The third largest full-range construction equipment manufacturer in the world, Hitachi Construction Machinery’s annual service parts volume leads the market.
Headquartered in Tokyo, Japan, Hitachi’s main product line is hydraulic excavators, among additional transportation machinery and devices. Hitachi implemented Syncron Price™ to optimize its pricing processes through science-based segmentation, pricing guidance and advanced analytics.
With high-volume inventory comes a need for high-velocity pricing optimization. The challenge Hitachi was facing was that their previous pricing system, a manual cost-plus model, couldn’t keep up with the competitive market that favors value-based optimization, price management and distribution. Hitachi Construction Machinery (HCM) needed to improve its pricing analysis and data visibility in order to become more competitive in a changing market.
What Hitachi needed was a system that included those functionalities, along with built-in approval handling and advanced analysis capabilities. And that’s exactly what Syncron Price provides. By leveraging analytics-based pricing and optimizing pricing through science-based segmentation, pricing guidance and advanced analytics, Hitachi was able to improve the pricing strategy for more than 1,000,000 parts with 24,000 new parts introduced annually.
With the option to simulate multiple price revision scenarios and incorporate science-based segmentation, pricing guidance, and advanced analytics, Hitachi was able to dramatically streamline service parts pricing processes and productivity. With Syncron Price, Hitachi has reduced revision lead time from five months to three, and pricing lead time by 30 percent for new parts – making their service parts pricing a competitive differentiator, while also driving significant revenue improvements for the company as a whole.
- Projected gross profit increase of JPY 2 Billion ($20M) in the next 5 years.
- Price revision lead time decreased from 5 months to 3 months.
- Reduced pricing lead time by 30% for new parts.
- Enabled pricing managers to optimize prices based on market conditions.