Pricefx: Reducing List Price Revision Time for Manufacturers

In the fast-paced world of manufacturing, recalculating, and adjusting list prices based on local conditions, pricing strategies, and global price references is a critical yet time-consuming task for Pricing Managers. Traditionally, this process has been manual and error-prone, often involving cumbersome calculations in MS Excel with data downloaded and combined from various sources and different versions, lacking a real audit trail. However, with Pricefx, manufacturers can unlock a future opportunity for time-saving automatic data gathering for list price revision and all while applying pricing strategies, robust simulation capabilities, and seamless ERP (Enterprise Resource Planning) integration for efficient and error-free execution.

With over a decade of experience working with customers in the discrete manufacturing sector, Pricefx has played a pivotal role in developing automated, real-time pricing processes configured to meet the unique needs of our customers. With data-driven insights, price simulation and automation, we aim to empower manufacturing enterprises to streamline their operations, enhance profitability, and put themselves in prime position for fruitful long-lasting success.

So, let’s dive into an examination of how Pricefx assists you with the automatic recalculation of dependent price lists (e.g. across regions, countries, different sales channels etc.), before looking at more ways beyond efficient list price revision that Pricefx can help your company achieve sustainable growth.

The Challenge Facing Manufacturers Doing Manual List Price Revisions

For many manufacturers, revising list prices is a lengthy and error-manual process often relying on spreadsheets like Microsoft Excel. This approach involves:

• Downloading data: Gathering data from multiple sources, such as cost information, competitor pricing, and historical sales data, can be a tedious and time-consuming task.
• Data manipulation: Combining and manipulating data in spreadsheets can be complex and prone to errors, especially when dealing with large datasets.
• Limited automation: Calculations are often performed manually, making the process slow and inflexible.
• Lack of audit trail: Tracking changes and maintaining a clear audit trail for regulatory compliance can be difficult with manual processes.
• Getting the right data: Getting the right data is crucial for manufacturing companies doing manual list price revisions as it ensures accurate pricing decisions based on factors such as production costs, market demand, and competitor pricing, ultimately maximizing profitability and maintaining competitiveness in the market.
• Rationalization of data: (e., getting two different cost numbers for the same product from two sources, which one is correct?)

These challenges can lead to several negative consequences:

• Increased time spent on revisions: Manual processes can take a significant amount of time, diverting resources from other important tasks.
• Risk of errors: Manually entering data and performing calculations can lead to errors, impacting profitability and customer satisfaction.
• Limited pricing strategies: The manual approach may restrict the use of sophisticated pricing strategies, hindering your ability to optimize prices.
• Inconsistent pricing across channels: Difficulty adjusting prices across different sales channels can lead to inconsistencies and lost opportunities.
• Margin Compression: The potential for margin compression to occur due to the extended time it takes to evaluate the price adjustments.

Pricefx: Simplifying and Automating List Price Revision

Pricefx offers a solution to these challenges we have outlined above by automating the entire list price revision process. This innovative software provides a range of key benefits:

1. Automatic Data Gathering: Pricefx eliminates the need for manual data collection by automatically integrating with your existing systems, such as ERP and CRM, to gather the necessary data for price calculations.
2. Streamlined Process: The software provides user-friendly wizards and workflows that guide you through the entire price revision process, simplifying even complex calculations.
3. Automated Price Calculations: Pricefx automatically applies pre-defined or user-defined pricing strategies to calculate new list prices based on factors such as cost, market conditions, and competitor pricing. This eliminates the risk of errors associated with manual calculations.
4. Simulation Capabilities: Before finalizing price changes, you can use Pricefx to simulate the impact of different pricing scenarios on sales volume and profitability. This allows you to make informed decisions about your pricing strategy.
5. ERP Integration: Pricefx seamlessly integrates with your existing ERP system to ensure that the calculated list prices are reflected in your system automatically, eliminating the need for manual updates.
6. Improved Audit Trail: Pricefx maintains a comprehensive audit trail that tracks all price changes and decision-making processes, ensuring compliance with regulatory requirements.

More Benefits of the Pricefx ‘Reduced Time’ List Price Automation

By leveraging Pricefx, manufacturers can experience a wide range of benefits:

• Reduced time spent on list price revisions: Automating data gathering, calculations, and workflows frees up valuable time for other critical tasks. These types of time savings allow your team to become more strategic in their everyday pricing lives, using their precious time to unlock additional pockets of value in your offerings that your organization previously did not have either the time, nor the capability to uncover.

• Elimination of manual errors: Automated processes minimize the risk of errors, leading to more accurate and consistent pricing.

• Improved price realization: By simulating various pricing scenarios, you can identify the optimal prices to maximize profitability and market share.

• Aligned prices across sales channels: Pricefx ensures that your pricing strategies are consistent across all sales channels, avoiding potential confusion for customers and lost sales opportunities.
• Enhanced compliance: The software’s built-in audit trail simplifies compliance with regulatory requirements by providing a clear record of all pricing decisions and changes.

