Regain Control of Your Pricing

Transcription

1 Regain Control of Your Pricing JD Edwards Base and Advanced Pricing Strategies Session ID: Prepared by: Dwight Moore Senior Associate Grant Thornton LLP 04/22/2018 Remember to complete your evaluation for this session within the app!

2 Is this the feeling you get when you think about pricing maintenance? Lets Simplify

3 About Me - Dwight Moore JD Edwards Manufacturing and Distribution/ Transportation Team Lead on multiple net new Implementations and Manger of Technical Upgrades Industrial Manufacturing - Mining Furniture - Public Utilities Pharmaceuticals - Pet Food Manufacturing Mexico - Canada Previous Presentations: E1 Pages and UDO in 9.2 Openworld 2016 E1 Page Tips and Tricks InFocus 2016 Utilizing CafeOne OpenWorld 2015 Hobbies Fly Fishing Cooking

4 About Grant Thornton a world leading audit, tax and business advisory firm We are the U.S. member firm of Grant Thornton International, a global organization of member firms providing audit, tax and advisory services to clients for more than 90 years. Best network in 2013, best managed in 2014 and, in 2015, both employer of the year and best leadership development program. PEOPLE AND GROWING Grant Thornton member firms worldwide U.S. member firm OFFICES AND GROWING Revenue (USD) $4.6 billion $1.56 billion Personnel with partners 42,204 8,000+* Partners 3, Offices 733 offices 58 COUNTRIES Statistics as of: Sept. 30, 2015 Dec. 31, 2015 *June 1,

5 About Grant Thornton JD Edwards practice 26 Presentations at Collaborate '18 PM and functional expertise Technical Specialized functional resources Project management office Implementations Upgrades Mobile applications Third party integration architecture Business process re-engineering Managed services (functional) User materials and training Financials CNC Development Workflow Security management Technical management Database management Distribution Manufacturing HR / Payroll CAM Project advisory Infrastructure / hosting Managed services (technical) Private cloud Disaster recovery Security Development (FRICE) Oracle Leadership The Leading Oracle Platinum Partner presenter at COLLABORATE, INFOCUS and OpenWorld conferences (more presentations than any other Platinum partner in the past 3 years) Featured in PROFIT magazine JD Edwards Special Issue 2015 Teaming with JDE product development we work with JD Edwards on enhancing the code base for customers (e.g. OneView Reporting, Revenue Recognition, Leasing Standards, Configurator) Experience and recognition More than 250 JD Edwards implementations and upgrades as a practice Over 20 implementations in the past 5 years Trusted business advisor Gap assessment Transformation Industry point of view Proven methodology Process excellence Benchmarking ERP governance Data governance Master data management Reporting strategy Change management Cloud roadmap / strategy FASB planning Chart of accounts optimization Over 50 upgrades in the past 5 years Oracle JD Edwards recognized Grant Thornton with its 2014 and 2015 JD Edwards Partner Excellence Award for Outstanding Upgrades 2016 JD Edwards Partner Excellence Award for Vertical Industries 2017 JD Edwards Partner Excellence Award for User Adoption 85

6 Agenda The Goal = Simplified Maintenance Pricing Structure Example Cases Health Analysis Tools/ Capabilities

7 Common Results Do You Keep external price lists? Spend a long time updating prices? Have limited resources who understand the setup? Make manual price overrides at order entry? Have a number of Pricing Credits to Invoice monthly? Want to explore creative Pricing Methods but am not sure where they should fit? Use the Pricing Workbench? Use OneView/ UX One to analyze Prices and Profit Margins over time?

