Pricing Excellence at Cleaning Chemicals Supplier
Situation
Global cleaning chemicals supplier with both street and contract accounts
Margin losses due to lack of cohesive pricing policy, processes and tools
- Significant gross profit and operating profit variation across operating units
- No policy on how to set list prices, discounts or evaluate contract accounts
- Unable to understand pricing impact across businesses due to reporting differences
- No direct ownership or accountability for pricing
Approach
Developed global pricing architecture, guidelines and processes
- Systematic process for SKU cross-referencing and benchmarking
- Guidelines for account treatment based on standard rules and street discount structures
- Contract account process to design, measure and review contract accounts
- Developed structure, incentives and tools to manage pricing excellence
Piloted new structure to refine approach/tools
- Architecture and tools in two geographies for 6 months
- Implemented structure, policies and tools to capture $15M+ in margin improvement
Established pricing governance structure and global roll-out plan
- Pricing center of Excellence and operating unit pricing accountabilities
- Pricing Operating manual; concepts, roll out approach, tools and structure
- Global roll-out approach, timing, investment and PMO structure
Impact
Achieved consistent global pricing architecture and implemented ‘quick wins’
Drove $15M in profit contribution from pilots and $60M+ from broad roll-out