Rockwool Scandinavia was faced with a negative development in pricing, primarily driven by a very tough competitive situation in the builder-merchant channel. The competitive situation put the supply chain under increased pressure regarding several parameters: lead times, special orders and delivery time, all of which increased costs. Newly appointed CEO of RWS Thomas Kähler and his head of supply chain urgently wanted to change this.

Through analysing all sales transactions across RWS, as well as mapping product sales and profitability, Commerzial identified the following key challenges that needed to be addressed to deliver the desired results:

1. Cleaning up and simplifying the product portfolio in close collaboration with the local MDs and sales directors (fewer and more standardised products).
2. Updating the commercial terms and conditions for a more efficient ordering and delivery process for the customers.
3. Realignment of discounts and bonuses that would give RWS’ customers and partners an incentive to buy products with higher profit margins.
4. A new pricing structure that would secure increased profitability on standard products, as well as on custom orders and special delivery requests.

Commerzial helped RWS analyse and design new terms and conditions, as well as a new material and price list for each country, defining clear principles and follow-up routines for the discount and bonus systems.

• The country MDs and sales managers created a new and much simpler product portfolio that led to the increased profitability of the orders they received from their customers.
• Terms and conditions were redefined in close corporation with the production and supply chain, which resulted in more efficient customer behaviour while also securing major cost savings in operations and supply chain.
• The country MDs and sales managers were equipped with relevant insights for the yearly negotiations with key partners and customers, which resulted in a more effective discount and bonus structure.
• Fees and terms for express delivery, special orders and products were implemented in sales and customer service, further increasing profitability.

The challenges Rockwool Scandinavia faced are common for many production companies where increased market demands are handled by the sales organisation and often have consequences for the whole value chain, from production and supply chain to customer service.

As commercial excellence advisors, we can analyse the situation and help you define a simple and clear path to improvement. In this process, we also help manage the necessary change to your processes and build internal competence, habits and culture to sustain the improvements.

We supply the right competence and experience that help you embrace that challenge and achieve your goals. With Commerzial, you tap into a senior team of consultants and a proven method and toolbox addressing all corners of commercial excellence.