Erik Reiter
Price management in the world of automotive suppliers: anyone who starts to deal with it becomes aware of the complexity and the resulting risks. Long-term customer contracts, technical changes, amortizations and claims in hundreds of projects with thousands of part numbers pose daily challenges for sales departments.
Errors in price management can have a significant impact on margins and ultimately on competitiveness. Yet many companies continue to work with outdated methods such as Excel spreadsheets or isolated tools that encourage errors and prevent transparency.
How can you ensure that your prices are not only correct, but also strategically optimized? In this blog, you will learn how modern digital solutions can revolutionize your price management and maximize your margins.
1. The challenges of traditional price management
The complexity of price management in the automotive supply industry is enormous. The typical challenges include:
a) Susceptibility to errors due to manual input
Manual processes harbor the risk of input errors that can lead to incorrect prices. A transposed number in an Excel spreadsheet or an incomplete calculation can quickly lead to the loss of margins or even customers. In particular, the time-consuming transfer of many changes, amortizations or claims to the price list is a known source of error.
b) Lack of transparency
Many companies find it difficult to maintain a clear overview of all price components. Changes and claim processes are often handled in isolation, which makes tracking difficult.
c) Time-consuming processes
Manual price management is not only error-prone, but also time-consuming. Coordination between different departments, obtaining approvals and processing changes can take days or even weeks.
d) Lack of adaptability
In an industry that is characterized by price pressure and dynamic customer requirements, companies need flexible systems that can react quickly to changes. Traditional methods do not offer this flexibility.
2. How you can gain control and efficiency
The good news is that modern digital solutions offer an answer to these challenges. They not only create transparency and efficiency, but also help you to make better strategic decisions. Here are the most important approaches:
a) Automated price calculations
Digital systems eliminate the need for manual input by automatically calculating and updating costs and prices. This reduces errors and speeds up the process considerably.
b) Integration of change and claim management
An integrated system combines price management with change and claim processes. This means you always have an overview of changes and their impact on your margins.
c) Real-time transparency for the entire price management process
Digital solutions give you access to up-to-date data so that you can see how profitable a project is at any time. This enables you to react proactively to risks and take advantage of opportunities.
d) Automated approval processes
Modern tools make it possible to approve prices, changes and claims digitally. This saves time and ensures clear compliance.
e) Automatic filling of customer CBDs (cost break-downs)
The laborious and error-prone process of filling customer CBDs can now be fully automated.
3. Practical example: How a supplier gained control over its price management
A medium-sized automotive supplier was struggling to maintain its margins. The problem lay in inadequate price management, which was heavily dependent on manual processes and fragmented tools.
After the introduction of a digital price management platform, the picture changed radically:
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Time savings: calculating and approving prices now only took a few hours instead of days.
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Transparency: All price components, including changes and claims, could be viewed centrally.
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Error reduction: Automated processes eliminated the most common sources of error.
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Margin increase: The introduction of profit-oriented change management and active claim management significantly increased project margins.
4 The advantages of strategic price management achieved through digitalization
The digitalization of price management not only offers operational advantages, but also strategic opportunities:
a) Better customer relationships
Transparent and efficient price management shows your customers that you work professionally and are reliable. This strengthens trust and long-term cooperation.
b) Greater competitiveness
By being able to adjust your prices flexibly and precisely, you can react more quickly to market changes and secure a competitive advantage.
c) Sustainable profitability
Strategic price management ensures that you not only achieve short-term profits, but also remain profitable in the long term.
5. How to implement digital price management
The path to efficient and strategic price management starts with clear steps:
a) Analyze your current processes
Identify weaknesses and bottlenecks in your existing price management. Where do most errors occur? Which processes take the longest?
b) Define your goals
Do you primarily want to save time, create transparency or increase your margins? Clear goals help you to stay focused.
c) Selecting the right tools
Look for solutions that have been developed specifically for the requirements of the automotive supply industry. Look for seamless integration and ease of use.
d) Training your team
A digital transformation requires not only new tools, but also an adaptation of the way of working. Train your team so that they can use the new systems effectively.
e) Continuous optimization
Digitalization is an ongoing process. Collect feedback and regularly adapt your systems to new requirements.
6 Why you should act now
The market for automotive suppliers is becoming increasingly demanding. Customers expect fast response times, precise prices and maximum transparency. Companies that fail to meet these expectations risk being left behind.
With modern price management, you can not only work more efficiently, but also be better positioned strategically - and secure your margins in the long term.
Conclusion: Full control, higher margins
Blind price management is a thing of the past. Digital solutions enable you to automate your processes, create transparency and maximize your margins.
Take advantage of this opportunity: arrange a live demo with Digital Automotive and experience for yourself how modern price management can boost your competitiveness.
