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Optimizing Gross Margin & Pricing over continuously cleansed and up to date product data

Data Synchronization. Master Product Database. epaCUBE. Data Governance Rules. Data Mapping. Product Data Cleansing. Margin Manager. Optimizing Gross Margin & Pricing over continuously cleansed and up to date product data. epaCUBE Agenda. New Pig Pricing Process Summary

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Optimizing Gross Margin & Pricing over continuously cleansed and up to date product data

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  1. Data Synchronization Master Product Database epaCUBE Data Governance Rules Data Mapping Product Data Cleansing Margin Manager Optimizing Gross Margin & Pricing over continuously cleansed and up to date product data

  2. epaCUBE Agenda • New Pig Pricing Process Summary Major Goals & Objectives of Pricing Project • epaCUBE Margin Manager Demonstration • epaCUBE Architecture & Trend Integration

  3. New Pig Pricing Process Summary Major Goals & Objectives

  4. Final Domestic Direct Pricing PM Pricing Process Shared Directory Of Pricing/Costing Spreadsheets Pricing/Costing Spreadsheets Created/Updated Cost/Price Updates Changes Divisions Final Division Pricing Review By Price Type Customer New Pig SPORT DIV Pricing Process Vendor Cost Updates New Pig – Current Pricing Process Summarized Trend

  5. Pricing Management Flow with epaCUBE • Major Goals: • Build on/Learn from Current Pricing Process • Reduce time, labor cost in Pricing Process • Create Parallel Processes where possible • Create On-Line System to Automate & Streamline Process • Model the “EFFECT OF CHANGE” - before LIVE System Processing • Add Flexibility to Process • Add Visibility to Process (at all levels) for Better Decision Making Domestic Direct Pricing epaCUBE Trend Divisional Pricing New Pig SPORT

  6. epaCUBE Architecture Overview and Demonstration

  7. Costing Ingredients Pricing Ingredients Unit Quantities Data Whse Trend SPORT Vendors Content Providers Your Own Systems Mergers & Acquisitions Trend - Price Discount Records Trend - Rebate Record Trend – Price Sheets Competitive Pricing – Excel Proposed Customer Pricing from Excel Trend – Sales Manager Trend – Data Warehouse Forecast – Excel Spreadsheet Trend Trend • Cost & Price Calculation Engine • Impact Analytics • What if Modeling • Price Matrix/Book • Creation (3) Critical Ingredients for Accurate Cost, Price and Margin Modeling Flexibility Scalability Visibility

  8. New Pig Pricing Strategy Ingredients • PM’s Strategy • Each PM was responsible for their line and product pricing. PM suggestions were review by upper management before final price for an items was determined • Depending on product the prices could be different within product lines, marketing strategy, competitor pricing, etc • Domestic Direct (NPC) information only reviewed • Pricing Criteria for looking at products/Product Lines • Cost Increase/Decrease • Estimated Cost increases • Current Margins • Margins raising prices • What Competitors are doing • Competitors pricing for Exact products current year • Competitors pricing for similar products current year • Direction from Domestic Direct (Increase sls by 300k, buy raisingprices) • Where we are in the market • Market Trends (cost of steel, cost of oil) • Information from vendors (suggest list price) • Sales trends • Customer trends • Do we stock the item or drop-ship • Exclusive to New Pig • Better quality products • Division Pricing Process • By Price type and/or Customer • Depending on what the price type or customer is, divisions involved are • Corp Sls, Blue Ribbon, SK, IDD, INTL, • 77 different price types • Cost Increase/Decrease • Current Price • Current Margins • Affect of raising prices • What Competitors are offering • Notes from previous year • Competitors pricing for Exact products current year • Competitors pricing for similar products current year • Customer trends • Customer’s input • Customers Increase • Contracted prices frozen • Contracted agreements • Compare price types against other Price types • Are we offering the customer the correct price discount • Special pricing on accounts • Special pricing on Price types • Price vs. Listed Prices • Acceptable Margins Company/Division

