Solution design: Quickly calculate and publish new price lists based on supplier cost changes or changes to pricing strategy

In this case, we want to update pricing based on cost and strategic changes, showing market agility and maintaining or improving margins over time.

Situation description

For the purposes of this flow, we will assume the role of a pricing manager at a large global distributor. In the current situation we have a high number of costing and strategy changes but with inconsistent, error prone and manual processes that are too time consuming. By using Pricefx capabilities you can however, automate pricing updates with real time cost and strategy changes informed by in line decision support. This will give you consistent or expanded margins and improved strategy and sales alignment. 

Workflow

Let's see how we can improve agility and margin with mass changes in the Pricefx Live Price Grid (LPG). 

Step 1: Understanding the Live Price Grid

For this use case we will start from the home page, where we can find our price lists in the Live Price grid section. To access LPG, go to Pricefx ➡️ Price Setting➡️ LPG

You can have the price lists categorized either by business unit, geography, individual, user or team.

The price list we are using for this flow (124) has a lot of information that is necessary from a pricing perspective such as branch specific pricing, product name and product hierarchy, or price selection. Price selection means that multiple prices and strategies are calculated, but only one is selected for an individual line item. Other information available around the individual line item includes active price and result price.

In this case, we can see that there is an override on the first line item and there is a specific reason code there is a manual price override and maybe there is something around market forces here that are requiring this.

 There's other contextual information as we move along in terms of things like margin flags, minimum margin information, as well as competitive information.

In this case, you can see where we're positioned versus our next two most common competitors in the marketplace.

 By clicking on the Competition Data we can see this in more detail. In addition, we'll see reviews around costing information in terms of total trending.

You can vizualize this information specifically to understand what the recent trends have been in the last couple of cost changes over the last weeks and months. To do this, click on Cost History Chart and select the time interval you are interested in by hovering the cursor over it.

 We also have tier level pricing information in the case that we have quantity breaks. Whether they are defined in a linear format or they're defined within a curved structure, these are elements that can be reflected within the price list as well. Finally, there are some other pricing strategies or more strategy information that's reflected in terms of recommended retail pricing (if that's information that's passed from the supplier and required), how we differ from retail pricing recommendations, anchoring strategies and more.

Step 2: Mass price changes

Let's pivot to a mass price change now. There's a variety of ways we can think about this. One would be an absolute override, which is what we've seen already on the line, item by line on a basis.

 We could also think about mass edits in terms of being able to override pricing in a more formulaic fashion. screen (3:21 + 3:25 +3:28)

Step 3: Use the Price Setting Wizard

 For this use case, we will use the price setting wizard. To access it, click on Price Setting Wizard  in the LPG, under Calculation Inputs> Comparison Type.

 When you open the Price Setting Wizard you can select to either create a simulation or a mass price change.  In this case, we'll go through a two-step process. To do so, click on the Assign Strategies button.

Step 4: Review strategies

In this case, after you clicked on Assign Strategies in the wizard, you can see at the highest level the top three available strategies are anchoring cost plus and cost plus with a margin check.

However, in this case, we will manage strategies by exception.

Looking at packaging supplies, envelopes and bubble mailers, we're actually selecting a different strategy, in this case cost plus with the margin check as our primary strategy.

 That could be changed here if required to anyone of our out-of-the-box strategies like anchoring, competitive cost plus recommended retail and others or something that's more bespoke and configured within the system.

Once we're happy with the actual strategies that are put in place, we can make adjustments to individual strategies. For this, you will close the dialogue window, then click again on Assign Strategies.

For example, on our cost plus strategy. We can modify what the plus component of cost plus is. If we want to increase this from 55 to 65, we can make that change.

Make the change you want and click Add.

If you want to create additional exception rules, you can do this at this point. Once all those changes are made, you can continue to the mass price change and recalculate the live price grid.

 Step 5: Submit or approve changes

The final step once we've recalculated our pricing based on the mass price changes would be to either mass or individually submit and approve based on all the changes that we've made or potentially export this out for more analysis or for approval from a customer specifically.

This concludes the flow in our solution for improved profitability by using Pricefx to manage and automate mass price changes.