The Pricefx Step-By-Step ‘How to’ Method to Optimize List Price Revision

To leverage Pricefx effectively for list price revision, manufacturers can follow these steps:

• Review Local Price Lists: Begin by reviewing local price lists and assessing pricing strategies to identify areas for adjustment or improvement.
• Utilize the Wizard for Pricing Strategies: Pricefx provides a user-friendly Wizard tool that allows Local Pricing Managers to adjust pricing strategies with ease. Whether it is changing margin adjustments for cost-plus pricing or implementing new pricing tactics, the Wizard streamlines the process for making strategic pricing changes.
• Calculate New Prices and Additional Price-Points: Pricefx automates the calculation of new prices and additional price points based on updated pricing logic and rules. This automated calculation ensures accuracy and consistency across all price lists, minimizing manual intervention and reducing the risk of errors.
• Make Manual Changes Based on Alerts: While Pricefx automates most list price calculations and updates, there may be instances where manual adjustments are necessary based on alerts or other relevant factors. Pricefx allows Local Pricing Managers to make informed manual changes, ensuring pricing accuracy and alignment with business objectives.
• Simulate Price Change Impact: Pricefx’s Price List Impact Simulation capability enables manufacturers to simulate the impact of price changes before implementation. By running simulations and analyzing potential business impact, Local Pricing Managers can make informed decisions and optimize pricing strategies for maximum profitability.
• Approve Independent vs Dependent Price List: Finally, Pricefx streamlines the approval process for price list updates, allowing pricing team members to review and approve changes with ease. The dependency can be a function of country, region, segment, etc.

Hypothetical Mini Case Study: Ace Auto Parts Leverages Pricefx for Efficient List Price Revision

Company: Ace Auto Parts, a leading manufacturer of spare parts for various car models across different regions.

Challenge: Ace Auto Parts was facing challenges with their manual list price revision process, which was time-consuming, prone to errors, and lacked transparency. The company struggled to keep pace with changing market dynamics and adjust prices effectively across different regions, product categories, and sales channels.

Solution: Ace Auto Parts implemented Pricefx to automate and streamline their list price revision process. This case study highlights how Pricefx addressed their specific challenges and improved their pricing efficiency:

1. Reviewing Local Price Lists:

Ace Auto Parts began by using Pricefx to review their existing price lists for different regions, such as Europe, North America, and Asia. They assessed their pricing strategies for various product categories, including brake pads, engine filters, and spark plugs, identifying potential areas for improvement.

2. Utilizing the Wizard for Pricing Strategies:

The user-friendly Pricefx Wizard empowered Ace Auto Parts’ local pricing managers to make strategic pricing adjustments. For example, in the European market, they decided to:

• Increase the margin on specific brake pad models due to rising material costs.
• Implement tier pricing for engine filters, offering discounts for bulk purchases.
• Monitor competitor pricing for spark plugs and adjust prices accordingly to maintain market competitiveness.

Calculating New Prices and Additional Price-Points:

Pricefx automatically calculated new list prices for all products across different regions based on the updated pricing strategies implemented through the Wizard. This ensured consistency and accuracy in pricing across all markets, eliminating the need for manual calculations and reducing the risk of errors.

4. Making Manual Changes Based on Alerts:

While Pricefx automated most calculations, local pricing managers used alerts to identify exceptional cases requiring manual intervention. For example, an alert might signal a situation where a competitor’s price change for a specific product in a particular region necessitates a manual price adjustment for Ace Auto Parts to maintain their competitive edge.

5. Simulating Price Change Impact:

Before approving the revised price lists, Ace Auto Parts utilized Pricefx’s Price List Impact Simulation feature. This allowed them to simulate the potential impact of the proposed price changes on factors like sales volume, profitability, and market share. By analyzing the simulations, they could refine their pricing strategies and ensure they were making data-driven decisions for optimal results.

6. Approving Country Price Lists:

Pricefx streamlined the approval process for the revised country price lists. Pricing team members could easily review and approve the changes within the platform, ensuring transparency and alignment with the overall pricing strategy before implementation.

Results:

By leveraging Pricefx, Ace Auto Parts achieved significant improvements in their list price revision process:

• Reduced time spent on manual calculations and revisions.
• Eliminated errors associated with manual processes.
• Improved price accuracy and consistency across regions and product categories.
• Gained deeper insights into pricing data and competitor activity.
• Made data-driven decisions to optimize pricing strategies for profitability and market share

Take Advantage of All Pricefx’s Pricing Features for Manufacturers

While we cannot underestimate their importantance, there is a lot more going on for manufacturers like yourself than refining and automating your list price procedures. It is one small cog in a wheel of pricing issues that you need to stay on top of. These days, wherever you look, manufacturing businesses have a lot to consider from ongoing supply chain disruptions, labor shortages to volatile raw material costs – and they will all continue to form obstacles to your profitability both now and in the future.

The good news is that AI (Artificial Intelligence) and pricing software automation technologies have enormous potential to boost productivity and efficiency, reducing costs in the long term – with many of their most impactful capabilities yet to be realized. With time, they are only going to get better and if you aspire to scale and mature your business, it could be advantageous to pave the way for pricing software now rather than later.

In this article, we briefly touched on some of the ways manufacturers can use pricing software for more accurate and proactive list price revision. Want a closer and more detailed look at what else Pricefx can do for your business? Check out our article below on more specific ways how Pricefx pricing software helps manufacturers:

Happy Pricing!