8 Why Am I Here "Discoveries like this is why we do system implementations" Client CEO "If we get this pricing cleaned up it will pay for the entire project" Client CIO 147 Active pricing Adjustment Definitions 40 Adjustment Definitions had been used in past 18 months 10 Adjustment Definitions were necessary to meet the pricing strategy Loopholes from too many open Definitions. Hierarchy setup was preventing item groups from working. Schedule was defined in a way that allowed specific customers to receive multiple discounts. Accrual Details were not setup to forecast accurate Credits. Profit margins on these customer orders were less than half what they were supposed to be. In some cases negative margins were being realized. $100K unplanned credits monthly. Solution: Utilized the simplified setup model below

9 The Goal My Goal: Simplify your pricing Maintenance without changing the number of offerings. Limit the number of definitions needed. Pricing is Important It s often the first question a customer asks. "How Much?" Many strategies on how to setup pricing One of the only remaining Advanced modules It does not require a full project commitment to regain control of your pricing

10 Simplified Strategy One Hierarchy One Schedule for all customers Setup general Definitions PROMO, MARKUP, %DISCOUNT, AMOUNTADD Use very specific details Customer "A" gets 10% discount in July Understand your pricing requirements

11 Pricing Structure

12 Sales Pricing in JD Edwards Base Pricing is "static" data. Advanced lets you qualify based on any number of variables. Customer Master Item Master Base Price Sales Order Entry Advanced Pricing: Order Details Item Groups Customer Groups Quantity Weight Accruals Promo Codes

13 Base Pricing Item Price Item Branch Customer Simple Groups UOM Effective Dates Currency

14 Advanced Pricing Discounts Item Groups Quantity Breaks Order Level Markups Order Groups Weight Line Level Promo Codes Customer Groups Percent Changes Amount Changes Accruals Variable Tables Formulas Incentives

15 Pricing Setup Base Price P4106 Hierarchy P40073 Customer Master P03013 Groups P4092 Item Master P4101 Definition P4071 Order Entry P4210 Schedule P4070 Details P4072

16 Hierarchy Hierarchy Groups Definition How do you qualify your price? By Customer By Item Groups Combinations Schedule Details The sequence for the program to check

17 Hierarchy Questions Item and Any Customer Item and Customer Group Item and Customer General Guidelines: Should be sequenced in order of most specific to least specific. Customer and Any Item Customer and Item Group Item Group and Any Customer Any Item and Customer Group Item Group and Customer Group ex: East Region Customers ordering Blue Items Any Item and Any Customer

18 Groups An easy way to simplify pricing maintenance Items Customers Order Codes

19 Definition Called different names: Adjustment Name Definition Type Preference Name Rule WHERE PRICING BREAKS DOWN The Wires. Less than 15?!

20 Definition Questions Qualified by Group? Based on Quantity, Amount, or Weight? Apply to the Line, Order, Basket, or Volume? Display on Invoice? Can they be Manually overwritten? Hierarchy Groups Definition Schedule Details What will qualify the Rule (Item Group) and what basis code will be used in the details (%, Amount) Request examples of the Sales Entry and the Invoice for each Definition General Guidelines: Don't setup definitions for specific customers or specific items. One Definition can be used for all pricing which is qualified the same way.

21 Schedule Which sequence do we want to apply the Definitions/ Types on the Sales Order Example: should apply Base Price before applying a discount or markup. Common Mistakes: Not being careful about how discounts may add on to each other Example: Customer Qualifies for -5% discount on all orders Customer also Enters a Promo Code for $50 off on any order Enters an order for an item with a base price of $1000 Which discount should be applied to the order first? ( ) *.95 = $ (1000 *.95) 50 = $ Hierarchy Groups Definition Schedule Details

22 Schedule Questions Do we need more than 1? This is what ties the customer to which pricing rules will apply to them. Skip To

23 Details Hierarchy Groups The Specifics: Where = Which Definition Definition Who What Items Schedule When How Much Details

24 Details Questions If you have a definition for PROMO code discounts even if they are different amounts for different customers you don t need different definitions because you can define the WHO and HOW MUCH in the details. This seems obvious but is probably the number one mistake I see made in pricing. Basis Code The Type of Add on or Discount %, Amount