  9. Selection of Ingredients (Which Ones & How Much) Vendor(s) Customer(s) Customer Type(s) Product Price Type(s) Sales – Actual/ForecastedOver what Time Period etc. Flexibility of epaCUBE Architecture WHAT HOW WHAT YOU GET Ingredients Recipe End Result Cost Ingredients Rebate Ingredients Pricing Ingredients Customer Ingredients Vendor Ingredients Competitive information Product Attribute Ingredients Actual vs. Forecasted Sales • Impact Analytics • What If Modeling • Price Matrix/BookCreation

  10. epaCUBE Flexibility: Different Ingredients–Different Results CALCULATION SCENARIO: All the Ingredients to Analyze the IMPACT of… ALL Supplier Cost Changes ALL Products ALL Customers

  11. epaCUBE Flexibility: Different Ingredients–Different Results CALCULATION SCENARIO: All the Ingredients to Analyze the IMPACT of… ACME Supplier Cost Changes On Customer 12999 with Competitive Pricing & Forecasted Quantities

  12. End Result – Calculation Scenarios ALL VENDORS/ALL CUSTOMER ACME VENDOR/ALL CUSTOMER ACME VENDOR/ CUST 12999 VISIBILITY into the IMPACT of CHANGE on Pricing, Rebates/SPA, Costs, and Gross Margin based on Past, Current or Future Effective Dates

  13. AB VENDOR/ CUST 12999 25

  14. epaCUBE Architecture & Trend Integration

  15. epaCUBE/Trend Data Flow epaCUBE Synchronizer epaCUBE Margin Manager Final Prices loaded Into Production Trend/SX.e epaCUBE MS SQL Database epaCUBE Product Information Manager (MS-SQL) ICSW Costs PDSC PDSR Custom Trend/SXE Connector Synchronizer Costing/Pricing Records ICSP, ICSW, ICSC PDSC & PDSR – CHUI PDSP – GUI Price Sheets Custom Pricing - Cost &Price Records loaded - Vendor Cost Changes loaded New Pig SPORT • Other Ingredients Loaded (i.e. Forecast, • Competitive Pricing) - Impact & What If Analysis Sources of Product & Costing Data - Results of Margin Manager loaded into Trend/SX.e

  16. New Pig Phased Approach to epaCUBE Implementation

  17. “Divisional Impact/What If Visibility by Cust/Cust Type/ Prod Price Type/Prod Line/Market, etc” “Domestic Impact/What If Visibility by Prod Line/Prod” epaCUBE Connector Costing/ Unit Sales epaCUBE Synchronizer & Product Manager Database epaCUBE Margin Manager DIV CHANGES PM CHANGES Pricing Phased/Parallel Approach to epaCUBE Implementation Phase 1: Impact/What If VISIBILITY-No Change to Process Trend DIV PM BS WA/JP Domestic Direct Pricing Process Divisional Pricing Process JUNE JULY AUG SEPT OCT NOV DEC

  18. “Divisional Impact/What If Visibility by Cust/Cust Type/ Prod Price Type/Prod Line/Market, etc” “Domestic Impact/What If Visibility by Prod Line/Prod” epaCUBE Connector Costing/Pricing Unit Sales Analytics Maintenance Analytics Maintenance Synchronizer Margin Manager Phased/Parallel Approach to epaCUBE Implementation Phase 2: Impact/What If Visibility-Process Change Trend Domestic Direct Pricing Process Divisional Pricing Process JUNE JULY AUG SEPT OCT NOV DEC

  19. Parallel Processes:i.e. Price Management by (PM X Category) & (Division X Category X Customer)

  20. New Pig Benefits… • Build on/Learn from Current Pricing Process • Reduce time, labor cost in Pricing Process • Create On-Line System Automate & Streamline Process • Model the “EFFECT OF CHANGE” - before LIVE System Processing • Add Flexibility to Process • Add Visibility to Process (at all levels) for Better Decision Making • Create Parallel Processes where possible

  21. Data Synchronization Master Product Database epaCUBE Data Governance Rules Data Mapping Product Data Cleansing Margin Manager Optimizing Gross Margin & Pricing over continuously cleansed and up to date product data

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