Visual Six Sigma, 2nd Edition

Chapter 6Transforming Pricing Management in a Chemical Supplier

Six Sigma is often assumed to be the prerogative of black belts, quality engineers, or continuous improvement professionals working in manufacturing environments where the culture and approach are amenable to the rigor and discipline of statistically based data analysis. This case study illustrates how Visual Six Sigma may be successfully applied in the world of sales and marketing, a world conventionally seen as being driven more by art and intuition than by data analysis and science. Specifically, we will see how Visual Six Sigma is used to drive a new way of conceptualizing and managing the pricing process of a multinational chemicals supplier.

Your employer, Polymat Ltd., is a manufacturer of polymeric materials that are sold into a range of commodity and specialty applications. Recently, Polymat has been facing growing competition from new manufacturing facilities, primarily in China and India. Market prices have declined steadily over a period of several years. Given your reputation as a skilled black belt, you are enlisted to help arrest the steady price decline.

You assemble a small team and construct what turns out to be a useful set of data. These data capture information from two sales campaigns that attempted to renegotiate prices so as to meet at least a 5 percent price increase. The campaigns cover two very different periods, one where Polymat's product was in undersupply and one where it was in oversupply. ...