Kaito Inc. Launches Service Framework to Evaluate Corporate Procurement Pricing

Kaito Inc. (Headquarters: Koto-ku, Tokyo; CEO: Tsune Kasai; hereinafter "Kaito") has announced a new service framework to evaluate the fairness of pricing in corporate procurement.

Kaito is a cost optimization advisory firm that assesses whether prices paid by companies, price increase requests from suppliers, or newly received quotations are truly appropriate, using three approaches: cost, market, and income.

The newly launched service framework consists of three offerings: "Kaito Valuation," which supports the entire process from price evaluation to negotiation and execution; "Kaito Fairness Opinion," which provides third-party assessments of the fairness of transaction terms; and "Kaito Sourcing Intelligence," which aims to visualize and standardize sourcing processes.

Background

In M&A and corporate investments, it is standard practice to evaluate the target company’s value before determining transaction prices and terms.

In contrast, in corporate procurement, even for transactions worth tens or hundreds of millions of yen annually, pricing terms are often set based on prior-year prices, multi-vendor quotations, or bilateral negotiations, without sufficient validation of price fairness.

As a result, companies face the following challenges:

- Inability to determine whether current prices are high or low - Difficulty deciding whether to accept supplier price increase requests - Inability to explain the reasons for price differences among multiple quotations - Risk of quality degradation or business continuity issues after selecting the lowest bid - Inability to justify negotiation or supplier change decisions to executive meetings or external stakeholders

Kaito believes that to address these issues, companies need an objective evaluation of pricing and a decision-making framework that can be clearly explained at the management level.

Kaito’s Three Services

1. Kaito Valuation

Kaito Valuation evaluates corporate procurement prices using three approaches: cost, market, and income.

The cost approach estimates standard costs—including labor, materials, and overhead—and incorporates industry-standard profit margins to determine a sustainable price level.

The market approach aligns specifications and conditions across multiple quotations and market data, analyzing price distribution, averages, variances, and outliers to identify a fair market price range.

The income approach evaluates the impact of the difference between current and fair prices on future cash flows and enterprise value.

In addition to price evaluation, Kaito supports the entire process, including internal alignment, supplier negotiations, quotation collection, supplier selection, and contract term finalization.

2. Kaito Fairness Opinion

Kaito Fairness Opinion is a service that provides an independent third-party assessment of the fairness and economic rationality of transaction terms that a company has entered into or is considering.

Targeting scenarios such as supplier price increase requests, contract renewals, supplier selection, and high-value or long-term contracts, the service uses insights from Kaito Valuation to analyze pricing fairness, negotiation room, alternatives, and risks.

It delivers a third-party opinion letter and analytical evidence suitable for use in executive meetings and board discussions.

3. Kaito Sourcing Intelligence

Kaito Sourcing Intelligence is a system designed to visualize and standardize corporate sourcing processes, including quotation requests, specification management, price comparisons, and supplier evaluations.

The service covers the entire sourcing workflow: organizing invoices and contracts, visualizing current specifications, identifying potential suppliers, collecting reference and formal quotations, comparing prices, selecting suppliers, and managing negotiations and contracts.

Initially, the service will be offered in combination with Kaito’s analytical and operational support, with gradual feature enhancements based on pilot programs with client companies.

How Kaito Differs from Conventional Cost Reduction Support

### Does Not Assume Prices Are Too High

Kaito does not begin analysis or negotiations with the assumption that current prices are excessive.

It provides objective evaluations, whether prices are fair or if supplier profit margins are insufficient.

### Does Not Treat the Lowest Price as the Best

Extremely low bids may carry hidden risks such as quality degradation, understaffing, incomplete scope, additional charges, or post-contract price hikes.

Kaito establishes evaluation criteria based not only on price but also on quality, specifications, supply continuity, and economic rationality.

### Supports from Decision-Making to Execution

Providing analysis alone does not lead to actual cost optimization.

Kaito supports the post-decision execution process, including internal consensus building, supplier negotiations, quotation collection, supplier selection, and contract transitions.

CEO Statement

Tsune Kasai, CEO of Kaito Inc.

"In corporate procurement, transaction terms are often set based on prior-year prices, multiple quotations, or negotiations with suppliers, without sufficient validation of price fairness.

However, as transaction values increase, the impact of these decisions on corporate profitability, cash flow, and enterprise value becomes more significant.

Neither pressuring suppliers with unilateral price cuts nor passively accepting unjustified price increases constitutes sound decision-making.

Kaito’s mission is to create an environment where companies can make transaction decisions that are objectively justified and clearly explainable."

About Kaito Inc.

Kaito Inc. is a cost optimization advisory firm that evaluates the fairness of corporate procurement prices and supports cost rationalization.

The company provides end-to-end support, from validating pricing fairness to advising on management decisions, supplier negotiations, sourcing strategies, and contract term reviews.

Company Name: Kaito Inc. CEO: Tsune Kasai Headquarters: Koto-ku, Tokyo Business: Cost Optimization Advisory Website: https://www.kaito.consulting/

Contact for Inquiries

Inquiry Form: https://www.kaito.consulting/