Smart pricing

The majority of these processes, when monitored by Lantek 360, can be directly or indirectly tracked with data. Items such as material costs and miscellaneous direct costs can be directly tracked, while the CNC generated and miscellaneous parameters that are saved in the databases from the bidding process, order processing, manufacturing order issue, to and delivery notes can be tracked indirectly.

Smart pricing systems make it possible to determine the influence that each of the parts intervening in a product’s value chain have on the price of a given product. This is incredibly helpful when establishing the best price for the product, especially in bids, as well as for understanding factory status, the number of bids won compared to total bids, errors made in bids compared to real cost, etc.

Smart pricing uses historical data from throughout the production chain for a product (part) showing how product demand responds to price. The purpose is to recommend pricing changes and show how they would affect demand.

With analytics and data generated by the solution, users can see an enriched control panel with the best price recommendations (best bid price), price elasticities by item (parts with similar characteristics), return on accepted bids, number of bids won compared to total number of bids received, output by machine in terms of scrap generated, etc.

The smart pricing system is technically based on two components: one uses a model that determines price elasticity allowing users to see the influence of bid price on demand, and another model to forecast the cost of production (from bid to delivery) allowing the real cost of product production to be known. With these two modules, along with a number of model control rules, the best bid price can be determined based on the service user’s needs.

Each of these modules take data from the Lantek 360 suite, Expert, Integra, MES, etc. safely, anonymously, and automatically adapting them to the current and future characteristics required by each user.

Thus, pricing is defined as a dynamic tool that intelligently calculates the current production price to find the best bid price based on the needs set by the service user such as maximizing profit margins or gaining market share.