Revomo Industry BriefChemicals, Materials & Process Industries

The price recalculates itself.
The margin was set at signature.

Revomo helps you hold every index-linked formula as a record, see what each contract entitled you to invoice, and close the gap at the reset or at renewal.

For specialty and commodity chemicals, materials and process manufacturers, from one plant and ERP to several regions

The problem

The formula prices the book. Nobody holds the formula.

Much of this industry’s contracted price is computed, not negotiated. An agreement names a published feedstock index, a factor, a lag, a cap or deadband and a notice period, and the price resets on schedule, in both directions, so margin is decided at signature. The index, the formula, the arithmetic and the result often sit in four places, so few teams know what each contract entitled them to invoice. Revomo connects them, on one ERP or across several plants.

Index subscriptionPublished settlements
AgreementsFormula terms, notice
Pricing modelsReset calculations
ERPPrices and invoices
ProcurementActual purchase cost
The decision
  1. Index move
  2. Entitled price
  3. Execution loss
  4. Now or at renewal?
Public evidence
  • AdvanSix’s 18% favorable pricing in Q2 2026 was 13% raw material pass-through and 5% market-based pricing.1
  • Cabot discloses that its feedstock indices “may not precisely track our actual costs”, nor may the timing of adjustments.2
Commercial Context

It connects the records behind each formula and reset.

How Commercial Context works
Index reset example

The quarter’s index settles up 7.0%.
Every formula computes correctly.

A specialty chemicals producer with two plants sells $164.0M a year under 214 index-linked agreements in four formula families. The quarter’s feedstock index settles up 7.0%; the plants’ purchases rose 8.0%. What will the formulas recover, why is the rest lost, and what can be fixed before renewal?

$4.47M
Cost increase not recovered
first 12 months, formula book
$0.97M
Planned recovery, annual
22% of the gap
$0.92M
Realized run rate, annual
95% of plan at week 40

Illustrative example, not customer results. Recovery is annual; realized is the annualized run rate 40 weeks after the first effective date.

IllustrativeExample data
01SignalWhat changed?

The index settles on the publisher’s calendar and arrives as a refreshed dataset from the subscription you license (Revomo does not supply index data).

Index move
+7.0%
quarterly settlement, final
Purchased basket
+8.0%
what the plants actually paid
Agreements referencing it
214
four formula families

Every formula will compute correctly. Whether the result recovers the cost is a separate question.

02ContextWhich agreements does it touch?

Each formula (index, factor, lag, cap or deadband, carry-forward, notice period) becomes a record linked to the invoices it priced and actual purchase cost. Building those records is the first piece of work.

214agreements with formula terms4formula families39surcharge schedules2plants’ purchase costs36months of invoice lines

The binding that matters: each agreement linked to its index series, with cap, carry-forward and notice as fields, not prose.

03AnalyzeWhere does the recovery go?

Three gaps with different owners. Only lag is an execution problem; basis and design were set at signature and recur at every reset.

Analysisindex-to-invoice bridgerefreshed
Formula book, first 12 months · cost increase to price recovered
Raw material cost increase$8.40M
Basis: index +7.0%, purchases +8.0%−$1.05M
Index-implied recovery$7.35M
Caps, deadbands, surcharge ceilings−$2.01M
Formula-entitled recovery$5.34M
Lag: cadence, notice, publication−$1.41M
Price recovered$3.93M · 47% of the increase
$1.10M
Lost to one deadbandOne family, 20% of book revenue, carries 55% of the design loss: a 4.0-point deadband then a 50/50 share passes 1.5 of 7.0 points.
1.1 of 3.2 pts
Arithmetic, not leakageGross margin fell from 23.2% to 20.0%; 1.1 points would go even with perfect pass-through, as revenue and cost rise by the same dollars.
04DecideWhich response performs best?

Each response is projected with price sensitivity measured by segment.

Predictive modelprice sensitivity by segmenttrained on 36 months
Publish every reset on settlement, inside each notice period. Reopen nothing.

Needs no customer conversation, so it is the default. Caps, deadband and basis recur at every reset.

Take caps, deadbands and index references to all 64 renewals in twelve months.

The largest structural gain, but it waits for renewals, reopens 24 favorable agreements and breaks the 2.0% volume tolerance.

Execute the calendar, then reopen only the 40 agreements where loss concentrates.

$0.25M more than reopening the book, with 24 fewer agreements reopened, inside the tolerance.

A person chooses. Timing recovery comes first because it needs no customer conversation; negotiation goes only where loss concentrates. The other 78% of the gap waits for dated renewals.

View reset plan
Reset planguardrails applied as rulesready for review
GoalRecover as much of the gap as the agreements and guardrails allow
Guardrails
Notice periodsper agreement record
Caps, deadbands, ceilingsas written until renewal
Index referencechanges only by agreement
Renewals available64 of 214 in 12 months
Volume commitmentsnot breached by a price action
Volume tolerance2.0% of reopened revenue
Reset plan · execute, then reopen where it paysscroll for all columns
SegmentAgreementsRevenueMoveRecoveryWhy this action
Monthly family: publish on settlement46$38.0MLive day 11, not day 27$0.07MNotice is 10 days; issuing it took 17. The delay was internal.
Quarterly family: publish inside notice88$71.0MLive day 16, not day 47$0.23MNotice goes out on day 1 and runs 15 days. Cadence is contractual; the internal delay was not.
Surcharge family: raise on trigger39$22.0MFrom the trigger date$0.22MPreviously raised four months late, and surcharges are not billed retroactively.
Quarterly family: carry the capped point31 of 88$24.6M+1.0 pt next reset$0.16MThey cap each reset, not the cumulative entitlement, so the truncated point carries.
Semi-annual family: remove the deadband18 of 41$14.6MProposed at renewal$0.18MThe deadband, not the share, removes most pass-through, so the share stays. Renewals inside nine months.
Quarterly family: re-index22 of 88$17.8MProposed at renewal$0.11MA series that tracks what the plants buy, where basis loss is largest.
Semi-annual family: hold23 of 41$18.4MHold to renewal$0Renewals 10 to 22 months out, no reopener. Held with its date.
Total214 agreements · $164.0M$0.97MAnnual. Rows within a family overlap.
05Govern & executeWhat is approved and published?

