Chemical Manufacturer Implements Value Pricing to Reduce Margin Erosion

Client Context

A privately owned national distributor of industrial chemicals with multiple distribution centers was experiencing margin erosion due to non-standardized order-to-delivery processes. The lack of consistency in quoting, price changes, and customized pricing created inefficiencies and financial losses.

Key Challenges

• Absence of standard practices in handling key business processes.
• Inconsistent quoting and pricing adjustments, leading to margin erosion.
• Lack of accountability in order-to-delivery workflows.
• High invoicing error rates, affecting operational efficiency.

Approach & Key Success Factors

EFESO developed a structured, standardized approach to enhance efficiency and profitability:

1. Playbook for Standardized Business Processes

• Created a best practices playbook to ensure consistency across quoting, pricing, and order fulfillment.
• Established a culture of performance accountability across teams.

2. Process Optimization & Continuous Improvement

• Implemented standardized procedures for ordering, invoicing, and purchasing.
• Introduced performance tracking systems to ensure accountability and sustain long-term improvements.

3. Pricing Standardization & Margin Protection

• Developed a formalized price book process to establish accurate list prices.
• Reduced margin erosion by improving price management discipline

RESULTS

$3.9M

Increased EBITDA

30%

Increased quote-to-yield rate

60%

Reduced invoicing errors