Sector:
Manufacturing
Service Lines:
Pricing
Client Situation
A U.S. mining and construction supplies manufacturer was experiencing flat sales and margins
New leadership needed to quickly address the challenges, which included streamlining the business in various ways to get the business growing profitably
How We Helped
Collaborated with management to understand views on the challenges, which included a perceived need to have a broad product portfolio and competitive pricing in order to maintain its customers and win business
Conducted a deep data dive into its products, customers and pricing performance to identify realized profitability
Analyzed transaction level sales data to understand what customers were buying, which products were selling together, and how prices were set
Worked with the commercial team to identify which products could be re-priced to improve margins, which could be substitutes or rationalized and help reduce costs and complexity to manage
Result
Recommended incremental re-pricing of ~25% of the portfolio, which led to significant margin improvements
Identified an opportunity to reduce the number of SKUs in its product portfolio by ~20% due to low and negative margins and low customer demand
Recommended additional investigation into several manufacturing costs areas that would be impacted with the changes in the product portfolio which would generate cost savings
Client began implementing a number of the recommendations following the project which led to quick wins