Non-Linear Performance Pricing (NLPP)
The powerful analysis solution for price analysis, cost optimization, benchmarking and price estimation.
- See savings and benchmarks per part number: NLPP calculates three benchmarks (Worst Practice, Target and Best Practice) per part number. So you know the target price and a realistic price range even before you negotiate.
- Savings by supplier, product group or other criteria: With NLPP you can quickly perform "what-if" analysis and immediately see the effect on your purchasing volume.
- Use the results as a reporting baseline: NLPP results are very well suited to make success measurable and objectively evaluated.
- Use the precise NLPP price estimates in daily business: With NLPP, you can calculate precise price estimates for all types of part families in seconds. No more delays due to supplier RFQs.
- Integrate NLPP price estimates into your IT systems: Use NLPP target price formulas in your IT systems for active and agile cost management in your product lifecycle.
- Connect sales, development and purchasing: Your engineering understands which design change influences the manufacturing costs by what degree and how much customers are willing to spend for a specific feature. Quick and accurate.
How NLPP works
NLPP analyzes product prices by performance and shows you which products have good or bad value for money.
Target Group & Benefit
NLPP makes state-of-the-art analysis algorithms accessible to all, quickly and easily.
Buyers, sellers, value engineers, cost analysts, quote builders, value analysts, and many more who want to understand how performance and price are related leverage NLPP.
NLPP has been actively developing since 2008, delivering the best results from your data as we have developed the most powerful mathematics available on the market for performance pricing.
NLPP customers are companies in a variety of sizes and industries that already benefit from the precision and speed compared to other approaches.
The average NLPP ROI is 1-2 applications.
NLPP Unique Selling Proposition
The uniqueness of NLPP is to automatically find the most accurate target price formula for your data.
NLPP condenses the information from your data into precise target price formulas that accurately describe the relationship between price and performance. With NLPP, Predictive Analytics becomes practicable.
- Only correct "performance pricing models" can reliably and precisely map the relationship between product characteristics and price.
- NLPP is the only solution that provides a total of six different mathematical methods to find the best possible target price formula in each situation.
- Depending on your input data, NLPP automatically uses the mathematical method which can gain the most information from your data and thus guarantees an optimal result.
- In 96% of all cases, only one of the five unique NLPP methods can ensure that the information contained in the input data reaches the target price formula correctly and accurately.
- NLPP automatically detects which product features have a large, small or no impact on the target price.
- NLPP ensures that good input data is followed by good results.
Proportion of different NLPP methods after the automatic calculation of the best target price formula. Basis: 107 data sets from different industries and part families.
Our promise: The best possible target price formula from your data. Fully automatic!
To determine which pricing analysis solution is right for your business, we've created an evaluation guide that highlights the key features and characteristics that such a solution should perform. Furthermore, we provide you with special test data with which you can evaluate the performance of different solutions.
Product & Delivery
You receive software, training and documentation. In addition, unlimited personal advice from our NLPP expert team.
Mathematics
Linear & non-linear methods, 6 different methods, automatic selection of the best model, calculation of the influence strength for each feature, automatic removal of features without influence, indication of extrapolations, calculation of three different price benchmarks
Analysis
Expert system for automatic HotSpot identification, one-click coloration, quick selection of datasets, various calculations of potential savings, target price calculation of new products, recallable snapshots with notes, data export
Data
Any free import structure, any number of records and characteristics, data quality check, one click clustering, numerical & non-numerical price drivers, any number of price and quantity columns, mass change of data records, automatic handling of data gaps
Software
Runs on 32 & 64 bit Windows systems, no license server, no database server, installation in 60s, no maintenance for the IT, sharing analysis data, extensive documentation
Speed
Intuitive operation, low learning curve, direct visual feedback, short calculation times thanks to highly optimized algorithms
Consulting & Support
Telephone, web meeting, email for: program operation, feature selection, interpretation of analysis results, best practice webinars, newsletters, regular NLPP tips & tricks
Price-Target Price Visualization
See how your current prices compare to the calculated target prices. Use the three NLPP benchmark lines, color your data points, and recognize extrapolated target prices. Example: Coloring by supplier
Price-Performance Visualization
Use different graphical representations to recognize products with good / bad price-performance ratio. In the example: Red line = 100% performance for 100% money. Left of the red line <100% performance for 100% money, right> 100% performance for 100% money.
Impact of Product Features
See how the different product characteristics influence the target price and what changes in the target price can be expected if the parameters change.
HotSpot Advisor
Automatically identify relevant HotSpots (such as equal parts, greatest potential savings, etc.) with the integrated expert system for automatic evaluations and do not miss a single opportunity.
FAQs
Answers to the most important questions about the NLPP methodology and solution.
LPP stands for "Linear Performance Pricing" and only uses target price formulas with a linear structure, ie only multiplication and addition. Therefore, LPP solutions can only depict linear relationships.
NLPP also uses target price formulas with more complex, non-linear, structures. As a result, NLPP is better able to map the relationship between product feature and price.
Most LPP applications use a method called LPP-LSM. LPP stands for Linear Performance Pricing and describes the structure of the linear target price formulas (addition and multiplication). But that alone is not enough; the process of calculating the components, the regression coefficients and the target price formula is also important. This is almost always the least squares method (LSM).
To use LPP-LSM, many prerequisites must be met. Furthermore, the method is not well suited if the analysis data also includes extreme values. This is almost always the case in practice.
Just as craftsmen need different tools, so are different calculation methods necessary in data analysis. Therefore, NLPP offers six different methods, LPP-LSM being one. Our tests have shown that in 96% of cases, one of the unique NLPP methods give better results than LPP-LSM.
NLPP can handle several thousands of records. The largest known record consists of 15,000 articles.
NLPP can handle any number of features. However, it does not make sense to use as many features as possible in one calculation. The motto "Much helps a lot" does not apply.
No. NLPP processes data where the information is organized in columns and one record per line. The order of the columns does not matter.
The calculation time depends on the number of data records, the number of features used and the "structure of the data".
Most NLPP analysis require less than 30 seconds of computation time.
No. NLPP can work with gaps in the data. If a feature is used in a calculation and there are records where that feature is missing, these records are automatically disregarded.
All your data remains with you. NLPP is not a cloud solution, as price analytics data is very sensitive business internals and in our opinion should only be stored by you.
As an additional safeguard, all NLPP data is encrypted. If you want to exchange NLPP data via email, etc., this ensures that no unauthorized access is possible.
Yes. With the "data washing machine" of our partner CADBAS we can read your CAD data and enrich it with additional master data. This procedure creates the basis for a systematic & integrated material creation and classification process that you can build up step-by-step.
Successful parts data management is a continuous improvement process, and the NLPP methodology increases the value of your part data by factors.
Partner
Our NLPP technology combined with the coordinated offerings of our partners, further increases your benefit.
- Our partner CADBAS GmbH has been offering pragmatic solutions for parts management for many years.
- As the maturity of systematic & integrated parts management increases, the value of your data for the NLPP methodology continues to increase.
- Successful parts management is a continuous improvement process.
- The combination of PartExplorer & NLPP makes it possible to use data at the push of a button in NLPP and use the calculated target price formulas in further business processes.
- INNOSourcing members benefit from continuous cost and process optimization through strategic pooling.
- INNOSourcing has many years of experience in the Swiss market with regard to procurement and purchasing pooling.
- By partnering with INNOSourcing, members gain access to the high-profile NLPP methodology and software to systematically discover cost-cutting potential in their procurement portfolio.
- By using NLPP, INNOSourcing is also able to optimally manage direct purchasing material for its members.