- Company had over 20,000 active SKUs with 90% of revenues generated by just 5,000 SKUs.
- Wide range of healthcare products including continence aids, gloves, infection control, urology, wound care and general medical consumables.
- Deep culture of cost plus mark up to set list prices in the system and customer net prices.
- Sales executives able to set prices independently, leading to inconsistent price points in the market place.
- Procurement teams’ cherry picking of lowest priced items from 3-4 suppliers causing margin erosion.
- Immediate EBIT gains from Project Blackbird to develop proof of concept and confidence in algorithmic pricing
- New pricing architecture to simplify the customer price generation
- Engage a National Pricing manager and analysts team to build out pricing capability across the business.
- 900 basis points of margin improvement driven by Project Blackbird SKU price optimisation project in the first 6 months PILOT program. EBIT gains of $1.0M on revenues of $11M and a further $4.3M EBIT on revenues of $75M
- Development of new pricing strategy + structures using detailed mapping of the value drivers for each individual SKU to inform future price rise improvements.
- New approach to selling on value using Customer Value Discovery program.
- Development of National Pricing Manager role and team to manage pricing structure and margin expansion program under a centralised strategic function.
- Development of a Pricing mastermind to support the centralised pricing management function