Plumbers’ Supply Case Study www.epacube.com 1

CASE STUDY

Plumbers’ Supply Company Brings Price and Profit Optimization In-house with epaCUBE Profit Optimizer®

Leading wholesale distributor is able to find new opportunities for profits with leading software solution.

CHALLENGES - Inconsistent pricing and too many manual overrides - Lack of visibility into impact of price changes

SOLUTION Brought pricing and profitability analysis in-house with help of epaCUBE’s FASTPATH program

RESULTS Can now instantly visualize and use the optimization results to identify and resolve issues with pricing and segments

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Looking to Drive New Profit “Like every distributor, we are constantly looking to drive new profit and better serve our customers,” says Sean Jones of Plumbers’ Supply Company. The New Bedford, MA wholesale distributor of plumbing, heating, air conditioning and well

supplies recently decided to focus their profitability initiatives on their pricing matrices and improved segmentation. “It seems that with each year that goes by, revamping our pricing matrix becomes even more important, yet it never gets done,” says Jones. “We originally looked at epaCUBE back in 2011 and we were extremely impressed with the analytic capability of the software.” But at that time, epaCUBE had not released their flexible cloud subscription model or their FASTPATH

implementation process, so Jones was concerned about the level of investment and staff commitment a pricing and segmentation project might involve. Plumbers’ Supply decided to turn to a pricing consulting service initially rather than implement epaCUBE’s Profit

Optimizer software. “At the time,” Jones says, “we lacked a full-time pricing person and felt a consulting service would give us some outsourced capabilities.” The Limits of Pricing Consulting “With our consulting service, we focused on low-hanging fruit and got some margin pick-up quickly,” says Jones, “but things got much harder as we added more products and customers to the analysis.”

Plumbers’ Supply felt limited by the number of metrics their consultant could analyze quickly. The service could analyze simple metrics like sales volume, but Jones wanted to take their segmentation analysis much further with metrics for sales opportunities, days sales outstanding and cost to serve. Adding that level of granularity to the segmentation proved to be a challenge for their consulting service. With epaCUBE Plumbers’ Supply is conducting a what-if analysis of price and segment changes with immediate visibility into the impact of those changes. It Was Time For a Change “We have nothing but good things to say about our pricing consultants,” says Jones, “but there’s only so far you can go with outsourcing.” Jones knew they needed to reduce the number of manual overrides at their locations, and the way to accomplish that was with an integrated software solution. “I was running reports all the time,” says Jones. “The integration epaCUBE has to our ERP system is huge.” Prior to epaCUBE, the pricing consultant

“Within 30 days, I completed the initial training, had data loaded and most importantly, had analytics and pricing guidance which I can use right now to make pricing decisions for gross profit improvement.”

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would make suggestions, Jones would have to format that changes into an acceptable format for his ERP software, import the changes into the software, and then implement the changes. “The process could take days,” says Jones. “We would have to work around their schedule, but sometimes there was just too much riding on each decision to wait that long.”

epaCUBE Price Optimizer allows Plumbers’ Supply to take control of their own pricing in their own timeframe. Using industry best practices built into the software, epaCUBE instantly presents opportunities for gross profit improvement through optimized pricing without having to wait for a consultant’s spreadsheet. Plumbers’ Supply can then validate and adjust the optimization recommendations based on their own knowledge of their customers and markets. Then, before implementing a

change, Jones can review a what-if analysis to fully understand the impact of new pricing moves. epaCUBE Made it Easy Fortunately for Jones, things had changed at epaCUBE over those four years as well. The team at epaCUBE had worked hard to make the software easier than ever to use, changed their pricing model to a flexible, cloud

subscription and began offering a new FASTPATH process where epaCUBE experts help you run the software for immediate profit gains. Plumbers’ Supply had recently implemented a business intelligence solution that suffered from performance issues and Jones was worried that implementing epaCUBE would be similarly frustrating. “Setting up epaCUBE was comparatively a breeze,” says Jones. “With epaCUBE, you’re not pulling data daily or hourly,

so there are no performance strains on your system. And their consulting team made everything easy for us to get started and find new profit opportunities.” Real Results, Real Fast While it is still too early to estimate the full impact of the epaCUBE software solution, Jones is happy with the initial phases of the project. “Within 30 days” says Jones, ”I completed the initial training, had data loaded, and most importantly, had analytics and pricing guidance which I can use right now to make pricing decisions for gross profit improvement.” Using epaCUBE, Plumbers’ Supply could instantly visualize and use the optimization results to identify and resolve issues that had developed over time. epaCUBE allows Plumbers’ Supply to analyze pricing by product or customer, product or customer group, a combination of different customers groups who buy different product groups, by vendor, branch or salesperson. They can now continuously improve your gross profits through optimized pricing by analyzing the gross profit

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improvement opportunities inside their sales, product and customer data.

“Thanks to the immediate analysis inside of epaCUBE, we can identify places where we can actually simplify our pricing

matrix and make more profit,” says Jones. Jones estimates that the potential for return on investment with epaCUBE is only limited to the amount of time a distributor puts into it.

“epaCUBE is flexible enough to fit into your schedule and the more time you spend with it the more opportunities you find to increase profit,” says Jones.

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epaCUBE Profit Optimizer software and our new FASTPATH implementation process has changed everything you know about wholesale distribution profit optimization by and the results are clear: The average distributor using epaCUBE realized a 5.5% gross profit improvement which translates into over $3 million in new gross profit and over $21 million in increased enterprise value.