Rules are dry-run against the plan first: resets inside their bands go straight through, and changes to formula terms route to renewal planning.

  1. 01Computed from the recordEntitled prices come from each agreement’s terms, with bands applied as written.
  2. 02Exceptions routedA renamed index series holds the reset; formula-term changes go to renewal planning.
  3. 03Published on noticePublished on day 1; monthly agreements live on day 11, quarterly on day 16.
  1. Index settledDay 0
  2. Resets drafted and dry-runDay 1
  3. Approved, published, notices sentDay 1
  4. Monthly family liveDay 11
  5. Quarterly family liveDay 16
  6. Renewal proposals concludedBy month 9

Agents can analyze, draft and submit a change for approval. People approve and publish it, and the policy decides whether it is allowed.

View approval rules
RULESET · INDEX RESETSOne policy, 214 agreements, both plants
RuleWhenThenApproval
IR·INDEXReferenced series renamed or method changedHold; reconcile the reference before invoicingContract manager
IR·FORMULASettlement final for the periodCompute the entitled price from the recordAuto
IR·BANDMove exceeds the cap or sits in the deadbandApply the band; record the truncated amountAuto
IR·CARRYCap is per reset, not cumulativeCarry the truncated amount to the next resetAuto
IR·NOTICEEntitled change ready to publishEffective when the notice period expiresAuto
IR·SURSurcharge trigger metRaise from the trigger date, up to the ceilingAuto
IR·VOLAgreement carries a volume commitmentRoute with the commitment attachedCommercial director
IR·REOPENAction changes a formula termBlock; route to renewal planningVP Commercial
What computes first
  1. Index settlement
  2. Contracted factor
  3. Cap or deadband
  4. Carry-forward
  5. Surcharge trigger
  6. Notice period

The contract manager owns index references; the VP Commercial owns renewals.

How approvals and publishing work
06MeasureDid recovery hold?

At week 40, with every planned renewal concluded, realized recovery is compared with the plan.

IllustrativeOutcome of the example
Annualized run rate against plan, week 40
$0.92M realized of $0.97M planned · 95%

Timing recovery held in full, and reopened volume moved −1.4% against −1.8% modeled. The $50K gap persists until the next renewal: five customers narrowed the deadband to 2.0 points instead of removing it ($30K), and four declined re-indexing ($20K). A renamed index series held six resets until week 11; that cost recovery once and is outside the run-rate gap.

Next: add the narrowed deadbands and declined re-indexing to the renewal calendar.

Index reset exampleExample data
Other decisions

The same approach supports other pricing decisions.

  • Market-based pricing

    Where a business line is priced by negotiation, which customers can take an increase, and how much?

    Decision Optimization models price sensitivity by segment and compares responses, so each increase is sized to its segment, not applied across the board.

    Price increase management
  • Cost to serve

    Which customers and products still earn their margin once freight mode, packaging and hazardous materials handling are counted?

    Analytics & Insights allocates freight, packaging and handling to customer and product on your own transactions, labelled as an allocation.

    Customer & product profitability
  • Contract pricing

    Alpha

    Which formula terms should each renewal change, and in what order?

    Contract Pricing & Renewals is in alpha with design partners. The example uses pricing rules on agreement records instead, so each renewal proposal carries the loss its terms caused.

    Contract pricing & renewals
  • Reset and renewal planning

    What will next quarter’s resets and this year’s renewals do to the revenue and margin plan?

    Planning & Forecasting connects the reset calendar, renewal dates and committed volumes to the plan, so forecasts separate formula pass-through from pricing decisions.

    Revenue & margin planning

What Revomo provides

Connect

Index settlements, formula terms, invoices, purchase cost and surcharge schedules, linked through shared definitions so every reset traces to its source.

Decide and act

Compare entitled with realized price, model price sensitivity, compare responses, route exceptions for approval and publish effective-dated resets.

Extend where needed

Quoting, agreement management and incentive programs, added for specific workflows. Quoting is generally available; the other two are not yet.

Revomo works alongside your ERP, which keeps pricing transactions, and reads the index data you license; it does not supply it. Connection and publishing methods are scoped to your systems during activation.

Bring one index reset.
We will trace it end to end.

Bring a recent index reset, a formula family that never seems to recover, or a renewal you are preparing, and the people who own it. We will map how the reset works today, from where the index arrives to how prices are approved and checked, then show how Revomo could run it, on the example above or on a scoped slice of your own data. No data is required for the first conversation.

Research basis2 primary sources · public company filings

These sources support the description of the industry problem. They are not evidence of Revomo results, and every figure in the example is illustrative. Method: public company disclosures and the documented mechanics of the Revomo platform. Coverage: specialty and commodity chemicals, advanced materials, polymers, resins and coatings, and packaging materials.

  1. 1AdvanSix Inc. AdvanSix announces second quarter 2026 financial results (Form 8-K, Exhibit 99.1) 7 Aug 2026
  2. 2Cabot Corporation. Annual report on Form 10-K, fiscal year ended 30 September 2025 24 Nov 2025
Plate IND · Series 2026 · Chemicals, Materials & Process Industries · RV·2026·IND·16
Plate B2 · Series 2026