operational, or commercial, but only if the issue is detected early enough.
In most cases, missed margin is not caused by a single event, but by small, compounding changes that go untracked during execution.
How missed margin works.
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Establish the original pricing and cost assumptions at quote approval
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Monitor execution data (materials, labor, logistics, tariffs) against those assumptions
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Quantify the financial impact of deviations at the program or customer level
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Identify recovery mechanisms (re-quote, surcharge, engineering change, cost offset)
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Track recovery actions and outcomes over time
Example of missed margin.
A Tier 1 supplier quotes a program assuming stable steel pricing and domestic logistics. Six months into production, expedited freight becomes routine due to OEM scheduling changes. While revenue remains on plan, logistics costs spike.
Because the variance isn’t visible until month-end reporting, multiple shipments go out at reduced margin before Finance flags the issue. By the time recovery discussions begin, the supplier has already absorbed significant losses.
Common mistakes automotive suppliers make.
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Relying solely on month-end financials to identify margin loss
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Treating margin recovery as a one-time adjustment instead of an ongoing process
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Storing recovery actions in spreadsheets or email threads
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Assuming Sales, Finance, and Operations share the same view of margin impact
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Waiting for customer approval before quantifying losses internally
How Campfire solves this.
Campfire connects quoted assumptions directly to execution data, allowing suppliers to detect margin erosion as it occurs, not after it’s already booked. Teams can quantify impact, assign accountability, and track recovery actions in one system, creating clarity without friction.
Instead of reacting to missed margin, suppliers gain the ability to manage recovery proactively.
#faq
Frequently asked questions.
Can suppliers recover margin after shipment?
Yes, but recovery options narrow significantly after shipment. Early detection increases leverage.
What data is required to support recovery discussions?
Clear documentation of original assumptions, execution variance, and financial impact.
Who owns margin recovery: Sales or Finance?
Effective recovery requires shared ownership across Sales, Finance, and Operations.