Automotive Distributor's Transformation Led to Over 6% Revenue Improvement
About the Customer
This large US-based distributor has been a staple in the automotive industry since the beginning of the 20th century. Specializing in supplying automotive products, it has built a reputation for reliability and efficiency in the service market.
The Challenge: Inefficiency from Managing 5,000 Products Manually
As the company grew and expanded, pricing processes became increasingly complex and manually intensive. Manual pricing workflows involved gathering, cleansing, and analyzing data from various sources resulting in slow response times and costly errors.
The pricing team faced growing difficulty in managing the supply chain for 5,000 products across numerous customers' programs, leading to delays, inefficiencies, and missed opportunities.
The pricing team’s frustrations were evident:
“Our current manual processes are getting more complex as our business evolves,”
Pricing Director, Automotive Distributor
To stay competitive and respond swiftly to market demands, they recognized the need for a technological solution to streamline operations, improve accuracy, and drive better business outcomes.
The Pricefx Solution: Automating Processes to Focus on Value-Driven Pricing
To address these challenges, the company partnered with Pricefx. The goal was to implement a solution that could automate key pricing processes. Automation was crucial for a business involved in large-scale product supply to further improve strategic decision-making and allow the pricing team to focus on more value-driven activities rather than manual data management.
Primary Objectives:
- Reduce manual effort in data gathering, cleansing, and analysis.
- Enhance analytics and reporting capabilities for improved decision-making.
- Manage prices for 5,000 products across multiple programs, including SKU-level management.
- Leverage pricing strategies to optimize inventory and drive volume.
Primary Capabilities:
- Analytics provides pricing insights into their customer and product performance, offering a true waterfall and allowing them to see the impact of pricing.
- Price Setting enables sophisticated pricing strategies, large-scale price adjustments, and approval workflows for exceptions.
- AI Optimization allows for impact modeling of price changes, cost adjustments, and inventory positions, giving the team more control over pricing decisions.
Project implementation was completed in just eight months. Ease of use was a key factor that drove high user adoption resulting in a rapid and significant Time to Value. The pricing team has given Pricefx high marks for delivering increased speed and simplicity.
Results: Significant Gains in Key Business Metrics Three Months Post-Implementation
Just three months after implementing Pricefx, the company saw dramatic improvements in key business metrics:
- Revenue Growth: The core program, which adopted Pricefx, experienced a 6.44% improvement in revenue compared to customers' programs still using legacy pricing processes.
- Gross Margin Improvement: The core program also saw a 13.1% increase in gross margin, highlighting the impact of optimized pricing strategies.
- Margin Percentage: The company’s margin percentage improved by 144 basis points for the customers' programs utilizing Pricefx compared to legacy pricing process.
With Pricefx, the company automated processes that once took up to three days of manual effort to collect and analyze data. The solution also enabled better collaboration across the strategy and administrative teams, allowing for real-time data sharing and more informed decisions.
The automation of pricing processes not only improved efficiency in their supply chain operations but also allowed the pricing team to quickly adapt to market changes, uncovering previously overlooked revenue opportunities. Additionally, the company maintains a competitive edge in its industry.
Pricing Director, automotive distributor