Client Overview

Industry: Distribution and Outsourcing (Healthcare, Cleaning & Hygiene, Safety, Food Processing, Packaging)

Business Size: $15B+ global revenue, with complex multi-division pricing structures

Location: Global operations with regional focus in Australia, UK, North America

Client Context: BUNZL operates across multiple sectors with thousands of SKUs and varying customer requirements. Despite strong topline growth, profit margins were under pressure due to inconsistent pricing execution, legacy cost-plus pricing habits, and frequent override activity in competitive tenders.

Challenge / Problem

Symptoms Observed:

• Uneven discounting practices across business units
• Outdated price files not reflecting current value drivers or cost movements
• Margin compression in high-volume consumables despite volume growth

Strategic Impact:

• EBIT leakage from mispriced SKUs and reactive discounting
• Internal misalignment between procurement, pricing, and sales functions

Internal Executive Viewpoint:
"We needed a smarter, scalable way to optimise pricing without sparking customer backlash or placing further strain on our frontline teams."

Objectives of the Engagement

• Replace cost-plus logic with value-based pricing at SKU and segment level
• Identify and capture immediate margin expansion opportunities
• Standardise price-setting structure across product categories
• Reduce pricing errors and override dependency
• Strengthen sales confidence through clear pricing guidance

Our Approach

Phase 1: Diagnostic Analysis

• Reviewed 12 months of transaction-level pricing and margin data across key divisions
• Identified $5.7M–$8.2M in recoverable EBIT across 4 business units

Phase 2: Price Architecture Design

• Introduced SKU- and segment-level price ladders and discount guardrails
• Developed customer-specific value scoring to align pricing power

Phase 3: Pilot Testing

• Launched in the healthcare and packaging divisions
• Tested algorithmic recommendations against sales team judgement

Phase 4: Full Deployment

• Rolled out pricing engine across 18,000 SKUs
• Embedded approval thresholds, dashboards, and ERP pricing logic

Phase 5: Margin Expansion Accelerator

• Targeted advanced opportunities in underpriced long-tail SKUs
• Introduced quarterly price performance reviews at GM level

Key Actions Taken

1. Value-Based Price Modelling
   Replaced cost-plus formulas with margin-optimised, demand-informed pricing
2. Discount Banding Controls
   Introduced consistent thresholds for deals by segment and product class
3. ERP Price Logic Alignment
   Updated backend pricing logic across SAP and Salesforce platforms
4. Performance Dashboards
   Enabled live margin tracking at customer and product level
5. Sales Enablement
   Delivered pricing confidence tools and training for 300+ frontline staff

Results Achieved (Within 6–12 Months)

1. Gross Margin Uplift
   +510 bps across targeted SKUs, equivalent to $6.1M EBIT
2. Override Frequency Reduction
   65% drop in manual overrides across sales and customer service
3. Volume Retention Rate
   98.3% customer retention during transition to optimised prices
4. Sales Team Price Confidence
   87% reported higher confidence quoting with new structure
5. Payback Period
   10 weeks to breakeven; IRR exceeded 600% within first year

Client Feedback

“Project Blackbird gave us visibility and control we’d never had before. It wasn’t just about price increases—it was about pricing intelligently. We saw results in weeks, not years.”
— Managing Director, BUNZL Asia Pacific

What This Means for Similar Companies

Companies with broad SKU portfolios, decentralised sales models, and legacy pricing approaches can gain rapid and sustained margin growth through algorithmic optimisation. With Project Blackbird, price becomes a source of advantage—not a liability.

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