Addressing Pricing Challenges in Industrial Parts Manufacturing

In the dynamic world of industrial parts manufacturing, pricing challenges are inevitable. Supply chain disruptions, raw material fluctuations, and inflationary pressures compound the complexity of setting and maintaining prices. Internally, outdated pricing tools and methodologies further stress profitability and operational efficiency. To thrive, manufacturers must adopt agile, data-driven price optimization strategies tailored to the nuances of their industry.

Pricing Challenges: A Sector Under Pressure 

According to Deloitte’s 2025 Manufacturing Industry Outlook, “companies are expected to face continued supply chain risks, disruptions, potential delays, and elevated costs.”  

The industrial parts manufacturing sector is not exempt from these challenges, and will require advanced pricing strategies to adapt and survive these conditions. Before we can understand how to address these challenges, let’s first take a deeper dive into the challenges themselves:

Discrete Products 

With clearly defined bills of materials, discrete products often lend themselves to cost-plus pricing strategies. While simple, these strategies overlook price elasticity and market demand, leaving potential revenue untapped.

Configured Products

Made-to-order or custom-engineered products present unique pricing challenges, as each quote must reflect the distinct attributes of the configuration. Many manufacturers rely on gut-feel pricing or broad markup strategies, which frequently result in missed profit opportunities. The situation is further complicated by sluggish quoting processes, causing potential customers to turn elsewhere—not necessarily for a better price, but for a faster response.

Aftermarket Parts

The pricing of aftermarket parts is inherently tied to the original product’s list price, meaning manufacturers must set a competitive initial price to ensure that aftermarket offerings remain viable. Furthermore, evolving market conditions and the diverse range of buyers in this segment creates a classic price optimization challenge—manufacturers who fail to optimize pricing upfront risk losing long-term profitability and customer loyalty.

Volatility in Raw Material Costs

Manufacturers now typically face up to 6–10 raw material cost changes per year—far exceeding the historical norm of annual adjustments. Additionally, rising costs for energy, labor, and distribution further strain pricing strategies. These frequent shifts demand real-time updates to pricing across all products and contracts. However, many manufacturers continue to rely on manual methods, which are slow, error-prone, and incapable of keeping pace with market dynamics.

Outdated tools are a particular pain point, leading to revenue loss and margin leakage. Streamlined, automated systems are essential for manufacturers to efficiently optimize prices.

Learn More: Industrial Manufacturers: Overcome Challenges with Intelligent Pricing

Using Modern Pricing Tools as Levers for Growth

For manufacturers with capital-intensive operations, pricing is more than just a financial mechanism—it’s a strategic lever that balances supply and demand, ensuring plants run efficiently and production schedules remain optimized. When pricing is used effectively, it becomes a proactive tool to weather fluctuations in demand, avoid overproduction, and align operations with market needs. With advanced tools like Zilliant Price Optimization, manufacturers can: 

• Set Market-Relevant Prices: AI-driven pricing ensures every price is optimized for market conditions and customer expectations, maximizing both profitability and customer satisfaction.
• Real-Time Market Adjustments: Automatically adapt to supply chain fluctuations and economic changes to maintain competitive and profitable price points.
• Address All Price Types: Seamlessly manage list, matrix, negotiated, into stock, override, customer-specific, project-based, and configured pricing with a unified approach that ensures consistency and flexibility.
• Run “What-If” Scenarios: Simulate different pricing strategies to evaluate their impact on revenue and margins before making adjustments, reducing risk and improving financial outcomes.
• Balance Profit and Volume: Optimize pricing to maximize revenue while maintaining competitiveness, ensuring that every pricing decision is both strategic and sustainable.
• Track ROI and Margin Growth: Companies using advanced pricing strategies see sustainable gross margin improvements of 100 to 300 basis points (1% to 3% of sales), proving the financial benefit of optimized pricing.
• Ensure Long-Term Pricing Success: Continuously measure pricing effectiveness, track improvements, and refine strategies to keep pricing aligned with business goals and market conditions.

Conclusion: The Path Forward in Industrial Pricing 

Advanced pricing solutions, such as Zilliant Price Optimization, empower manufacturers to streamline processes, optimize pricing strategies, and enable seamless collaboration across teams. With the right tools, manufacturers can enhance profitability, protect margins, and respond swiftly to evolving market conditions.

Ready to take your pricing strategy to the next level? Contact us today to learn how Zilliant can help you unlock the full potential of your pricing.