25 Simplified Definitions Common Maintenance Path Hierarchy Maintenance with Simplified Definitions Hierarchy Groups Customer Master Groups Customer Master Item Master Item Master Definition Definition Schedule Customer Master Schedule Customer Master Details Details

26 Example of Simplified Definition Common Setup Definition PROMO05 PROMO10 PROMO15 Schedule PROMO05 PROMO10 PROMO15 Details Promo 5% Promo 10 % Promo 15 % Simplified Definitions Definition PROMO Schedule PROMO Details Promo 5% Promo 10 % Promo 15 %

27 Example of Simplified Definition Current Every 6 months we run a special promotion for new items. % discount Different items each time Different percentages Different code to be used Customer was creating a new Definition every 6 months. Left loopholes on certain items Frequent edits to Definitions, Schedules, Details Messy Schedules Specified specific items in the details Why Not Create a single Definition "PROMO ITEMS" which qualifies by item group Define the item group to look at a item UDC code. The only work for new promotions is to setup a new detail record pointed at the new item code. Add the UDC code to those items in the item master

28 Health Analysis

29 Health Analysis Active Adjustment Definitions F4072 or BV v4074a Adjustment Definitions used in recent months F4074 Number of Schedules assigned in the Customer Master F03012 Number of Schedules used in recent months F42119 Generate Pricing Workbench Review Pricing Contract Evaluate Effective Dates

30 Example 2 Company had decent pricing setup but had created customer specific discounts that were not getting updated with the annual price increases. Solution: used the system implementation to communicate the need to renegotiate new contracts and setup a formal contract sheet with a annual expiration.

31 Example 3 Configured items Price based on Components If green paint was selected then the price would be cheaper than if gold paint was selected. Full AS 400 Custom solution. Solution: Used Basis Code 8 Pointed pricing to levels set on the configurator parts list. Depending on the code we then set discount levels in a basis code 8 table. This added a level of depth to our pricing

32 Example 4 There was a volume incentive program which would return the customer a 10% credit if they purchased a certain volume over a three month time period. They were not accruing for these rebates in the system so it became very difficult to prepare for the credits and know when a customer actually hit their threshold. Solution: Setup a single Accrual Definition and defined the customers in the details.

33 Example 5 Web Store integration Customer had special online promos and had a custom interface to pull that code into JDE. CSRs were retroactively updating the promo code on all web orders They were upgrading to Premier Way's Smarter Commerce webstore. Solution: Utilized the Z tables built for Pricing integration with smarter commerce. No customization needed.

34 General Guidelines With the goal of keeping Maintenance Manageable Use "add on" not Override prices. Use Percent not Amount. Start with Base price. Aim for a single Schedule for pricing Aim for a single Hierarchy for pricing Aim to keep the number of definitions under 15 Separate your Preference hierarchies from your Pricing hierarchies

35 Tools/ Capabilities

36 Pricing Navigation E1 Page vs Menus

37 Pricing Workbench

38 UX One (9.2) / One View (9.1) Business View - v4074a Table F4074

39 Advanced Pricing Possibilities Product Allocation Preference Item Restrictions Inventory Commitment preference Rounding Variable Pricing for regularly changing prices

40 Variable Pricing Variable Pricing is used for products whose price changes frequently or fluctuates daily. Often used for commodity pricing: Oil, Gas Uses a simplified table to store the date and price of an item. This table can be manually updated or interfaced into to populate

41 Summary Maintenance with Simplified Definitions One Hierarchy One Schedule for all customers Setup general Definitions Use very specific details Understand your pricing requirements Hierarchy Groups Definition Customer Master Item Master Think about Long term scale and Maintenance Schedule Customer Master Details

42 Session ID: Remember to complete your evaluation for this session within the app!

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46 Agenda About Grant Thornton Intro Pricing Structure Example Cases Health Analysis Tools/ Capabilities

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