I interviewed Glenn Rosenholmer who discussed Reframing your Products and your Offer when you go to Market.

 

 

 

 

 

 

It's good to speak with you again today, Glenn. Looking forward to discussing this topic of reframing your products and your offer when you go to market.

 

Thank you, Dustin. I think I can see clearly that we have some sort of mismatch about the future and the current situation now. And the most obvious scene for this is business to business. But you can see it also in the business-consumer with early adopters and late movers — both if your customers that are not ready for your offer, as well as consumers not ready for being aware of what the technique today can do

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What's the relationship between physical products and services in the supply chain?

 

That's a good question, Dustin. I would say that a lot of the historical ways of looking at it is that you have your physical product and you have services around it. Or you will be adding services after you have presented as a salesman or showing your offer to your clients with your physical product. It could be a robot. It could be a TV. It could furniture. It could be a system for your house or whatever. I don't see any difference anymore. Everything has relationships. But what, I think, companies need to do now is to converge your thinking about how you present your product and service offer.

 

digital transformation supply chain pricing

 

If it was 80% your product and 20% your service in the mind of your salesforce or salespeople, it should be the opposite. It's actually about 80% services. You need to get

the extra warranty or the relationship in a more long relationship with your customer, meaning the supply chain also has to adapt to this.

 

It's not only about the last mile. It's not only about the lead time to the customer. It's about making sure that your customer, when they receive the goods with the services around it, using that word, needs to be adapting to the new situation.

 

What does the pricing have to do with the supply chain?

 

Of course, instead of offering 80% for your physical product and 20% your service, we offer 80% as a service and 20% for the physical product, then you need to reframe and re-do your prices and your pricing management system. To do that, you need education. It's not only your salesforce that needs to be adapting to the new situation. It's also actually learning from the relationship with your customers to understand how mature is your customer and what is the price going to be for your services because you're going to have another pricing model. If the supply chain is not together with the price, we are lost in what is the value in the end for the customer.

 

Can you talk about why are the right demand forecasting methods needed?

 

Demand forecasting methods, applying what I have said about the services would be 80% of your offer and 20% would be the physical product. Saying that, you need then to also be aware that all those sales or the deals you're doing, need to be much, much more aware that your customer’s way of buying things would change.

 

Pricing Discounts Services Forecasting

 

 

 

Forecasting methods need be much more systemized, and you need to be even better at scheduling your service offer because the service offer is more about making sure you have the right up time in your system for the additional services you gave.

 

It could be we actually are getting paid for the warranties. So it's not about forecasting your physical product. It's much more about forecasting your services. And that is a different story, actually, when you forecast that. It's going to be tougher, harder.

 

But it's possible. I'm dead sure that we will see a development where we'll have much more pricing management and different business models with different types of customers. If you are that type of company where you have different products and you have different service offers or offers and different segments.

 

The different segments will need different business models.

 

How is pricing and demand forecasting done effectively?

 

I would say that if you have an ERP system, and you have some sort of MRP system and several helping hands in terms of systems nowadays, I think what is lacking in many companies is actually making sure that the pricing and demand forecasting also need support in terms of data support and also how you deal with your master data in that case. Because if you are selling, in early days, a physical product, you will have a much, much more complex master data to be tracking down all the transactions that are going to happen, not at one time. It's going to happen in five or six or seven years from now. Without a tool to use, I think you're going to lose a lot of money because you're not seeing the money that is lost because you give away services that you should be paid for.

 

Thanks, Glenn, for sharing today on this topic.

 

Thank you, Dustin. I hope you have a good day, and I'm looking forward to giving my point of views later on this spring, coming up. I wish you a good new year, the [inaudible 0:8:00]is just starting. Thank you.

 

About Glenn Rosenholmer

 

 

 

 

 

Glenn Rosenholmer

 

Senior Management Consultant

 

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