Industry: Manufacturing
Margin leakage at an industrial components manufacturer
The same product was sold at widely different net prices, with no commercial explanation for the gap.
Starting point
The company sells industrial components to distributors and OEM customers through a sales team with wide discount freedom. The price list was clear, but gross margin varied sharply between customers of similar size, and nobody had a complete view of what happened between list price and realised outcome.
What the system did
One year of order-line data was uploaded, and the deterministic analysis showed price dispersion per product, discount leakage by rep and customer segment, cost increases that were never repriced and lines sold below cost. AI interviews with the sales director and reps explained how discounts were actually set. Findings were ranked automatically by value.
Outcome
Management received a presentation with exact price bridges, a prioritised list of customer agreements and product groups to review, and hypotheses to test in a workshop — all ready in two days. The discount mandates turned out to be unclear, and the quickest win was in the tail of smaller customers: tighter discount rules there recover the leaked margin without difficult price negotiations. The analysis identified €73,000 of quick, simple potential, with further initiatives to explore running into the millions of euros.