We supported a Technical Trading Company with pricing and margin optimization leading to a 10% potential gross margin improvement.
Client
A technical trading company selling MRO products and services to various industries
Approach
By using traditional-hypothesis-driven and machine-learning data analysis techniques, we identified a large variety of revenue pockets with below average margins, that could not be justified.
We designed a roadmap of improvement actions which consisted of three main area’s:
- immediate wins: which would lead to margin improvement by only changing parameters in the ERP system
- quick wins: which would lead to margin improvement by a mixture of changing system settings and behavioral change
- long term wins: improvements by a complete redesign of customer segmentation, discount structure and implementing value selling techniques
Results
A clearly identified margin improvement path, leading to a potential of 10% margin improvement over a period of 1 to 2 years. Practically defined and actionable improvement measures including a change management strategy and project management structure.
