In the ever-evolving world of B2B organizations, the concept of omnichannel sales has gained significant traction. Many businesses are now considering the switch to selling directly to end customers, as it allows for better control over pricing and margins.
However, such a transformation necessitates substantial modifications to the pricing model and rules. This is where Dynamics 365 Supply Chain Management comes into play, offering an omnichannel price engine that serves as an essential module for managing pricing rules and automating omnichannel pricing execution.
One of the key responsibilities of sales managers in B2B businesses is to collaborate with marketing and product managers to comprehend the unique features that differentiate their products, target customer segments, and other factors that affect pricing sensitivity. These insights play a crucial role in shaping the pricing strategy for each product.
For instance, factors such as product package types, delivery mode, and expected receipt dates can serve as pricing differentiators. Dynamics 365 Supply Chain Management empowers businesses by providing them with the ability to convert customer and product data into attribute-based pricing structures. This allows for the creation of complex discount rules tailored to specific attributes and attribute combinations.
With Dynamics 365 Supply Chain Management, businesses can leverage the attribute-based pricing model. This means that pricing is built upon different attributes or combinations of attributes, allowing for greater flexibility and customization. By adopting this pricing approach, companies can align their pricing strategies with specific customer needs and preferences.
Moreover, the system enables the creation of complex discount rules. These rules can be tailored to address various pricing scenarios and business requirements. The price engine within Dynamics 365 Supply Chain Management calculates prices and responds to omnichannel orders in a performative manner, ensuring accurate and consistent pricing across different channels.
Dynamics 365 Supply Chain Management offers B2B organizations a comprehensive solution for pricing management in the era of omnichannel sales. With its omnichannel price engine, businesses can automate pricing execution, manage pricing rules, and leverage attribute-based pricing models. By effectively utilizing the system’s capabilities, companies can enhance their control over pricing and margins while delivering tailored pricing experiences to their customers.
Key Concepts
Pricing in Dynamics 365 Supply Chain Management involves the use of various pricing components, including price, margin, charges, and rebates. Each legal entity can have multiple pricing structures.
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Pricing Structure
Within the pricing structure, a price determination logic is implemented to ensure that multiple sources can contribute to the final price, with priority given to specific sources. The price can be derived from trade agreements, and if no trade agreement exists, the base price is applied. The base price can be determined based on the item’s purchase or standard cost, or a default price specified in the item master.
The margin Component and Price Adjustments
The margin component and price adjustments allow for price modifications at the time of order placement, before discounts or charges are applied.
Discount Types
Dynamics 365 Supply Chain Management offers various discount types and pricing management features, including simple quantity discounts, mix-and-match promotions, threshold-based discounts, free items, and additional features like coupons, funds, and claims.
Charges
Charges can be applied at the order header level or at the order line level. The pricing management module builds upon the existing capabilities in Dynamics Supply Chain Management and introduces priced attributes, data ranges, and combination rank to enhance the functionality of charges.
Rebates
Rebates can be quantity-based, value-based, or lump sum rebates for a specific period. The rebate management feature in pricing management expands on the capabilities of the earlier version in Dynamics Supply Chain Management by introducing rebates based on price attributes. This overcomes constraints previously imposed by limited selection options for items or item groups in rebate management.
Price attributes
Price attributes play a crucial role across all pricing components, providing flexibility in defining pricing factors. They leverage information about customers, products, sales order headers, and lines. Extension points are available to further extend the usage of price attributes.
Concurrency
Concurrency control determines how multiple applicable pricing rules interact and compute outcomes when they are associated with the same price component.
Understanding the key concepts of pricing management in Dynamics 365 Supply Chain Management is essential for businesses seeking to optimize their pricing strategies. By leveraging various pricing components such as price, margin, charges, and rebates, organizations can establish flexible pricing structures that align with their business needs.
The system’s capabilities, including price determination logic, discount types, and extension points for price attributes, offer businesses the tools they need to effectively manage and control their pricing processes.
Pricing Determination
Many organizations require multiple sources for pricing. Pricing Management in Dynamics 365 supports pricing based on a trade agreement, and if no trade agreement is available, then it will look into the base pricing.
The first step in the price calculation process is to determine the price of an item before any adjustments, discounts, or charges are applied. There are multiple sources available to determine the price of an order. Let’s discuss various sources and their respective priority.
The price can be derived from multiple sources. So, in order of priority, the price search starts with the sales trade agreement price, which gets the highest priority. If this is not found, the system tries to identify the calculated item base price.
The next price is the activated standard item cost. If no base price is available, D365 will see if the item has a standard cost model. If yes, then this will be applied as the base price. This could be in scenarios where the company is manufacturing the item and the item has a standard cost model. If none of them are available, the base sales price of the released product is used.
Margin Component Price Adjustments
After the price is determined, adjustments can be made to the price at the time of order before discounts or charges are applied. These adjustments can be a set amount or a percentage and can be positive or negative.
Adjustments can be driven based on order quantity and can compound with other price adjustments.