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This Supply Chain Brain article from Zilliant General Manager of Commercial Excellence Barrett Thompson shares why, if supply-chain resilience is defined as the ability to steel the supply chain against future disruption while quickly rebounding from past disruption, reimagining pricing and sales is akin to steeling the company’s P&L.
COVID-19 has been a significant disrupting factor to the global supply chain. It forced an immediate shift to digital channels, eroded relied-upon logistical strategies, and forced companies to re-think in-person interactions of every kind.
As we embark on 2021, it might be tempting to settle into the new reality, either accepting it as status quo or awaiting a return to normalcy. However, it’s clear that volatility is the new normal for the time being. While it’s tempting to focus the topic of supply-chain disruption on sourcing and logistics, there’s a peripheral challenge that’s closely related and, if neglected, could degrade financial performance, eroding the good results of the many supply-chain pivots that took place in 2020.
I’m referring to your internal pricing, cost-management and sales commercial guidance processes: the supply chain of internal data, covering how information is gathered, analyzed, disseminated, acted upon, and measured. If supply-chain resilience is defined as the ability to steel the supply chain against future disruption while quickly rebounding from past disruption, reimagining pricing and sales is akin to steeling the company’s P&L.
The costs of inefficient and ineffective processes within pricing and sales can be significant, yet are often hidden from view. A recent Global B2B Benchmark Report analyzed the aggregate cost of these sub-par practices, and learned that B2B companies lose up to 17.1% of annual margin and 31.8% of annual revenue due to these issues. It’s possible to recapture a portion of this lost margin, and anywhere from 1% to 3% in annual margin and 5% to 15% of same-customer sales can be reclaimed. Before you can embark on that path, however, you must determine where margin loss may be occurring.
Following are a few key questions about your company’s pricing and sales processes to consider, along with a look at how enterprising companies are utilizing artificial intelligence and smarter software to address those questions.
Read the full article on Supply Chain Brain.