Dynamic Pricing Optimization in Tier-1 A&D Supply Chain

Customer:
Leading Tier-1 Aerospace & Defense organization.

Business Challenge:

The customer manages a catalog of over 2 million unique parts. To streamline inventory and improve efficiency, the organization needed to:

Identify and replace redundant or obsolete parts
Offer removed items for external purchase with optimized pricing
Maintain sales volume while increasing margins

Manually pricing and planning at this scale was unsustainable, and static models failed to capture the complexity of real-world demand.

ESI LABS Objective:

Develop a system that could generate more profitable price lists without reducing overall sales volume.

Solution Delivered:

ESI LABS deployed a rule-driven dynamic pricing engine built on:
- A proprietary optimization algorithm incorporating hundreds of operational, market, and item-specific parameters
- Business rules that mapped item relationships, substitution logic, and catalog constraints
- An adaptive pricing model that aligned profit targets with acceptable volume trade-offs
The solution integrated seamlessly into existing planning systems and could simulate various price elasticity and catalog scenarios.

Implementation Timeline:

6 months: System design, modeling, and rollout
6 months: Tuning and refining pricing models for full-scale operations

Results Achieved:

Average item prices increased by 7%

Sales volume decreased by just 2%

Overall profit increased by 4%

Conclusion:

The dynamic pricing engine delivered a 7% price uplift with minimal volume impact, driving a 4% profit increase and transforming pricing into a scalable, data-driven advantage.

Director of Supply Chain Optimization, Tier-1 A&D Organization

Our catalog pricing was historically complex, and we lacked the tools to optimize it at scale. ESI LABS delivered a pricing engine that didn’t just automate the process—it made it smarter. We increased average prices by 7% while keeping volume impact to a minimum. Profitability is up, and we now have a system that adapts to changes instead of chasing them. Their combination of rule logic and optimization algorithms was exactly what we needed—and they delivered it in under a year.

Contact Us

Improve Your Organization's Decision-Making Process

Transform your business with intelligent automation solutions