Price Optimization Case Study – MCI

• Company Name: Motor City Industrial
• Industry: Industrial Parts Distribution
• Catalog: Fasteners, Safety Products, Abrasives, Power Tools, Supply Chain Automation, Supply Chain Mapping, Aerospace, Fluid Power
• SKU Count: 26,000
• Intuilize Solutions:
  • Price Optimization & Management Module
  • Standard Cost Guidance Add-On
  • E-Commerce Pricing Add-On
  • Contract Pricing Monitor Add-On

• Total Gross Margin Lift Achieved: +$500K
• ROI (Return on Intuilize):  > 10X

Motor City Industrial (headquartered in Hazel Park, MI) is an industrial distributor offering a comprehensive suite of services. Founded in 1965, they specialize in custom design and engineering of electric control panels to hydraulic power units, scalable assembly, and kitting services. They sell to a variety of industries including automation, Defense, manufacturing, OEMs, and maintenance & repair operations in the Midwest and southeast United States. Motor City, its branches in SE Michigan, and its subsidiaries Quality Fastener, Smith Fastener, and Emco Industrial, were recently acquired by AFC Industries (a Bertram Capital company). The company’s leadership remained, with CEO Joe Stephens and the existing management team continuing to guide the organization.

Motor City was challenged with profitability and growth in the face of intense competition. Maintaining consistent gross margins competitively across a diverse product portfolio and a changing customer base had led to revenue fluctuations. Pricing strategies lacked data-backed decision-making and heavily relied on tribal knowledge. Setting prices was accomplished by manual calculation, resulting in inefficiencies, errors, and missed profit opportunities. The absence of standardized cost management practices made it difficult to monitor and manage costs effectively, negatively impacting profitability. Motor City Industrial also faced intense competition in its market, with multiple competitors offering similar products. The distributor struggled with managing fluctuating costs related to procurement, warehousing, and transportation, which ultimately was affecting their profit margins.

“I used to think I could do it all on my own…but Intuilize showed us the way to optimize our operations and make more informed decisions. They did a good job of getting me ready for the fight of implementing change.”

Joe Stephens, CEO

• Price Optimization & Management Module
• Standard Cost Guidance Add-On
• E-Commerce Pricing Add-On
• Contract Pricing Monitor Add-On

Motor City Industrial initially had reservations about implementing Intuilize. The leadership team had concerns about seamlessly integrating with their existing ERP and PowerBI software, a lengthy ROI on the investment, and the complexity and risks associated with changing pricing. Intuilize designed the solution for Motor City Industrial to maximize profitability while minimizing business disruption. The strategy involved initiating small changes with AI-assisted simplified pricing and monitoring progress to mitigate the perceived risk of changing pricing strategies.

Intuilize assisted with importing pricing and standard cost data into the client ERP for the Price Optimization & Management Module and Standard Cost Guidance Add-On. The software analyzed historical sales data, market conditions, and continuously monitored competitive pricing to recommend optimal pricing strategies. It considered factors such as demand patterns, supplier costs, and regional market dynamics. The solution provided real-time visibility into procurement costs, warehousing expenses, and transportation costs. In addition, rather than setting hard pricing guidelines, it deployed both data-driven standard costs and dynamic pricing multipliers that adapted to Motor City’s cost structure. This approach streamlined and automated the pricing process, required a minimal input of oversight from the internal team, and auto-adjusted in response to changing market conditions. 

“We needed more than just a tactical solution; we needed a strategic approach to pricing. We went from relying on gut feelings to using metrics-driven insights, thanks to the Intuilize price guidance system. It created a psychological barrier against discounting, which has made a significant impact.”

Joe Stephens, CEO

Intuilize also implemented the E-Commerce Pricing Add-On for Motor City’s e-commerce website that connected directly with their ERP data, eliminating the need for manual updating and ensuring that customers could always access accurate and competitive pricing.

Finally, Intuilize added the Contract Pricing Monitor Add-On to provide valuable insights and recommended pricing strategies to minimize staff involvement in overseeing contract pricing.

By optimizing data-driven pricing strategies and gaining control over procurement and operational costs, Motor City Industrial experienced a significant increase in profitability, achieving a total gross margin lift of over $545,000. The distributor successfully offered competitive prices while maintaining healthy profit margins, which helped them retain existing customers and attract new ones, reinforcing their market position. They also saw that employees’ participation rates in following pricing guidance increased from 25% to over 90%. Motor City Industrial now has the capability to monitor and manage costs in real time, enabling them to make informed decisions and adapt quickly to changes in the supply chain,  minimizing financial risks. The automation of pricing processes significantly reduces manual errors and saves valuable time, allowing the distributor’s team to shift their focus to strategic initiatives and customer-centric activities. In addition, the achieved gross margin lift ensured the investment in Intuilize paid off in less than 12 months, achieving a 7.4X ROI.

“As a data-driven CEO, I refuse to make decisions without data. Intuilize not only provided us with a tool but also helped us understand the importance of metrics-driven decision-making. They stood out [against other vendors] because they brought insights and value that went beyond just delivering software. Intuilize has been a game-changer for our business…and indispensable to our success.”

Joe Stephens, CEO